Daniel Paterson

About Daniel Paterson

Daniel W. Paterson, age 63, is Verastem’s President and Chief Executive Officer (since August 1, 2023) and a director; he has served as President since June 2019, previously COO (Dec 2014–July 2023), CBO (2013–2014), and VP, Head of Corporate Development and Diagnostics (2012–2013). Prior roles include COO of On-Q-ity (2009–2010) and CEO of The DNA Repair Company (2006–2009); earlier senior posts at IMS Health, CareTools, OnCare, and Axion; B.A. Biology (Boston University) and attended Northeastern University Graduate Pharmacology program . Pay-versus-performance disclosures report cumulative TSR values of $21.02 (2024), $33.09 (2023), and $19.63 (2022) and net losses of $(130.6)mm, $(87.4)mm, and $(73.8)mm respectively ; the 2024 proxy also shows TSR of $31.85 (2023), $18.90 (2022), and $96.24 (2021) with net losses consistent with historical pre-commercial operations .

Past Roles

External Roles

No current public-company directorships or external governance roles for Mr. Paterson are disclosed in the proxy biography .

Fixed Compensation

Notes: “All Other Compensation” for Mr. Paterson was $23,890 (2024) and $22,790 (2023), including 401(k) contributions, HSA and life insurance premiums; no tax gross-ups provided .

Performance Compensation

Annual Cash Incentive (2024)

Equity Awards

• 2024 RSUs (granted for 2023 service on June 18, 2024): 150,000 time-based RSUs vesting 33.3% on each of the first three anniversaries (fully vested by June 18, 2027); 150,000 performance-based RSUs vest upon FDA approval of an NDA for avutometinib + defactinib in LGSOC; continuous service required .
• 2024 Option Exchange Program (March 11, 2024): Exchange granted 144,137 options (exercise $11.44) and 23,843 options (exercise $11.44); grant-date fair values $1,281,072 and $213,973; options expire March 11, 2034 . 2024 option award values in SCT reflect incremental fair value from the exchange .

Outstanding Option Portfolio (selected)

Equity Ownership & Alignment

• Beneficial ownership (as of record dates):
  • March 25, 2025: Paterson 282,695 shares (<1% of 51,489,998 outstanding) .
  • March 26, 2024: Paterson 93,463 shares (<1% of 25,307,669 outstanding) .

• Unvested equity at 12/31/2024 included RSUs of 150,000 and 150,000 (market value $775,500 each at $5.17 close), reflecting alignment and retention .
• Hedging and pledging: Company prohibits hedging and/or pledging and bans short sales and derivatives; insider trading policy applies to directors and officers .
• Clawback: Dodd-Frank–compliant clawback adopted October 2023 for Section 16 officers; incentive comp subject to recoupment upon restatement .
• Stock ownership guidelines: Awards are subject to any Company stock ownership guidelines; specific multiples not disclosed in the proxy excerpts .

Employment Terms

• Employment agreement effective August 1, 2023: target bonus 55% of salary .
• Severance (termination without cause or for good reason, non‑CoC): 12 months base salary continuation; 12 months COBRA cash equivalent; pro‑rata target bonus; 12 months time-based equity acceleration; payment of any awarded but unpaid bonus, subject to a release .
• Change-of-control (double trigger, within 90 days prior to or 18 months after CoC): lump sum 18 months base salary; 18 months COBRA cash equivalent; pro‑rata target bonus; full acceleration of time-based equity; payment of any awarded but unpaid bonus; performance awards outstanding as of Aug 1, 2023 vest to the extent not assumed/continued by the acquirer .
• Plan-level CoC: other than certain performance-based awards, unvested employee equity vests immediately prior to a change of control (single-trigger feature at plan level) .

Board Governance

• Role: Employee director (not independent); Board determined all directors except Paterson, former CEO Stuglik, and former officer Gagnon are independent .
• Committees: Paterson is not listed on standing committees; Board committees (Audit, Compensation, Nominating & Corporate Governance, Research & Development, Commercialization) are composed solely of independent directors except for Stuglik on Commercialization .
• Lead Independent Director: Michael Kauffman, M.D., Ph.D. (also chairs Compensation; member of Audit and R&D) .
• Board activity: Eight meetings in 2024; each director attended at least 75% of Board and committee meetings during their service period .
• Director compensation: Non-employee director grants and fees disclosed; not applicable to employee director Paterson .

Compensation Committee Analysis

• The Compensation Committee (chair: Kauffman; members: Johnson, Kapur) is independent; it engaged Pearl Meyer as independent compensation consultant to advise on program design and market data .
• 2024 SCT totals for Paterson: Salary $648,000; Stock Awards $981,000; Option Awards $527,877 (reflects incremental fair value from 2024 option exchange); Non-Equity Incentive $356,000; All Other $23,890; Total $2,536,767 .

Performance & Track Record

• Strategic milestones under Paterson’s leadership:
  • Early option exercised to license VS‑7375 (KRAS G12D ON/OFF inhibitor) from GenFleet; Phase 1/2a expected mid‑2025 .
  • New credit facility up to $150.0 million with Oberland and $7.5 million equity investment (January 2025) .
  • Strategic commercialization collaboration with IQVIA (January 2025) .
  • FDA accepted NDA with Priority Review for avutometinib + defactinib in recurrent KRAS‑mutant LGSOC (Dec 30, 2024) .
• Pay-versus-performance: Compensation Actually Paid to PEO was $2.38mm (2024) and $3.24mm (2023) while cumulative TSR values were $21.02 (2024) and $33.09 (2023), with net losses of $(130.6)mm and $(87.4)mm, reflecting pre-commercial investment phase .

Vesting Schedules and Insider Selling Pressure

• Near-term RSU vesting: Time-based RSUs vest 33.3% annually on 6/18/2025, 6/18/2026, and 6/18/2027; performance RSUs vest upon FDA approval of the NDA (binary event) .
• Lock-up from capital markets activity: Under a November 2025 underwriting agreement, insiders are subject to lock-up restrictions, with limited allowances for “net”/cashless exercises and tax withholding transactions; any such shares remain subject to lock-up and must be footnoted in any Section 16 filings during the lock-up window .
• Hedging/pledging prohibited, reducing risk of forced selling or misalignment via derivatives or pledges .

Say-on-Pay & Shareholder Feedback

• 2025 annual meeting includes a say‑on‑pay advisory vote; Board recommends “FOR” approval of NEO compensation .

Equity Ownership & Outstanding Awards (detail as of 12/31/2024)

Compensation Structure Analysis

• Mix shifts: Significant use of equity (RSUs and options) with 2024 stock awards of $981k and option awards of $528k, versus cash salary $648k and bonus $356k, indicating high at-risk pay tied to milestones and share price .
• Option Exchange Program (March 2024): Executed to address underwater options; while common in biotech cycles, exchanges can be a governance red flag if recurring—2024 SCT captures incremental fair value; details and grant-date fair values disclosed .
• No tax gross-ups; clawback adopted; anti-hedging/pledging policy in place—favorable governance posture .

Board Service History and Dual-Role Implications

• Board tenure: Director since August 2023; not independent due to CEO role .
• Committees: None (appropriate given management role); Board has a Lead Independent Director and independent committees, which mitigates CEO/Director dual-role concerns .

Investment Implications

• Alignment: Material unvested equity (time-based and milestone-based RSUs) plus sizable option holdings align incentives to regulatory and commercial catalysts (e.g., FDA decision and launch execution) .
• Retention and CoC: Double-trigger CoC protection (18 months salary + benefits; equity acceleration) provides stability through strategic transactions but adds deal-related cost; plan-level single-trigger vesting may be viewed as shareholder-unfriendly if not performance-conditioned .
• Selling pressure: Anti-hedging/pledging reduces adverse signaling risk; lock-up provisions tied to the November 2025 offering restrict discretionary sales near-term; watch scheduled RSU vest dates for potential net-share settlements and 10b5‑1 activity .
• Red flags vs mitigants: 2024 option exchange is a potential concern (repricing optics), partially offset by clear disclosure, continued high at‑risk equity mix, clawback adoption, and independent oversight by the Compensation Committee with external advisor support .