Bruce Montgomery

About A. Bruce Montgomery, M.D.

Independent director and Lead Independent Board Member at Xencor since March 2015, age 71, with ~10 years board tenure as of April 23, 2025. Board-certified internist and pulmonologist; B.S. in chemistry (magna cum laude) and M.D. (Alpha Omega Alpha) from University of Washington. Extensive biotech operating and drug development experience at Genentech, PathoGenesis, Corus Pharma, Gilead; led development of CAYSTON for cystic fibrosis. Identified by Xencor’s board matrix with biotechnology, senior management, governance/ethics, business development and financial expertise.

Past Roles

External Roles

Board Governance

• Independence: Affirmed independent under Nasdaq rules.
• Lead Independent Board Member: Holds authority to call and preside over Board meetings; separate committee chairs report regularly to Board.
• Committee memberships (2024): Audit; Human Capital Management & Compensation (HCMCC); Research & Development (R&D). Not listed as chair of any committee.
• Attendance: Board met five times in 2024, each with executive session; all directors attended all Board and applicable committee meetings.
• Committee activity levels (FY2024): Audit 5; HCMCC 5; Nominating 3; R&D 1.
• HCMCC structure: All members independent; Aon retained as independent compensation consultant; no interlocks with other companies’ comp committees.

Fixed Compensation (Director)

Performance Compensation (Director)

• Director equity program: Initial grant fair value $550,000 for new directors; annual grant fair value $300,000 (equal split options/RSUs); options monthly vest over 12 months; RSUs vest after 12 months; non-employee director total comp capped at $750,000 per fiscal year ($1,500,000 in first year).
• Change-in-control treatment: Director equity “will vest in full upon a change of control” per compensation section, while plan governance summary states “no automatic single trigger acceleration” (potential inconsistency; see Governance Assessment).

Other Directorships & Interlocks

• Current public company boards: None disclosed.
• Compensation committee interlocks: None; no Xencor executives sit on other boards’ comp committees with reciprocal ties.

Expertise & Qualifications

• Board matrix: Financial expertise; biotechnology; public company board; R&D; senior management; business development; human capital; governance/ethics.
• Clinical credentials: Board-certified internist and pulmonologist.
• Drug development track record: Led CAYSTON through development at Gilead; prior R&D leadership at PathoGenesis and roles at Genentech.

Equity Ownership

Governance Assessment

• Strengths:
  • Lead Independent Board Member role enhances independent oversight; full meeting and committee attendance evidences engagement.
  • Multi-committee membership (Audit, HCMCC, R&D) aligns with operating and scientific expertise; independent status affirmed.
  • Director compensation calibrated via independent consultant (Aon), with clear caps and standardized vesting; cash fee composition reflects role load (lead and committee service).
  • Anti-hedging/pledging and clawback policies in place; equity plan prohibits option repricing without shareholder approval.
• Risks/RED FLAGS:
  • Audit restatement and recall of prior auditor’s reports, plus identified material weaknesses (royalty accounting; tax legislation evaluation; Zenas impairment), elevate oversight risk; Montgomery serves on Audit Committee, heightening accountability for remediation effectiveness.
  • Potential inconsistency: governance summary states “no automatic single trigger acceleration on a change in control” while director compensation disclosure states director equity “will vest in full upon a change of control,” which may be perceived as shareholder-unfriendly single-trigger acceleration for directors. Clarification warranted.
  • No director stock ownership guidelines disclosed; alignment relies on annual equity grants rather than a minimum ownership requirement. (Not disclosed in proxy; absence may be viewed as a gap.)
• Related-party and conflicts:
  • No related-party transactions >$120,000 involving directors since Jan 1, 2024; standard indemnification agreements in place.
• Shareholder sentiment:
  • Say-on-pay approval 95.8% in 2024 indicates broad support for compensation practices; while focused on executives, it reflects overall governance credibility.

Implication: Montgomery’s leadership as Lead Independent Director and broad committee engagement support board effectiveness; however, audit remediation progress and clarity on director equity acceleration terms are key watch items for investor confidence.

Notes on Attendance and Engagement

• Board meetings in 2024: 5; executive session at each; full attendance by all directors.
• Committee meeting counts (FY2024): Audit 5; HCMCC 5; R&D 1; Nominating 3; Montgomery serves on Audit, HCMCC, R&D.

Compensation Committee Analysis (Context)

• HCMCC members: Ranieri (Chair), Montgomery, Gorman; all independent.
• Consultant: Aon engaged; independence assessed with no conflicts; peer benchmarking used for pay decisions.
• Policy features: Clawback policy implemented (2024 restatement did not trigger recovery); compensation risk assessment concluded practices are not reasonably likely to have a material adverse effect.

Summary Table: 2024 Director Compensation (Montgomery)

Summary Table: Outstanding Director Equity (Montgomery) at 12/31/2024

RED FLAGS Highlight

• Audit restatements/material weaknesses; heightened Audit Committee oversight responsibility.
• Apparent single-trigger vesting for director equity at change in control contrasts governance summary claims (seek clarification).