TPTX » Topics » Evaluation of Executive Compensation Package Following Merger

This excerpt taken from the TPTX DEF 14A filed Apr 23, 2007.

Evaluation of Executive Compensation Package Following Merger

Prior to the Merger our current executives were executives of TPTX, Inc., a private company that is now our subsidiary, and their compensation was determined by the Board of Directors of TPTX, Inc. Following the Merger our executives assumed increased responsibilities as key executives of a public company. Given the successful completion of the Merger and these increased responsibilities, the Compensation Committee determined that it was in our best interest as well as that of our stockholders to conduct a comprehensive review and evaluation of the total compensation package for each of our executives.

During the months of October and November 2006, the Compensation Committee met twice and had numerous informal discussions regarding the appropriate compensation packages for our executives. In conducting the evaluation, the Compensation Committee reviewed recently completed benchmark analyses of executive salaries and bonuses. These analyses were based in part on the San Diego Biotech Employee Development Coalition, or the BEDC, compensation and benefits survey and the Radford biotechnology survey.  In particular, the Compensation Committee reviewed a group of companies in the life sciences industry that is generally comparable to us by virtue of their similar size, geographic location, market capitalization or stage of development, or some combination of the foregoing, and that could compete with us for executive talent. The companies included in this peer group are:

·       ACADIA Pharmaceuticals, Inc.

·       Alexza Pharmaceuticals, Inc.

·       Anadys Pharmaceuticals, Inc.

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·       Cytokinetics, Inc.

·       Favrille, Inc.

·       Metabasis Therapeutics, Inc.

·       Renovis, Inc.

·       Threshold Pharmaceuticals, Inc.

·       Vanda Pharmaceuticals, Inc.

In addition, the Compensation Committee was advised by Compensia, Inc. on the development of the equity component of the overall compensation package. Using its own judgment, in connection with these analyses, the Compensation Committee then made a series of recommendations to our Board of Directors, which became the basis for employment agreements with certain executive officers, as well as salary and bonus adjustments and new equity incentive grants for all executives.

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