Sage Responses to ISS Feedback
We have outlined below three specific concerns noted by ISS in their advisory report, and our response to each.
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ISS Concern #1: With respect to Sages equity program, while it is noted that [Sage]
increased the proportion of PSUs, [Sage] provides limited disclosure surrounding quantifiable targets for certain milestones to be achieved. |
Response #1: As a late-stage clinical and emerging commercial company, many of the goals for our incentive plans are qualitative
milestones dependent on achievement of strategic research, development, commercial, and/or financial goals set by our Board of Directors over a span of several years. At times, for competitive reasons, we keep confidential a specific detail of a
performance milestone that is otherwise disclosed. We believe the three 2022 milestones for PSU vesting are clear and based on specific, measurable achievements, which we disclosed as follows in our Proxy Statement:
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FDA acceptance for filing of our next NDA (i.e., next product candidate after ZULRESSO or zuranolone);
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Successful launch of zuranolone with a specific number of patients treated in approved indications (actual
number not disclosed for competitive reasons); and |
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A positive Phase 2 data readout for SAGE-718 in a placebo-controlled
study. |
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ISS Concern #2: With respect to Sages bonus program, concerns remain . . . as the award is
based on goals that are generally described in qualitative or vague terms, which inhibits shareholders ability to fully assess the rigor of the program and the
pay-for-performance linkage. |
Response #2: We respectfully disagree with this assessment from ISS, as we have detailed disclosures concerning our bonus program and
related performance-based targets in the Proxy Statement, including most comprehensively in the sections titled Corporate Background and Highlights for 2022, and Short-Term Incentives Performance-Based Annual Bonus Incentive
Plan Corporate Goals Assessment, each of which provides information and insights to understand the rigor of our pay-for-performance linkage. Many of our goals are
appropriately qualitative due to our stage of development as company. We also include clear disclosure in our Proxy Statement highlighting where we exceeded, achieved, and partially achieved our goals and why, and the actual compensation levels for
our executive officers are correlated to the achievement of these corporate goals and individual performance, consistent with our pay-for-performance philosophy.
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ISS Concern #3: With respect to Sages equity program, the proxy does not disclose a
timeframe under which the milestones must be achieved. |
Response #3: We have not assigned a specific
date for achievement of PSU milestones because timing is difficult to forecast with specificity for high-level, strategic goals. Our Board of Directors sets challenging milestone goals for the PSU program based on its determination of what will
enhance long-term stockholder value, and these milestones are not always met. For example, as disclosed in our Proxy Statement, a performance milestone from the 2019 annual PSU award was not achieved and the corresponding awards expired without
vesting.
If you have any concerns, please let us know, and we would appreciate the opportunity to discuss them with you.
FOR ALL THESE REASONS, WE ASK THAT SAGE STOCKHOLDERS
VOTE FOR THE SAY-ON-PAY PROPOSAL