We are a high growth, biotechnology company at the forefront of delivering sustainable solutions that are better for people and the planet. To accelerate the
worlds transition to sustainable consumption, we create, manufacture, and commercialize consumer products and ingredients that reach more than 300 million consumers. Currently, the largest driver of our revenue is derived from
marketing and selling Clean Beauty & Personal Care and Health & Wellness consumer products through our direct-to-consumer ecommerce platforms and
a growing network of retail partners. We also sell sustainable ingredients to sector leaders that serve Flavor & Fragrance (F&F), Nutrition, Food & Beverage, and Clean Beauty & Personal Care end markets.
In 2021, we delivered record total revenue of $342 million, representing a 97% increase
over the prior year. We also delivered record consumer revenue of $32 million, an increase of 86% over the prior year, driven by strong performance from our three legacy brands,
Biossance®, Pipette® and PurecaneTM, and solid early-stage performance of the
newly launched brands, particularly Rose, Inc.TM and JVNTM. Our technology access revenue of $33 million increased by 54% compared to
the prior year, driven by growth in technology license revenue, including our new joint ventures with ImmunityBio (vaccine) and Minerva Foods (protein). In November 2021, we sold $690 million convertible senior notes due 2026 which
allowed us to simplify our capital structure, pay down restrictive debt arrangements, and provide working capital to support critical investments in R&D, product development, manufacturing and other initiatives as well as our long-term strategic
goals.
The primary objectives of our employee compensation program (including for our NEOs) in 2021 were to:
Our success depends on, among other things, attracting and retaining executive officers with experience and skills in a number of different areas as we continue to
drive improvements in our technology platform and production process, pursue and develop key commercial relationships, create and commercialize products, and establish a reliable supply chain and manufacturing organization.
Our business continues to be in an early stage of product development, with cash management being one key consideration for our strategy and operations. For 2021, we
intended to provide a competitive compensation program that would enable us to attract and retain the top executive officers and employees necessary to develop our business, while being prudent in the management of our cash and equity. Based on this
approach, we continued to aim to reward short-term and long-term performance with a total compensation package that included a mix of both cash and equity. Our compensation program was intended to align the interests of our executive officers, key
employees and stockholders and to drive the creation of sustainable stockholder value by providing long-term incentive compensation in the form of equity awards, including performance-based equity awards with challenging price-based milestones.
Our intent and philosophy in designing compensation packages at the time of hiring new executive officers is based on providing compensation that we believe is
sufficient to enable us to attract the necessary talent to grow our business, within prudent limits discussed above. The compensation of our executive officers following their initial hire is influenced by the amounts of compensation that we
initially agreed to pay them, as well as by our evaluation of their subsequent performance, changes in their levels of responsibility, retention considerations, prevailing market conditions, our financial condition and prospects, and our attempt to
maintain an appropriate level of internal pay parity in the compensation of existing executive officers relative to the compensation paid to more recently hired executive officers.
We compensate our executive officers with fixed compensation (base salary) and variable compensation (cash bonuses and equity awards). We believe this combination of
cash and equity compensation, subject to strategic allocation between these components, is largely consistent with the forms of compensation provided by other companies with which we compete for executive talent, and, as such, matches the
expectations of our executive officers and the market for executive talent. We also believe that this combination provides appropriate incentive levels to retain our executive officers, reward them for performance in the short term and induce them
to contribute to the creation of value in the Company over the long term. We view the different components of our executive compensation program as distinct, each serving particular functions in furthering our compensation philosophy and objectives,
and together, providing a holistic approach to achieving such philosophy and objectives.
A significant portion of the target total direct compensation for our CEO
and our other NEOs is structured as variable or at-risk compensation, with payouts and equity award values and vesting dependent upon the Companys performance. This aligns our NEOs interests with those of our stockholders for
near- and long-term performance.
Executive Compensation | Elements of Executive Compensation
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factors to those described above with respect to the determination of base salary. For subsequent years, target cash bonus opportunities for our executive officers may be adjusted by the LDICC
based on various factors, including any adjustment to base salary, competitive market practices, and the other factors described above with respect to determination of base salary. |
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Long-Term
Equity |
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Time-Vesting
Equity Awards |
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Our equity awards are designed to be
sufficiently competitive to allow us to attract and retain talented and experienced executive officers. In 2021, we granted restricted stock unit (RSU) awards or a combination of RSUs and stock option awards to our executive officers.
Stock options are granted with an exercise price equal to the fair market value of our common stock on the date of grant; accordingly, such stock options will have value to our executive officers only if the market price of our common stock
increases after the date of grant. RSU awards represent the right to receive full-value shares of our common stock without payment of any exercise or purchase price. The relative weighting between the stock options and RSU awards granted to our
executive officers is based on the LDICCs review of competitive market practices.
Typically, we grant stock options with four-year vesting schedules, with 25% of the shares of our common stock subject to the options vesting after one year and monthly
thereafter, subject to continued service through each vesting date. Generally, RSU awards have three-year vesting schedules, with one-third of the units subject to the awards vesting annually over three years,
subject to continued service through each vesting date. We believe such vesting schedules are generally consistent with the stock option and RSU award granting practices of our peer group companies. In May 2021, the LDICC approved RSU awards with non-standard vesting terms to certain of our NEOs in recognition of significant achievements, the details of which are described below under 2021 CompensationEquity Awards.
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Performance-Vesting Equity
Awards |
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In 2021, the LDICC approved equity awards
to our CEO, CFO and COO consisting of RSUs subject to performance-based vesting conditions as described in more detail below under 2021 CompensationEquity Awards2021 Performance Equity Awards.
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Other Equity Awards |
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In addition to annual equity awards, we grant equity awards to our executive
officers in connection with their hire, or, as applicable, their promotion from other roles at the Company or in connection with significant changes in responsibilities, in response to retention needs or to recognize outstanding performance or
incentivize specific performance. The size of the initial new hire equity awards is based on the executive officers position with us and takes into consideration the executive officers base salary and other compensation as well as an
analysis of the equity award grant and compensation practices of our peer group companies. Generally, the initial equity awards are intended to provide the executive officer with an incentive to build value in the Company over an extended period of
time, which is consistent with our overall compensation philosophy. While we have incurred operating losses and dedicated substantial amounts of cash to critical capital expenditures and operations, and as a result, set base salaries and target cash
bonus opportunities that were, in certain cases, lower than those offered by competing employers, we have sought to attract executive officers to join us by granting equity awards that would have the potential to provide significant value if we are
successful. |
38 AMYRIS, INC. 2022 PROXY STATEMENT
Executive Compensation | Compensation Decision-Making Process
Stockholder Say-on-Pay Votes
At our 2020 Annual Meeting of Stockholders, our stockholders voted, on an advisory basis, on the
compensation of our NEOs (commonly referred to as a stockholder say-on-pay vote). In 2020, 98% of the votes cast on the stockholder say-on-pay proposal approved, on a non-binding advisory basis, the compensation of our NEOs as summarized in our 2020 Proxy Statement.
The LDICC believes that this affirms our stockholders support of our approach to executive compensation. Accordingly, our executive compensation approach remained generally consistent in 2021 except for the addition of new performance-based
equity awards to our CEO, CFO and COO, as described in more detail below under 2021 CompensationEquity Awards2021 Performance Equity Awards. Our stockholders voted to approve the CEOs performance-based equity award at
our special meeting of stockholders in July 2021, which we believe affirmed their support for this grant.
In addition, in 2017 our stockholders approved, and our
Board subsequently adopted, a three-year interval for conducting future stockholder say-on-pay votes. Our stockholders will again be voting, on an advisory basis, on the
compensation of our NEOs at our 2023 Annual Meeting of Stockholders.
Compensation Decision-Making Process
Under the charter of the LDICC, our Board has delegated to the LDICC the authority and responsibility to discharge the responsibilities of our Board
relating to the compensation of our executive officers. This includes, among other things, the review and approval of the compensation of our executive officers and of the terms of any compensation agreements with our executive officers. For more
information regarding the functions and composition of the LDICC, please refer to Proposal 1Election of DirectorsBoard Committees and Meetings above.
In general, the LDICC is responsible for the design, implementation, and oversight of our executive compensation program. In accordance with its charter, the LDICC
determines the annual compensation of our CEO and other executive officers and reports its compensation decisions to our Board. The LDICC also administers our equity compensation plans, including our 2020 Equity Incentive Plan (the 2020
EIP) and 2010 Employee Stock Purchase Plan. Generally, our Human Resources, Finance and Legal departments work with our CEO to design and develop new compensation programs applicable to our executive officers and non-employee directors, to
recommend changes to existing compensation programs, to recommend financial and other performance targets to be achieved under those programs, to prepare analyses of financial data, to prepare peer compensation comparisons and other LDICC briefing
materials, and to implement the decisions of the LDICC. Our Chief People Officer also meets separately with the LDICCs compensation consultant, Compensia (as defined below), to convey information on proposals that management may make to the
LDICC, as well as to allow Compensia to collect information about the Company to develop its recommendations. In addition, our CEO conducts reviews of the performance and compensation of our other executive officers, and based on these reviews and
input from Compensia and our Human Resources department, makes recommendations regarding the annual total direct compensation for such executive officers directly to the LDICC. In the case of our CEOs compensation, Compensia reviews and
analyzes relevant competitive market data with the LDICC, and makes a recommendation regarding our CEOs compensation to the LDICC.
Our Board has established
a Management Committee for Employee Equity Awards (the MCEA), consisting of our Chief People Officer and our CFO. The MCEA may grant equity awards to employees or consultants who are not executive officers (as that term is defined in
Section 16 of the Exchange Act and Rule 16a-1 promulgated under the Exchange Act) of the Company, provided that the MCEA is only authorized to grant equity awards that meet grant guidelines approved by our Board or the LDICC. These guidelines set
forth, among other things, any limit imposed by our Board or the LDICC on the total number of shares of our common stock that may be subject to equity awards granted to employees or consultants by the MCEA, and any other requirements imposed by our
Board or the LDICC.
AMYRIS, INC. 2022 PROXY STATEMENT 39
Executive Compensation | Compensation
Decision-Making Process
Role of Compensation Consultant
Under its
charter, the LDICC has the authority, at the Companys expense, to retain legal and other consultants, accountants, experts and compensation or other advisors of its choice to assist the LDICC in connection with its functions. Since 2012, the
LDICC has retained Compensia, Inc. (Compensia), a national compensation consulting firm, to provide advice and guidance on our executive compensation policies and practices and relevant information about the executive compensation
practices of similarly situated companies.
In connection with an annual review of our executive compensation program for 2021, Compensia provided the following
services:
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reviewed and provided recommendations on the composition of our compensation peer group, and provided compensation data
relating to certain executives at the selected peer group companies; |
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conducted a review of the target total direct compensation arrangements for our executive officers; |
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provided advice on executive officers compensation, including the composition of base salary, our short-term
incentive (cash bonus) plan and long-term incentive (equity) plans; |
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conducted a review of the annual cash retainers and equity incentive compensation opportunities for our non-employee
directors under our non-employee director compensation program; |
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assisted with the design of our 2021 performance-based equity awards for our CEO, CFO and COO, including an analysis of
market trends and best practices relating to performance-based equity awards; |
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updated the LDICC on emerging trends/best practices and regulatory requirements in the area of executive officer and
non-employee director compensation, including cash and equity compensation; |
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provided advice and recommendations regarding non-executive employee compensation equity awards; |
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assisted in the preparation of materials for executive compensation proposals in advance of LDICC meetings, including 2021
compensation levels for certain of our executive officers and the design of our cash bonus, equity award, severance, and change in control programs and other executive benefit programs; and |
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reviewed and advised the LDICC on materials relating to executive compensation prepared by management for LDICC
consideration. |
Compensia, under the direction of the LDICC, may continue to periodically conduct a review of the competitiveness of our executive
officer compensation program, including base salaries, cash bonus opportunities, equity awards and other executive officer benefits, by analyzing the compensation practices of companies in our compensation peer group, as well as data from
third-party compensation surveys. Generally, the LDICC uses the results of such analyses to assess the competitiveness of our executive officers target total direct compensation, and to determine whether each component of such target total
direct compensation is properly aligned with reasonable practices among our peer companies.
The LDICC has also retained Compensia for assistance in reviewing and
making recommendations to our Board regarding the compensation program for our non-employee directors and to provide competitive market data and materials with respect to non-employee director compensation to the LDICC.
In March 2021, the LDICC reviewed the independence of Compensia under applicable compensation consultant independence rules and standards and determined that Compensia
did not have any relationships with the Company or any of its executive officers or directors or any conflicts of interest that would impair Compensias independence.
40 AMYRIS, INC. 2022 PROXY STATEMENT
Executive Compensation | 2021
Peer Group
Use of Competitive Data
To monitor the
competitiveness of our executive officers compensation, in November 2020, the LDICC approved a compensation peer group (the Peer Group) to be used in connection with its 2021 compensation deliberations that analyzed the
compensation of executive officers in comparable positions at similarly-situated companies. In March 2021, based on a significant increase in our market capitalization, the LDICC approved changes to the Peer Group for its 2021 compensation
deliberations. The data gathered from the Peer Group was used as one factor in setting executive officer pay levels (including cash and equity compensation), incentive plan practices, severance and change-in-control practices, equity utilization
pay/performance alignment and non-employee director compensation.
In addition to reviewing the compensation practices of the Peer Group, the LDICC looks to the
collective experience and judgment of its members and advisors, as well as relevant industry survey data, in determining the target total direct compensation and the various compensation components provided to our executive officers.
2021 Peer Group
The Peer Group for setting 2021
compensation included a cross-section of publicly traded, U.S.-based companies of similar size to us based primarily on revenue (less than $600 million) and enterprise value (between $800 million and $13 billion), with additional refinement criteria
based on number of employees, R&D expenditures, and the related industries of the companies (biotechnology, life sciences, chemicals, food and personal products) and input from the LDICC and management. Based on these criteria, the following
companies were included in the Peer Group approved in March 2021 by the LDICC for use in assessing the market position of our executive compensation for 2021:
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2021 Peer Group |
American Vanguard
Balchem Berkeley Lights
Beyond Meat Codexis
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e.l.f. Beauty
Freshpet Green Thumb Industries
Hawkins Hims & Hers Health |
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Livent
Medifast Phibro Animal Health
Twist Bioscience USANA Health Sciences |
While the LDICC does not believe that the Peer Group data is appropriate as a stand-alone tool for setting executive compensation due to
the unique nature of our business, it believes that this information is a valuable resource during its decision-making process.
The LDICC references peer data as
data points in its overall determination of our executive compensation program, but does not benchmark its compensation decisions to any particular level or against any specific member of the Peer Group. The LDICC believes the current total target
compensation of our NEOs is reasonable and appropriate because we operate in a highly competitive and rapidly evolving market, and we expect competition among companies in our market to continue to increase. Our ability to compete and succeed in
this environment is directly correlated to our ability to recruit, incentivize and retain talented individuals in the areas of product development, sales, marketing, services and general and administrative functions. The market for skilled personnel
in these areas is very competitive and our LDICC believes that our current target level for total direct compensation is necessary to both retain our critical executive officers and attract top talent to contribute to the Companys growth and
success.
Equity awards have been a significant component in our overall compensation package, and we believe that they will remain an important tool for
attracting, retaining and motivating our key talent by providing an opportunity for
AMYRIS, INC. 2022 PROXY STATEMENT 41
Executive Compensation | Compensation Risk
Management
ownership, participation and
wealth creation as a result of our long-term success. To this end, in May 2021, the LDICC approved annual equity awards for our CFO and CLO and special performance-based equity awards for our CEO, CFO and COO, the details of which are described
below under 2021 CompensationEquity Awards2021 Performance Equity Awards. Our 2021 CEO performance equity award (the CEO PSU Award) was conditioned on the approval by our stockholders and was approved by our
stockholders in July 2021.
In determining the size of the annual equity awards, the LDICC considered the retention value of existing awards held by our NEOs
(taking into account option exercise prices and the prevailing market value of our common stock), the executive officers overall compensation packages, practices at the companies in the Peer Group and the responsibilities, performance,
anticipated future contributions and retention risk of our NEOs. In determining the size of each of the 2021 Performance Equity Awards granted to certain of our NEOs the LDICC considered the criticality of each of their roles and low retention value
of existing awards held by such NEOs.
Compensation Risk Management
In November 2020 and November 2021, the LDICC determined, through discussions with management and Compensia, that our policies and practices of compensating our
employees, including our executive officers, are not reasonably likely to have a material risk to us. The assessments conducted by the LDICC focused on the key terms of our bonus plans and equity compensation programs in 2020 and 2021, and our plans
for such programs in 2022, evaluating the risk factors in our compensation programs in four key areasfinancial, operational, reputational, and talent. The LDICC focused on whether our compensation programs created incentives for risk-taking
behavior and whether existing risk mitigation features and policies were sufficient in light of the overall structure and composition of our compensation programs. Among other things, the LDICC considered the following aspects of our overall
compensation programs:
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Our cash bonus plan applies only to our executive officers and certain employees involved in sales activities and provides
for a maximum total bonus funding available for payout of 120% of target funding, with payouts ranging from 0% to 200% of an individuals target annual cash bonus opportunity, emphasizing Company performance over individual performance
objectives. |
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Long-term equity compensation programs are designed to reward executives and other participants for driving sustainable
and profitable growth for stockholders; |
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Equity incentive awards for our executive officers have included different types of equity instruments, which helps to
diversify the executive officers interests and limit excessive risk taking; |
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The vesting periods for our time-based equity awards are designed to encourage executives and other participants to focus
on sustained stock price appreciation; |
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Our system of internal controls over financial reporting, standards of business conduct, and compliance programs reduce the
likelihood of manipulation of our financial performance to enhance payments under our bonus and sales compensation plans; |
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We have a clawback or recoupment policy for certain performance-based incentive compensation of our executive officers; and
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Our Insider Trading Policy prohibits all employees from pledging stock, engaging in short sales, or hedging transactions
involving our stock. |
Based on these considerations, the LDICC determined that our compensation programs, including our executive and
non-executive compensation programs, provide an appropriate balance of incentives and do not encourage our executive officers or other employees to take excessive risks or otherwise create risks that are likely to have a material adverse effect on
us.
42 AMYRIS, INC. 2022 PROXY STATEMENT
Executive Compensation | 2021
Compensation
2021 Compensation
Background
In designing the compensation program and making decisions for our executive officers for 2021, the LDICC sought to balance achievement of
critical operational goals with retention of key personnel, including our executive officers. Accordingly, the LDICC focused in particular on implementing a robust equity compensation program in order to provide strong retention incentives in a
challenging and highly competitive environment for top talent. It also focused on cash management in setting target total cash compensation (including base salary and target annual cash bonus opportunity levels) for our executive officers. Another
key theme for 2021 was establishing strong incentives to drive our performance, including continued emphasis on Company performance goals over individual goals in the 2021 cash bonus plan and on equity compensation for longer-term upside potential
and sharing in Company growth.
Base Salaries
During 2021, the LDICC reviewed the base salaries, target annual cash bonus opportunities and target total cash compensation of our executive officers against our
Peer Group and industry survey data, and as a result of such analysis, as well as consideration of the factors described above under Compensation Philosophy and Objectives and Elements of CompensationBase Salary, approved (a) an
increase to the base salary of Mr. Melo from $650,000 to $750,000 effective May 16, 2021, in recognition of his criticality to driving the Companys strategic growth and investment initiatives, (b) an increase to the base salary of Mr.
Kieftenbeld from $420,000 to $460,000 effective April 1, 2021, in recognition of his expanded role as the Companys Chief Administration Officer and in alignment with general market increases, and (c) an increase to the base salary of Ms.
Kelsey from $395,000 to $425,000, effective May 16, 2021, to remain in line with our targeted competitive market for total cash compensation. Mr. Alvarezs base salary remained unchanged in 2021.
Cash Bonuses
In November 2020, the LDICC
approved the 2021 cash bonus plan architecture for our executive officers consistent with the cash bonus plan for 2020, pending the approval of quarterly and annual target levels for each performance metric upon finalization of the Companys
business plan for 2021. In May 2021, the target levels for the performance metrics were approved and the weighting of certain performance metrics selected for use in the 2021 cash bonus plan was amended, as further detailed below.
Under the 2021 cash bonus plan, our executive officers were eligible for cash bonuses based on the achievement of Company performance metrics for each quarter in 2021,
with a portion of their annual target cash bonus opportunities allocated to annual Company and individual performance. The 2021 cash bonus plan provided for funding and payout of cash bonus awards if the Company achieved target levels set for GAAP
revenue (both quarterly and annual), operating expense (both quarterly and annual), product gross margin (quarterly) and total gross margin (annual). For purposes of the 2021 bonus plan, GAAP revenue means total Company revenue as
reported, operating expense means total cash operating expense (i.e., excludes such items as depreciation and amortization and stock compensation), product margin means margin generated relative to product related revenue,
and gross margin means margin generated relative to total revenue. Payouts under the 2021 cash bonus plan were made following a review of our results and performance each quarter and, for the fourth quarter and annual components,
following a review that occurred in March 2022. The 2021 cash bonus plan provided for a 60% weighting for quarterly achievement (with each quarter worth 15% of the total bonus fund for the year) and 40% for full year achievement. The 2021 cash bonus
plan and the selection of these performance metrics intended to provide a balanced focus on both our long-term strategic goals and shorter-term quarterly operational goals.
The total funding possible under the 2021 cash bonus plan was based on a cash value (or the target bonus fund) determined by the executive officers
target annual cash bonus opportunities. The target annual cash bonus
AMYRIS, INC. 2022 PROXY STATEMENT 43
Executive Compensation | 2021
Compensation
opportunities for our
executive officers in 2020 varied by individual, but were generally set between 50% and 100% of their annual base salary. In May 2021, in connection with the Boards review of the annual 2021 Company business plan and budget, the LDICC reviewed
our executive officers target annual cash bonus opportunities as part of its review of target total cash compensation for similar roles among executive officers at companies in the Peer Group, as supplemented by relevant industry survey data,
and, as a result of such analysis, as well as consideration of the factors described above under Compensation Philosophy and Objectives and Elements of CompensationCash Bonuses, approved no changes to the target annual cash bonus
opportunities for our executive officers.
The quarterly and annual funding of the 2021 cash bonus plan was based on achievement of the following company
performance metrics for the applicable quarter and full year 2021: GAAP revenue (weighted 50% for each quarterly and annual period), operating expenses (weighted 20% for each quarterly and annual period), product gross margin (weighted 30% for the
quarterly period), and total gross margin (weighted 30% for the annual period). For each quarterly period and for the annual period under the 2021 cash bonus plan, threshold, target, and superior performance
levels were set for each applicable performance metric, which performance levels were intended to capture the relative difficulty of achievement of that metric. In May 2021, the weighting of the operating expense and product gross margin and total
gross margin metrics were recalibrated to reflect the impact on such performance metrics by consumer brands growth and increased investment in the selling and marketing efforts to support the Companys brand growth, due to expected launch
of five additional consumer brands in the second half of 2021. Prior to the amendment, operating expenses was weighted at 30% for each quarterly and annual period, and product/total gross margin was weighted at 20% for the quarterly and annual
periods.The associated targets of each of these two metrics were not modified such that the same levels of achievement were required. The LDICC determined that it was reasonable and necessary to recalibrate of the weighting of these two metrics in
order for the 2021 cash bonus plan to reflect the Companys investment in the Companys brand growth as noted above, and to preserve incentive and retentive value at a time when employee engagement and focus are critical. The LDICC did not
modify the weighting of GAAP revenue, which comprises the largest portion of the 2021 cash bonus plan. The 2021 cash bonus plan remained challenging and difficult to achieve without meaningful effort.
As shown below, if we were to achieve the minimum level for any performance metric, we would receive 50% funding for that metric. If the collective funding
of all performance metrics was below 50%, we would receive no funding. If we were to achieve between the minimum and target levels for any performance metric, we would receive pro rata funding between 50% and 100% for that metric.
If we were to achieve between the target and maximum levels for any performance metric, we would receive pro rata funding between 100% and 200% for that metric. Funding was capped at 200% of target for each performance metric
regardless of performance exceeding the maximum level.
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Performance Range |
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Performance Metrics |
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GAAP Revenue ($m) |
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50% |
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80% |
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100% |
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120% |
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50% |
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100% |
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200% |
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Operating Expenses ($m) |
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20% |
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90% |
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100% |
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110% |
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50% |
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100% |
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200% |
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30% |
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90% |
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100% |
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110% |
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50% |
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100% |
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Product gross margin for each quarterly period and total gross margin for the annual period. |
Any payouts for the quarterly bonus periods would be the same as the funded level (provided the recipient meets eligibility requirements), subject to the final approval
of the LDICC. Payouts for the annual bonus period would be made from the aggregate funded amount based on Company and individual performance, and could range from 0% to 200% of an individuals funded amount for the annual bonus period.
The LDICC chose to emphasize Company performance goals for the quarterly and annual bonus plan periods given the critical importance of our short-term strategic goals,
but also to retain reasonable incentives and rewards for
44 AMYRIS, INC. 2022 PROXY STATEMENT
Executive Compensation | 2021
Compensation
exceptional individual
performance, recognizing the value of such incentives and rewards to our operational performance and to individual retention.
Based on the foregoing bonus plan
structure, individual bonuses were awarded each quarter based on the LDICCs assessment of Company achievement, and with respect to the annual bonus, the LDICCs assessment of Company achievement as well as each executive officers
contributions to such achievement, his or her progress toward achieving his or her individual performance goals, and his or her demonstrating our core values. Actual payment of any bonuses with respect to 2021 remained subject to the final approval
of the LDICC.
Company Performance Metrics. The quarterly and annual weighting and actual achievement level for each Company
performance metric are described below.
The applicable target levels for each quarter were discussed and evaluated based on quarterly and annual performance and
continued development of our business and operating plans for 2021 and beyond. In March 2022, the LDICC discussed and evaluated the fourth quarter 2021 as well as the full year 2021 results. Achievement levels were approved by the LDICC following
each period under the 2021 annual cash bonus plan. The annual and fourth quarter target levels were amended by the LDICC in November 2021 to reflect new revenue guidance provided internally and externally. Due to supply chain challenges in the third
and fourth quarters of 2021, including access to packaging components and ingredients, our full year 2021 revenue estimate was reduced in November 2021. As a result, the LDICC reviewed the GAAP revenue target performance metric and approved
amendments to the minimum, target and maximum levels of such performance metric for the fourth quarter and annual periods to (i) maintain the alignment of such metric with revenue guidance provided to the market, while still maintaining GAAP revenue
as a challenging goal for such periods, and (ii) continue the effectiveness of the 2021 bonus plan as an incentive and retention tools not only to our NEOs but also to the other employees under such plan, especially given the highly competitive
market in which we operate.
Degree of Difficulty in Achieving Performance Goals. The LDICC considered the likelihood of
achievement when recommending and approving, respectively, the Company and individual performance goals and bonus plan structures for each of the 2021 annual cash bonus plan periods, but it did not undertake a detailed statistical analysis of the
difficulty of achievement of each measure. For 2021, the LDICC considered the 70% weighted average achievement level to be attainable with normal effort, 100% to be challenging but achievable with significant effort, requiring circumstances to align
as predicted, and any amounts in excess of 100% to be difficult to achieve, requiring additional sources of revenue, breakthroughs in technology, manufacturing operations and process development, business development, and exceptional levels of
effort on the part of the executive leadership team, as well as favorable external conditions.
AMYRIS, INC. 2022 PROXY STATEMENT 45
Executive Compensation | 2021
Compensation
2021 Quarterly and Annual Bonus Plan Funding and Award Decisions. In each of May 2021, August 2021, November 2021
and March 2022, the LDICC determined that our quarterly and annual performance goals were achieved as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Performance Goal |
|
Weight |
|
|
Weighted
Achievement Level |
|
|
Funding Level |
|
|
|
|
|
Q1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Revenue |
|
|
50 |
% |
|
|
48 |
% |
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
20 |
% |
|
|
19 |
% |
|
|
|
|
|
|
|
|
Product Gross Margin |
|
|
30 |
% |
|
|
60 |
% |
|
|
|
|
|
|
|
|
Total Q1 |
|
|
100 |
% |
|
|
127 |
% |
|
|
127 |
% |
|
|
|
|
Q2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Revenue |
|
|
50 |
% |
|
|
31 |
% |
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
20 |
% |
|
|
25 |
% |
|
|
|
|
|
|
|
|
Product Gross Margin |
|
|
30 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
Total Q2 |
|
|
100 |
% |
|
|
56 |
% |
|
|
85 |
%(1) |
|
|
|
|
Q3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Revenue |
|
|
50 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
20 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
Product Gross Margin |
|
|
30 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
Total Q3 |
|
|
100 |
% |
|
|
0 |
% |
|
|
64 |
%(1) |
|
|
|
|
Q4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Revenue |
|
|
50 |
% |
|
|
59 |
% |
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
20 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
Product Gross Margin |
|
|
30 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
Total Q4 |
|
|
100 |
% |
|
|
59 |
% |
|
|
85 |
%(1) |
|
|
|
|
ANNUAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Revenue |
|
|
50 |
% |
|
|
51 |
% |
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
20 |
% |
|
|
12 |
% |
|
|
|
|
|
|
|
|
Total Gross Margin |
|
|
30 |
% |
|
|
37 |
% |
|
|
|
|
|
|
|
|
Total Annual |
|
|
100 |
% |
|
|
100 |
% |
|
|
99 |
% |
(1) |
The LDICC approved discretionary increases in the cash bonus paid to all eligible participants under the cash bonus plan,
including the named executive officers, for the quarterly bonus payments in the second, third and fourth quarters of 2021 as discussed below. |
Individual Performance Goals. For the annual portion of the 2021 cash bonus plan tied to individual performance, the LDICC considered several factors, including the following:
◾ |
|
Our CEOs performance reflects his overall leadership of the Company. Under his leadership, the Company delivered
strong year-over-year sales revenue growth, oversaw strategic partnerships and new brand launches, enhanced customer impact, and improved overall Company operations. Importantly, he also led on advancing strategic initiatives and transactions for
the Company. |
◾ |
|
Our CFOs performance reflects his leadership of the Companys finance, human resources, IT, corporate
communications, investor relations, and ESG functions. Under his leadership, the Company made significant improvements in our financial processes, internal controls, cash management, and investor relations activities. He oversaw a successful
recapitalization of the Companys balance sheet, including the planning and execution of large, complex equity and debt offerings. He led the Companys inaugural ESG report and has been instrumental in the completion of strategic
transactions, M&A and new brand launches. |
46 AMYRIS, INC. 2022 PROXY STATEMENT
Executive Compensation | 2021
Compensation
◾ |
|
Our COOs performance reflects his leadership of the Companys manufacturing, engineering, environmental health
& safety, and supply chain functions. Under his leadership, the Company is on track to complete construction of the new Brazil manufacturing facility, and the Company continued to demonstrate a strong safety track record and scale the
development of molecules into production, launched new consumer brands and improved consumer brand supply chain operations. |
◾ |
|
Our CLOs performance reflects her leadership of the Companys legal and compliance functions. Under her
leadership, the Legal function provided critical support for the execution of strategic partnerships, M&A transactions, and equity and debt financing transactions, the launch of new brands, the management of ongoing litigation and investigation
matters, leadership on the Companys ESG and DEI initiatives, and improvements in the Companys compliance program. |
The LDICC
considered individual and company performance in approving the following cash bonus awards under the 2021 cash bonus plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
2021 Cumulative Quarterly Bonus Payouts ($) |
|
2021 Annual Portion Bonus Payout
($) |
|
2021 Aggregate Annual and Quarterly Bonus Payouts ($) |
|
Annual Bonus Target ($) |
|
2021 Actual Bonus Earned as a %
of Target Bonus |
|
|
|
|
|
|
John Melo |
|
|
|
250,980 |
|
|
|
|
445,500 |
|
|
|
|
696,480 |
|
|
|
$ |
730,000 |
|
|
|
|
95 |
% |
|
|
|
|
|
|
Han Kieftenbeld |
|
|
|
151,712 |
|
|
|
|
282,348 |
|
|
|
|
434,060 |
|
|
|
$ |
447,700 |
|
|
|
|
97 |
% |
|
|
|
|
|
|
Eduardo Alvarez |
|
|
|
191,950 |
|
|
|
|
396,000 |
|
|
|
|
577,950 |
|
|
|
$ |
500,000 |
|
|
|
|
116 |
% |
|
|
|
|
|
|
Nicole Kelsey |
|
|
|
74,037 |
|
|
|
|
84,150 |
|
|
|
|
158,187 |
|
|
|
$ |
209,500 |
|
|
|
|
76 |
% |
We believe that the payment of these awards was appropriate because the 2021 cash bonus plan appropriately held our NEOs accountable for
achievement of Company and individual goals, and the payouts were reasonable and appropriate in light of our progress towards our business objectives. With respect to the quarterly bonus payments in the second, third and fourth quarters of 2021, the
LDICC, to recognize the effective execution and significant progress made on certain critical business goals, in its discretion approved amounts in excess of the applicable funded levels under the cash bonus plan, which resulted in additional cash
bonus payouts to each of our NEOs in the amount of $132,650 in the aggregate to Mr. Melo, $82,248 in the aggregate to Mr. Kieftenbeld, $89,400 in the aggregate to Mr. Alvarez, and $37,778 in the aggregate to Ms. Kelsey, as reflected in the
Summary Compensation Table below.
Performance Bonuses. In addition, in May 2021, the LDICC approved cash bonuses of
(a) $400,000 to Mr. Melo in recognition of his extraordinary efforts in negotiating, structuring and consummating certain transformative transactions for the Company in the first quarter of 2021, including the sale of exclusive rights to the
Companys flavor and fragrance product portfolio DSM Nutritional Products Ltd., (b) $100,000 to Mr. Kieftenbeld in recognition of his extraordinary efforts in procuring and negotiating a licensing transaction with Ingredion Incorporated, and
(c) $75,000 to Mr. Alvarez in recognition of his extraordinary efforts in assisting in the negotiation and closing of the transaction with Ingredion Incorporated. In December 2021, the LDICC approved a cash bonus of $5,000 to Ms. Kelsey in
recognition of her efforts in resolving a government investigation.
Equity Awards
The LDICC approved equity awards for the executive officers consisting of time-based focal awards, performance-based equity awards, and one-time recognition
awards, as described below.
2021 Focal Equity Awards. With respect to the focal awards, the LDICC determined the allocation of
equity awards between stock options and RSU awards after consultation with Compensia, in evaluating the practices of our Peer Group and survey data and in consultation with management, taking into consideration, among other
AMYRIS, INC. 2022 PROXY STATEMENT 47
Executive Compensation | 2021
Compensation
things, the appropriate
balance between rewarding previous performance, retention objectives, upside value potential tied to our and the executive officers future performance and the mix of the executive officers current vested and unvested equity holdings. The
size of the focal awards varied among the applicable NEOs based on the value of unvested equity awards already held by him or her, his or her relative contributions during 2020, and anticipated levels of responsibility among the NEOs for key
corporate objectives in 2021.
In May 2021, the LDICC approved (i) a focal award to Mr. Kieftenbeld of an RSU award covering 100,000 units subject to the terms
described below and (ii) a focal award to Ms. Kelsey of an RSU award covering 37,500 units and an option to purchase 12,500 shares of our common stock subject to the terms described below. In lieu of time-based focal awards, Messrs. Melo and Alvarez
received performance-based equity awards as described below.
In accordance with our policy regarding equity award grant dates, the focal awards to Mr. Kieftenbeld
and Ms. Kelsey were granted on May 24, 2021, the first business day of the week following the week in which such awards were approved, with the exercise price of the stock option granted to Ms. Kelsey set at $13.39 per share, the closing price of
our common stock on Nasdaq on such date, in accordance with the terms of the 2020 EIP. This stock option vests over four years, with 25% of the shares subject to the option vesting one year from the vesting commencement date on May 24, 2021, and the
remainder vesting over the following three years in equal monthly installments. The RSU awards to Mr. Kieftenbeld and Ms. Kelsey vest in three equal annual installments on June 1 of each of 2022, 2023 and 2024. Each unit granted pursuant to the
focal awards represents a contingent right to receive one share of our common stock for each unit that vests.
2021 Performance Equity
Awards. We believe that granting performance-based RSU awards incentivizes our executive officers in a manner that aligns their interests with our long-term strategic direction and the interests of our stockholders in support of long-term value
creation. As such, in May 2021, the LDICC and our Board approved, as applicable (the 2021 Performance Equity Awards):
◾ |
|
CEO PSU Award: a grant to Mr. Melo of a performance-vesting restricted stock unit award representing the right to
receive up to 6,000,000 shares of our common stock under our 2020 EIP based on the achievement of four specified stock price performance metrics (as detailed below) over a four-year period, contingent upon approval by our stockholders of the CEO PSU
Award, which approval was obtained at our 2021 special meeting of stockholders held on July 26, 2021. Upon approval of the CEO PSU Award, the 2018 CEO PSO (as described below) was automatically cancelled and forfeited. |
◾ |
|
CFO PSU Award: a grant to Mr. Kieftenbeld of a performance-vesting restricted stock unit award (the CFO PSU
Award) representing the right to receive up to 300,000 shares of our common stock under our 2020 EIP on substantially the same terms as the CEO PSU Award. |
◾ |
|
COO PSU Award: a grant to Mr. Alvarez of a performance-vesting restricted stock unit award (the COO PSU Award)
representing the right to receive up to 600,000 shares of our common stock under our 2020 EIP subject to the achievement of certain highly strategic operational goals (as detailed below) prior to December 31, 2022. |
In accordance with our policy regarding equity award grant dates, the COO PSU Award was granted on May 24, 2021, and the CEO PSU Award and the CFO PSU Award were
granted on August 2, 2021, the first business day of the week following the week in which the CEO PSU Award was approved by our stockholders.
In structuring the
2021 Performance Equity Awards, our Board and the LDICC, in consultation with Compensia, considered at length which performance metrics would both meaningfully drive Company performance and create significant stockholder value. Our Board and the
LDICC considered a variety of factors, including, our continued growth, the highly competitive and dynamic synthetic biotechnology industry and the difficulty of predicting future performance in such an environment. In establishing the stock
price-based performance metric of the CEO PSU
48 AMYRIS, INC. 2022 PROXY STATEMENT
Executive Compensation | 2021
Compensation
Award and the CFO PSU
Award, our Board and the LDICC took into consideration a variety of factors, including the Companys growth trajectory. Accordingly, our Board and the LDICC concluded that a performance metric requiring the sustained achievement of increasing
share prices over a four-year performance period best enabled the Company to incentivize Messrs. Melo and Kieftenbeld over a longer-term horizon and align their respective success with that of our stockholders. In determining the size and
operational performance metrics of the COO PSU Award, the LDICC considered the retention value of existing awards held by Mr. Alvarez and the strategic relevance of certain operational goals to the Companys objectives and concluded that the
performance metrics under the COO PSU best incentivizes and retains Mr. Alvarez until the completion and full operation of the Companys manufacturing plant in Barra Bonita, Brazil and the facility in Reno, Nevada.
Our Board and the LDICC believe the selected structure and terms of the 2021 Performance Equity Awards (as described in detail below) will motivate our CEO, CFO, and
COO to perform against challenging and reasonably aggressive targets in alignment with our stockholders and will reward each of them for taking actions today that will create sustainable value for our stockholders for years to come. Our Board
and the LDICC also reviewed similar performance-based equity awards and total executive compensation of other public companies executives as a reference point for determining the size and terms of the 2021 Performance Equity Awards.
Upon our stockholders approval, and immediately prior to the effectiveness of the CEO PSU Award, the performance-based stock option to purchase up to 3,250,000
shares of our common stock granted to Mr. Melo in 2018 (the 2018 CEO PSO) was automatically cancelled and forfeited. In proposing the CEO PSU Award, the LDICC considered that the performance metrics of the 2018 CEO PSO had not been
achieved and could not be achieved prior to the conclusion of its term, due to changes in the Companys business and, as such, it no longer provided the intended incentive and retentive value for our CEO, whose leadership is critical to guide
the Company through an unprecedented period of growth, transformation and innovation, including strategic partnerships and new brand launches. The LDICC also reviewed the size and vesting schedule for the remaining unvested portion of all other
outstanding equity awards held by our CEO and determined that they were likewise insufficient to effectively incentivize performance and retention.
CEO PSU Award and CFO PSU Award
The CEO PSU Award and CFO PSU Award are performance-based RSU awards with a
direct relationship between the value of the equity awards and the fair market value of our common stock, thus Messrs. Melo and Kieftenbeld will receive compensation from their respective awards only to the extent that the Company achieves the
applicable stock price-based performance milestones.
Performance Metrics & Vesting. The CEO PSU Award and the CFO PSU Award will be eligible to
vest if the Company achieves four separate stock price-based performance metrics (each, a Stock Price Metric) from the date of grant through July 1, 2025 (the Performance Period) and any portion of the CEO PSU Award or
the CFO PSU Award, as applicable, for which performance is achieved will vest subject to Messrs. Melo or Kieftenbelds continued service as our CEO and CFO, respectively (CEO/CFO Service), with certain limited exceptions, as
discussed below.
Stock Price Performance Metrics. Each of the CEO PSU Award and CFO PSU Award are divided into four equal tranches as described in
the Performance Metrics Table below (each a Tranche). If the Target Volume Weighted Average Price, or Target VWAP, as described below, applicable to a Tranche is achieved during the Performance Period, that
Tranches shares will become eligible to vest subject to the applicable CEO/CFO Service on the applicable vesting dates, as discussed below. The units underlying any Tranche for which performance has been
AMYRIS, INC. 2022 PROXY STATEMENT 49
Executive Compensation | 2021
Compensation
achieved and that are
eligible to vest over time are referred to as Eligible RSUs. Each unit granted pursuant to the CEO PSU Award and the CFO PSU Award represents a contingent right to receive one share of our common stock for each unit that vests.
|
|
|
|
|
|
|
|
|
|
Performance Metrics
Table |
|
|
|
|
|
Tranche |
|
Target
VWAP |
|
CEO PSU
Total Tranche
RSUs |
|
CFO PSU
Total Tranche
RSUs |
|
Earliest
Vesting Commencement Date |
|
|
|
|
|
Tranche 1 |
|
$22.00 |
|
1,500,000 RSUs |
|
75,000 RSUs |
|
Not Applicable |
|
|
|
|
|
Tranche 2 |
|
$27.00 |
|
1,500,000 RSUs |
|
75,000 RSUs |
|
July 1, 2023 |
|
|
|
|
|
Tranche 3 |
|
$32.00 |
|
1,500,000 RSUs |
|
75,000 RSUs |
|
July 1, 2024 |
|
|
|
|
|
Tranche 4 |
|
$37.00 |
|
1,500,000 RSUs |
|
75,000 RSUs |
|
July 1, 2025 |
|
|
|
|
|
Total: |
|
|
|
6,000,000 RSUs |
|
300,000 RSUs |
|
|
|
|
|
|
|
|
|
|
|
The Stock Price Metric for a Tranche is achieved if the VWAP of our common stock for both a 120-trading day period and the
30-trading day period ending on the final day of the 120-trading day period equal or exceed the Target VWAP set forth in the Performance Metrics Table for such Tranche during the Performance Period. The Tranches will be measured separately
and multiple Tranches may be achieved simultaneously.
Our Board or the LDICC will certify whether the Stock Price Metric for any Tranche has been met.
The Target VWAP will be adjusted to reflect events such as a stock split or recapitalization in order to prevent diminution or enlargement of the benefits or potential
benefits intended to be made available under the CEO PSU Award and the CFO PSU Award, as applicable.
As further discussed above, our Board and the LDICC consider
the Stock Price Metrics to be a challenging hurdle. Our Board and the LDICC set the Stock Price Metrics to drive enhanced stockholder returns, and to further align Messrs. Melo and Kieftenbelds compensation opportunities to long-term
stockholder interests.
Time-Based Vesting Following Achievement of the Stock Price Metric. Upon our Boards or LDICCs certification of
achievement of a Tranches Stock Price Metric, 25% of the shares in such Tranche will vest with the remaining 75% vesting over the three subsequent quarters. For all but the first of the four Tranches, vesting will commence no earlier than
Earliest Vesting Commencement Date for such Tranche set forth in the Performance Metrics Table above. If the Stock Price Metric is achieved after the Earliest Vesting Commencement Date, the vesting schedule will commence
on the next occurring July 1, October 1, January 1 or April 1. For the first Tranche only, upon achievement of the Stock Price Metric, the vesting schedule will commence on the next occurring July 1, October 1,
January 1 or April 1.
Employment Requirement for Continued Vesting. Messrs. Melo or Kieftenbeld, as applicable, must be providing CEO/CFO Services
at the time of the achievement of a Tranches Stock Price Metric to be eligible to vest in the resulting Eligible RSUs. Mr. Melo must be employed by the Company, as its CEO, and Mr. Kieftenbeld must be employed by the Company, as its CFO,
or, in both cases, in another employment position, on each applicable time-based vesting date following the achievement of the applicable Stock Price Metric.
Termination of Employment. Except in the context of a change of control of the Company, there will be no acceleration of vesting of the CEO PSU Award or the CFO
PSU Award if the employment of Mr. Melo or Mr. Kieftenbeld, respectively, is terminated, or if they die or become disabled. In other words, termination of Mr. Melo or Mr. Kieftenbelds employment with the Company will preclude
their respective ability to earn any then-unvested portion of the CEO PSU Award or CFO PSU Award, as applicable, following the date of his termination.
50 AMYRIS, INC. 2022 PROXY STATEMENT
Executive Compensation | 2021
Compensation
Change of
Control. If the Company experiences a change of control, such as a merger with or purchase by another company, vesting under the CEO PSU Award and CFO PSU Award will not automatically accelerate.
In the event of a change of control of the Company, the performance under the CEO PSU Award and the CFO PSU Award will be determined as of the change of control. For
this change of control determination, a Stock Price Metric relating to any Tranche that has not yet been achieved prior to the change of control will be deemed achieved if the per share price (plus the per share fair market value of any other
consideration) received by our stockholders in the change of control equals or exceeds the applicable Stock Price Metric. To the extent a Stock Price Metric for a Tranche is achieved upon a change of control, the shares specified for such Tranche
will be subject to time-based vesting (the COC Time-Based RSUs), and such COC Time-Based RSUs will vest in four equal installments, with the first installment vesting upon the later of the date of the change of control and the Earliest
Vesting Commencement Date applicable to such Tranche as set forth in the Performance Metrics Table above and quarterly thereafter (except that the first Tranche will commence vesting on the date of the change of control and
quarterly thereafter), subject to the CEO/CFO Service on each such vesting date.
Notwithstanding the foregoing, if the employment of either of Mr. Melo or Mr.
Kieftenbeld is terminated without cause or he resigns for good reason in connection with the change of control, any then-unvested Eligible RSUs and then-unvested COC Time-Based RSUs will accelerate, subject to his satisfaction of certain terms and
conditions, including, but not limited to delivery of a release of claims, pursuant to the terms of the Severance Plan (as described below) and his related participation agreement thereunder.
To the extent a Stock Price Milestone for a Tranche is not achieved as a result of the change of control of the Company, such Tranche will be forfeited automatically
immediately prior to closing of the change of control and will never become vested.
The 2020 EIP provides that any or all outstanding awards issued thereunder,
including the CEO PSU Award and CFO PSU Award, may be continued, assumed or substituted (including, but not limited, with payment in cash) by the successor or acquiring corporation (if any) in a change of control of the Company. If the successor or
acquiring corporation (if any) of the Company refuses to assume, convert, replace or substitute the CEO PSU Award and CFO PSU Award in connection with a change of control, 100% of Messrs. Melo and Kieftenbelds then-unvested Eligible RSUs
and then-unvested COC Time-Based RSU will accelerate and become vested effective immediately prior to the closing of the change of control.
The treatment of the
CEO PSU Award and CFO PSU Award upon a change of control of the Company is intended to align Messrs. Melo and Kieftenbelds interests with the Companys other stockholders with respect to evaluating potential change of control offers.
Tax Withholding. Unless determined otherwise by the LDICC in advance of any vesting date, the tax withholding obligations owed upon settlement of any
portion of the CEO PSU Award and CFO PSU Award will be paid by a broker-assisted or same-day sale.
Clawback. In the event
of a restatement of the Companys financial statements previously filed with the SEC as a result of material noncompliance with financial reporting requirements (restated financial results) that results in a decline of the trading
prices of our common stock below the Stock Price Metrics and it is determined to be necessary to complete such a restatement prior to December 31, 2028, the Company may require forfeiture (or repayment, as applicable) of the portion of the CEO
PSU Award and/or CFO PSU Award in excess of what would have been earned or paid based on the restated financial results (whether or not the CEO and/or CFO remains an employee of the Company at such time).
AMYRIS, INC. 2022 PROXY STATEMENT 51
Executive Compensation | 2021
Compensation
COO PSU
Award
The COO PSU Award is a performance-vesting RSU award with a direct relationship between the value of the equity awards and the achievement
of certain highly strategic operational goals to the Company prior to December 31, 2022. Thus, Mr. Alvarez will receive compensation from his award only to the extent that the Company timely achieves six separate operational performance metrics
related to product production, brand launch, and manufacturing facility development (each, a COO Performance Metric) from January 1, 2021 through December 31, 2022 (the COO Performance Period). Each unit granted pursuant to
the COO PSU Award represents a contingent right to receive one share of our common stock for each unit that vests.
Performance Metrics & Vesting. The
COO PSU Award, which is up to 600,000 shares of our common stock, is divided into six tranches as described below (each a COO Tranche). If the COO Performance Metric applicable to a COO Tranche is achieved during the COO Performance
Period, that Tranches shares will vest. The units underlying any Tranche for which performance has been achieved are referred to as Eligible RSUs.
Two of the COO Tranches relate to our Reno plant. 90,000 shares under the COO PSU Award will vest upon achievement of each of the following relating to our Reno plant:
(i) certain production goals by December 31, 2021, (ii) certain production transitions by December 31, 2021, and (iii) certain plant commission and scale goals by December 31, 2022.
Four of the COO Tranches relate to our Barra Bonita plant. 144,000 shares under the COO PSU Award will vest upon achievement of certain construction goals by January
31, 2022. 96,000 shares under the COO PSU Award will vest upon certain plant commission goals by March 31, 2022. 90,000 shares under the COO PSU Award will vest upon achievement of each of the following: (i) certain contract transfer and production
plan goals by December 31, 2022, and (ii) certain production goals by December 31, 2022.
The details of the COO PSU Award goals pertain to confidential company
development and business plans, the disclosure of which in any additional granularity would result in competitive harm to the Company. Our Board and the LDICC believed that each of these goals would be significantly challenging and would
require a high level of performance in order to be achieved.
The LDICC will certify whether the COO Performance Metric for any COO Tranche has been met after the
conclusion of the COO Performance Period. There will be no partial or additional achievement to the extent achievement is below or above the target COO Performance Metric achievement specified above. Multiple COO Performance Metrics may be achieved
simultaneously. The Eligible RSUs will vest two weeks following the certification date, subject to Mr. Alvarezs continuous service.
Employment Requirement
for Continued Vesting. Mr. Alvarez must be providing services at the time the LDICC certifies achievement of a COO Tranche, with the COO Performance Metric eligible to vest in the resulting shares.
Termination of Employment. Except in the context of a change of control of the Company, there will be no acceleration of vesting of the COO PSU Award in the
event of termination, death, or disability. In other words, termination of Mr. Alvarezs employment with the Company will preclude his ability to earn any then-unvested portion of the COO PSU Award following the date of his termination.
Change of Control. If the Company experiences a change of control during the COO Performance Period, such as a merger with or purchase by another company,
the COO Performance Metric for any COO Tranche that has not yet been achieved will be deemed achieved effective as of immediately prior to the closing of the change of control (such resulting RSUs, the COO COC RSUs). The COO COC RSUs
will be unvested on the closing date and will vest on December 31, 2022, subject to Mr. Alvarezs continuous service on the closing date and on such vesting date.
52 AMYRIS, INC. 2022 PROXY STATEMENT
Executive Compensation | Other
Compensation Elements
Notwithstanding
the foregoing, if the employment of Mr. Alvarez is terminated without cause or he resigns for good reason in connection with the change of control of the Company, any then-unvested COO COC RSUs will accelerate, subject to Mr. Alvarezs
satisfaction of certain terms and conditions, including, but not limited to delivery of a release of claims, pursuant to the terms of the Severance Plan (as described below) and his related participation agreement thereunder.
The 2020 EIP provides that any or all outstanding awards issued thereunder, including the COO PSU Award, may be continued, assumed or substituted (including, but not
limited, with payment in cash) by the successor or acquiring corporation (if any) in a change of control of the Company. If the successor or acquiring corporation (if any) of the Company refuses to assume, convert, replace or substitute the COO PSU
in connection with a change of control, 100% of Mr. Alvarezs then-unvested COO COC RSUs will accelerate and become vested effective immediately prior to closing of the change of control.
The treatment of the COO PSU Award upon a change of control of the Company is intended to align Mr. Alvarezs interests with our other stockholders with respect to
evaluating potential change of control offers.
Tax Withholding. Unless determined otherwise by the LDICC in advance of any vesting date, the tax withholding
obligations owed upon settlement of any portion of the COO PSU Award will be paid by a broker-assisted or same-day sale.
Clawback. The COO PSU Award is subject to clawback or recoupment pursuant to any compensation clawback or recoupment policy adopted by our Board or as required
by law during the term of Mr. Alvarezs service or other service that is applicable to him. In addition to any other remedies available under such policy, applicable law may require the cancellation of the COO PSU Award (whether vested or
unvested) and the recoupment of any gains realized with respect to such award.
2021 Recognition Equity Awards. In May 2021, the
LDICC granted Mr. Melo an RSU award to acquire 149,365 shares, with an approximate grant date value of $2 million, vesting immediately, in recognition of his extraordinary efforts in negotiating, structuring and consummating certain transformative
transactions for the Company in the first quarter of 2021, including the sale of exclusive rights to the Companys flavor and fragrance product portfolio to DSM Nutritional Products Ltd.
Other Compensation Elements
Severance Plan
In November 2013, the LDICC
adopted the Amyris, Inc. Executive Severance Plan (or the Severance Plan). The Severance Plan had an initial term of 36 months and thereafter will be automatically extended for successive additional one-year periods unless we provide six
months notice of non-renewal prior to the end of the applicable term. As in prior years, in March 2021, the LDICC reviewed the terms of the Severance Plan and elected to allow it to automatically renew. The LDICC adopted the Severance Plan to
provide a consistent severance framework for our executive officers that aligns with peer practices. The terms of the Severance Plan, including the potential amounts payable under the Severance Plan and related defined terms, are described in detail
below under Potential Payments upon Termination and upon Termination Following a Change in Control. All of our NEOs, and all senior level employees of the Company that are eligible to participate in the Severance Plan (or, collectively,
the participants), have entered into participation agreements to participate in the Severance Plan. Generally, the payments and benefits under the Severance Plan supersede and replace any rights the participants have in connection with
any change of control or severance benefits contained in such participants employment offer letters, equity award agreements or any other agreement that specifically relates to accelerated vesting of equity awards; provided, that (i) our CEO,
CFO and COO are entitled to the rights and benefits provided for in their
AMYRIS, INC. 2022 PROXY STATEMENT 53
Executive Compensation | Other Compensation
Elements
respective 2021 Performance
Equity Awards in connection with a change of control of the Company, as described above and (ii) in the event of any conflict between the terms of the respective 2021 Performance Equity Awards and the Severance Plan relating to accelerated vesting
of equity awards, the terms of each respective 2021 Performance Equity Award will govern and control.
We believe that the Severance Plan appropriately balances our
need to offer a competitive level of severance protection to our executive officers and to induce them to remain at the Company through the potentially disruptive conditions that may exist around the time of a change of control of the Company, while
not unduly rewarding executive officers for a termination of their employment.
The change in control plan does not provide for the gross-up of any excise taxes
imposed by section 4999 of the Internal Revenue Code (the Code). If any of the severance benefits payable under the change in control plan would constitute a parachute payment within the meaning of section 280G of
the Code, subject to the excise tax imposed by section 4999 of the Code, the change in control plan provides for a best after-tax analysis with respect to such payments, under which the executive will receive whichever of the
following two alternative forms of payment would result in the executives receipt, on an after-tax basis, of the greater amount of the transaction payment notwithstanding that all or some portion of the transaction payment may be
subject to the excise tax: (i) payment in full of the entire amount of the transaction payment, or (ii) payment of only a part of the transaction payment so that the executive receives the largest payment possible without the imposition of
the excise tax.
Other Executive Benefits and Perquisites
We provide the following benefits to our executive officers on the same basis as other eligible employees:
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time off and sick days; |
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life insurance and supplemental life insurance; |
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short-term and long-term disability; and |
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a Section 401(k) plan with an employer matching contribution (50% match of up to the first 6% of eligible compensation).
|
We believe that these benefits are generally consistent with those offered by other companies with which we compete for executive talent.
In hiring new executive officers who agree to relocate to Northern California, we have agreed in certain instances to pay relocation and travel expenses, including
housing and rental car expenses. Given the high cost of living in the San Francisco Bay Area relative to most other metropolitan areas in the United States, we believe that for us not to be limited to hiring executive officers located near our
headquarters in Emeryville, California, we must be willing to offer to pay an agreed upon amount of relocation costs, as necessary.
54 AMYRIS, INC. 2022 PROXY STATEMENT
Executive
Compensation | Additional Compensation Information
Additional Compensation Information
Other Compensation Practices and Policies
The following additional compensation practices and policies applied to our executive officers in 2021:
Timing of Equity Awards. The timing of equity awards has been determined by our Board or the LDICC based on our
Boards or the LDICCs view at the time regarding the adequacy of executive equity interests for purposes of retention and motivation.
As in prior years,
in November 2021, our Board and the LDICC, respectively, ratified our existing policy regarding equity award grant dates in an effort to ensure the integrity of the equity award granting process. The original policy was adopted in March 2011. Under
the policy, equity awards are generally granted on the following schedule:
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For equity awards to ongoing executive officers, the grant date is the first business day of the week following the week in
which the award is approved; and |
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For equity awards to newly hired executive officers, the grant date is the first business day of the week following the
later of the week in which the award is approved or the week in which the new hire commences his or her employment. |
Accounting and Tax Considerations
Under ASC 718,
the Company is required to estimate the fair value of each equity award (including stock options and RSUs) and record the compensation expense over the underlying vesting period each award. We record share-based compensation expense on an ongoing
basis according to ASC 718. The LDICC has considered, and may in the future consider, the grant of performance-based or other types of stock awards to executive officers in lieu of or in addition to stock option and time-based RSU grants in
light of the accounting impact of ASC 718 and other considerations.
Generally, Section 162(m) of the Code disallows a federal income tax deduction for public
corporations of remuneration in excess of $1 million paid for any fiscal year to their chief executive officer, chief financial officer and up to three other executive officers whose compensation is required to be disclosed to their stockholders
under the Exchange Act because they are our most highly-compensated executive officers (covered employees). The exemption from Section 162(m)s deduction limit for performance-based compensation has been repealed,
effective for taxable years beginning after December 31, 2017, such that compensation paid to our covered employees in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place
as of November 2, 2017. While the LDICC has not adopted a formal policy regarding tax deductibility of the compensation paid to our executive officers, tax deductibility under Section 162(m) is one factor that is considered in its compensation
deliberations.
The LDICC seeks to balance the cost and benefit of tax deductibility with our executive compensation goals that are designed to promote long-term
stockholder interest. Therefore, the LDICC may, in its discretion, authorize compensation payments that do not consider the deductibility limit imposed by Section 162(m) when it believes that such payments are appropriate to attract and retain
executive talent and are in the best interests of the Company and our stockholders. Accordingly, we expect that a portion of our future cash compensation and equity awards to our executive officers will not be deductible under Section 162(m).
Compensation Recovery Policy. Other than with respect to the CEO PSU Award, CFO PSU Award, and COO PSU Award, as
described above, we do not have a formal policy regarding adjustment or recovery of awards or payments if the relevant performance measures upon which they are based are restated or otherwise adjusted in
AMYRIS, INC. 2022 PROXY STATEMENT 55
Executive
Compensation | Additional Compensation Information
a manner that would reduce the size of the award or payment. Under those circumstances, our Board
or the LDICC would evaluate whether adjustments or recoveries of awards or payments were appropriate based upon the facts and circumstances surrounding the restatement or other adjustment. We anticipate that our Board will adopt a policy regarding
restatements in the future based on anticipated SEC and Nasdaq regulations requiring listed companies to have a policy that requires repayment of incentive compensation that was paid to current or former executive officers in the three fiscal years
preceding any restatement due to material noncompliance with financial reporting requirements.
Stock Ownership Policy. We
have not established stock ownership or similar guidelines with regard to our executive officers. All of our executive officers currently have a direct or indirect, through their stock option holdings, equity interest in the Company and we believe
that they regard the potential returns from these interests as a significant element of their potential compensation for services to us.
Insider Trading
Policy and Hedging/Pledging Prohibition. We have adopted an Insider Trading Policy that, among other things, prohibits our employees, officers and the non-employee members of our Board from
trading in our securities while in possession of material, non-public information. In addition, under our Insider Trading Policy, our employees, officers and the non-employee members of our Board may not (1) engage in transactions involving options
or other derivative securities on the Companys securities, such as puts and calls, whether on an exchange or in any other market (however, they may accept and exercise compensatory equity grants issued by the Company); (2) engage in
hedging or monetization transactions involving the Companys securities; (3) use or pledge Company securities as collateral in a margin account or as collateral for a loan; or (4) engage in short sales of the Companys securities,
including short sales against the box.