July 22, 2020

Reuters: Novavax executives could get big payday even if vaccine fails

by Ross Kerber and Jessica DiNapoli

One of the leading U.S. firms developing a coronavirus vaccine, Novavax Inc (NVAX.O), has awarded executives stock options that could pay out tens of millions of dollars even if its efforts fail.

Novavax CEO Stanley Erck and three other executives would earn the options, worth $101 million at Tuesday’s closing stock price, if the company’s vaccine candidate enters a mid-stage clinical trial – regardless of its eventual success, according to a company filing. The incentive plan, which has not been previously reported, allows the executives to start exercising the options a year after Novavax starts the so-called Phase 2 trial, as it expects to do soon.

Even before the stock options were awarded in April, Erck was well positioned to capitalize on the rally in Novavax shares. Erck, who has been CEO since 2011, holds options and other awards totaling roughly $64 million, with $25 million that can be cashed out now, according to an analysis by pay consultant Farient Advisors.

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