Form DEF 14A GLAUKOS Corp For: Jun 02

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

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Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

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Check the appropriate box:

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Thursday, June 2, 2022
9:00 a.m. Pacific Time

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Your vote is important to us. Whether or not you expect to attend the annual meeting via live audio webcast, please submit a proxy or your voting instructions as soon as possible to instruct how your shares are to be voted at the annual meeting. If you participate in and vote your shares at the annual meeting, your proxy or voting instructions will not be used.

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April 19, 2022

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Forward-Looking Statements.

All statements other than statements of historical facts included in this Proxy Statement that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. Although we believe that we have a reasonable basis for forward-looking statements contained herein, we caution you that they are based on current expectations about future events affecting us and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that may cause our actual results to differ materially from those expressed or implied by forward-looking statements in this Proxy Statement. These potential risks and uncertainties include, without limitation, uncertainties regarding the duration and severity of the COVID-19 pandemic and its impact on our business or the economy generally; the reduced physician fee and ASC facility fee reimbursement rate finalized by the U.S. Centers for Medicare & Medicaid Services for 2022 for procedures utilizing our iStent family of products and its impact on our U.S. combo-cataract glaucoma revenue; our ability to continue to generate sales of our commercialized products and develop and commercialize additional products; our dependence on a limited number of third-party suppliers, some of which are single-source, for components of our products; the occurrence of a crippling accident, natural disaster, or other disruption at our primary facility, which may materially affect our manufacturing capacity and operations; securing or maintaining adequate coverage or reimbursement by third-party payors for procedures using the iStent, the iStent inject, the iStent inject W, our corneal cross-linking products or other products in development; our ability to properly train, and gain acceptance and trust from ophthalmic surgeons in the use of our products; our ability to compete effectively in the medical device industry and against current and future competitors (including Micro-Invasive Glaucoma Surgery competitors); our compliance with federal, state and foreign laws and regulations for the approval and sale and marketing of our products and of our manufacturing processes; the lengthy and expensive clinical trial process and the uncertainty of timing and outcomes from any particular clinical trial or regulatory approval processes; the risk of recalls or serious safety issues with our products and the uncertainty of patient outcomes; our ability to protect, and the expense and time-consuming nature of protecting our intellectual property against third parties and competitors and the impact of any claims against us for infringement or misappropriation of third party intellectual property rights and any related litigation; and our ability to service our indebtedness. These and other known risks, uncertainties and factors related to Glaukos and our business are described in detail under the caption “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission on February 28, 2022.Our filings with the Securities and Exchange Commission are available in the Investor Section of our website at www.glaukos.com or at www.sec.gov. In addition, information about the risks and benefits of our products is available on our website at www.glaukos.com. We do not undertake any obligation to update, amend or clarify these forward-looking statements whether as a result of new information, future events or otherwise, except as may be required under applicable securities law.

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229 Avenida Fabricante
San Clemente, California 92672

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PROXY STATEMENT

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Annual Meeting of Stockholders

To Be Held June 2, 2022

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Our Board of Directors is soliciting your proxy for the 2022 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Thursday, June 2, 2022, at 9:00 a.m. Pacific Time, and at any and all postponements or adjournments of the Annual Meeting, for the purposes set forth in the Notice of Annual Meeting of Stockholders accompanying this Proxy Statement. This Proxy Statement and our 2021 Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”) are first being made available to stockholders on or about April 19, 2022.

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We will be hosting the Annual Meeting via live audio webcast on the Internet. Any stockholder can listen to and participate in the Annual Meeting live via the Internet at www.virtualshareholdermeeting.com/GKOS2022. Stockholders may vote and ask questions while connected to the Annual Meeting on the Internet.

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You will not be able to attend the Annual Meeting in person.

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Unless the context otherwise requires, references in this Proxy Statement to “Company,” “we,” “our,” “us,” and similar terms refer to Glaukos Corporation, a Delaware corporation. In addition, all references to our website in this Proxy Statement are provided for convenience only and the content on our website does not constitute a part of this Proxy Statement.

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MEETING INFORMATION

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Annual Meeting of Stockholders

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How to Vote

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Stockholders as of the close of business on the record date are entitled to vote. If you are a beneficial owner who owns shares of our common stock registered in the name of a broker, bank or other nominee, please follow the instructions they provide on how to vote your shares. Stockholders of record may vote as follows:

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Before the Meeting:

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During the Meeting:

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Voting Matters

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VIRTUAL ANNUAL MEETING

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We will be hosting the Annual Meeting live via the Internet. You will not be able to attend the Annual Meeting in person. Any stockholder can listen to and participate in the Annual Meeting live via the Internet at www.virtualshareholdermeeting.com/GKOS2022. Our Board annually considers the appropriate format of our annual meeting. The virtual meeting will allow our stockholders to attend and participate from any location around the world. This format will enhance stockholder access and encourage participation and communication with our Board of Directors and management.

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The Annual Meeting webcast will begin promptly at 9:00 a.m., Pacific Time. We encourage you to access the Meeting webcast prior to the start time. Online check-in will begin, and stockholders may begin submitting written questions, at 8:45 a.m., Pacific Time, and you should allow ample time for the check-in procedures.

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Benefits of a Virtual Annual Meeting

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We are embracing technology to provide expanded access, improved communication, reduced environmental impact and cost savings for our stockholders and the Company. Hosting a virtual meeting enables increased stockholder attendance and participation since stockholders can participate and ask questions from any location around the world, and provides us an opportunity to give thoughtful responses. In addition, we intend that the virtual meeting format provide stockholders a similar level of transparency to the traditional in-person meeting format and we take steps to ensure such an experience. Our stockholders will be afforded the same opportunities to participate at the virtual Annual Meeting as they would at an in-person annual meeting of stockholders.

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Attendance at the Virtual Annual Meeting

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You will need the control number included on your Notice of Internet Availability or your proxy card or voting instruction form (if you received a printed copy of the proxy materials) or included in the email to you if you received the proxy materials by email in order to be able to vote your shares or submit questions during the Annual Meeting. Instructions on how to connect to the Annual Meeting and participate via the Internet are posted at www.virtualshareholdermeeting.com/GKOS2022. If you do not have your control number, you will be able to access and listen to the Annual Meeting but you will not be able to vote your shares or submit questions during the Annual Meeting.

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We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting or submitting questions. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting web portal.

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Questions at the Virtual Meeting

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Our virtual Annual Meeting allows stockholders to submit questions and comments during the 15 minutes before the meeting and during the meeting. After the meeting, we will spend up to 15 minutes answering stockholder questions that comply with the meeting rules of conduct; the rules of conduct will be posted on the virtual meeting web portal. To the extent time doesn’t allow us to answer all of the appropriately submitted questions, we will answer them in writing on our investor relations website, at www.investors.glaukos.com, soon after the meeting. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.

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PROPOSAL 1 — ELECTION OF DIRECTORS

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Our Board of Directors (“Board” or “Board of Directors”) is currently comprised of eight directors. Under our Certificate of Incorporation, our Board of Directors is divided into three classes, each serving a staggered three-year term and with one class being elected at each year’s annual meeting of stockholders as follows:

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Upon the recommendation of the Compensation, Nominating and Corporate Governance Committee (the “CNG Committee”), the Board of Directors has nominated each of Mark J. Foley, David F. Hoffmeister and Gilbert H. Kliman, M.D. for election to our Board of Directors as Class I directors to serve until the 2025 annual meeting of stockholders and until their respective successors are duly elected and qualified. Proxies may only be voted for the three Class I directors nominated for election at the Annual Meeting.

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Each of the director nominees has consented to being named in this Proxy Statement and to serving as a director, if elected. We have no reason to believe that any of the nominees will be unable or unwilling for good cause to serve if elected. However, if any nominee should become unable for any reason or unwilling for good cause to serve, the proxy holders will vote the proxies received by them for another person nominated as a substitute by the Board of Directors, or the Board of Directors may reduce the number of directors on the Board.

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Biographical Descriptions

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Set forth below is biographical information about each of our director nominees and continuing directors. The information below is provided as of April 6, 2022. The primary experience, qualifications, attributes and skills of each of our director nominees that led to the conclusion of the CNG Committee and the Board of Directors that such nominee should serve as a member of the Board of Directors are also described below.

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Nominees for Election as Class I Directors at the Annual Meeting

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All Other Continuing Directors

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Each of our directors’ specific skills and experiences are included in the table below and described more fully in their individual biographies. Even though a particular skill may not be indicated below, our directors often have some level of experience in each of the areas listed.

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CORPORATE GOVERNANCE

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Corporate Governance Guidelines

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Our Board of Directors, on the recommendation of the CNG Committee, has adopted Corporate Governance Guidelines to assist the Board in the discharge of its duties and to set forth the Board of Directors’ current views with respect to selected corporate governance matters considered significant to our stockholders. Our Corporate Governance Guidelines direct our Board’s actions with respect to, among other things, our Board composition and director qualifications, responsibilities of directors, including our Lead Independent Director, director compensation, director capacity, director orientation and continuing education, succession planning and the Board’s annual performance evaluation. A current copy of our Corporate Governance Guidelines is available under “Corporate Governance” on our website at http://investors.glaukos.com.

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Stockholder Engagement and Responsiveness

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Since our IPO in 2015, we conduct regular outreach to our stockholders to build relationships, explain our corporate governance structure and executive compensation policies, and receive valuable feedback on matters that are important to them.

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At our 2021 Annual Meeting of Stockholders (“2021 Annual Meeting”), our stockholders approved, by a non-binding, advisory vote, the compensation of our named executive officers. This ballot item, known as a “say-on-pay” proposal, passed with 93% of the votes cast. Following the 2021 Annual Meeting, we engaged with our stockholders regarding our executive compensation policies, corporate governance principles and sustainability efforts. We contacted holders of approximately 65% of our outstanding stock, and members of our management team spoke with, or received confirmation that no substantive engagement was required from, stockholders collectively owning approximately 60% of our outstanding stock (excluding officers and directors of the Company). These holders included 8 of our top 10 stockholders. Mr. Foley, chair of the CNG Committee and our Lead Independent Director, joined some of these calls with our top stockholders. Our Board of Directors, including all members of the CNG Committee, was provided a full report of stockholder feedback from this 2021 stockholder engagement.

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Consistent with the feedback received in prior years, the stockholders with whom we spoke generally expressed broad support for our governance practices and understood the importance of having certain governance protections, such as a classified Board, for a company that has significant potential future stockholder value tied to its deep product pipeline as compared to commercialized products. Our stockholders also conveyed broad general support for our executive compensation program, stating their hope that the Company will continue its use of multi-year performance equity grants and continue to connect executive compensation to the progress of our R&D pipeline. One stockholder also noted its desire that we continue to disclose updates on the development of our pipeline products.

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Notably, most stockholders expressed support for the continuing advancement of the Company’s environmental, social and governance (“ESG”) efforts. Several stockholders shared their appreciation that in 2021 our Sustainability Council, consisting of representatives from various functional areas within the Company, set goals and targets that are material to the Company and its stakeholders, comprised of employees, customers, suppliers and investors. Several stockholders shared their preference that the Company incorporate ESG incentives into its compensation program, linking executive pay to achievement of our ESG incentives.

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Nearly all of the stockholders with whom we engaged requested additional understanding regarding the Company’s promotion of diversity and inclusion within its workforce. They conveyed their desire to see

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enhanced disclosure regarding the composition of the Company’s workforce, including disclosure of our EEO-1 demographic data, and steps taken to ensure our workforce reflects our community and customer base.

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Several stockholders also asked us about the Company’s cybersecurity efforts. They expressed a desire to better understand the Board’s role in overseeing those efforts, and have the Company set more robust goals around its data security systems and processes.

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Several of our stockholders also noted that the Company has not set limits regarding director membership on public company boards, noting that they believe such limits are necessary to ensure directors are capable of devoting sufficient time to overseeing the management of the Company. One stockholder also requested additional information regarding the Company’s Board self-evaluation process, and another requested greater transparency around the Company’s pipeline product development, including anticipated timelines to approval and commercialization.

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In response to stockholder feedback in 2021, the CNG Committee and Board responded by taking the following actions:

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STOCKHOLDER RESPONSIVENESS

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The Company and the CNG Committee listen to the input we receive from our stockholders, with the intention of responding to that input in an appropriate and thoughtful manner that considers the Company’s stage in its development cycle and its needs from a leadership and operational perspective. We believe we have responded fully and appropriately to the feedback received from stockholders through these outreach campaigns. We intend to continue the dialogue with our stockholders on these and other matters to ensure the Board of Directors is apprised of their views and governance and compensation best practices more broadly. In addition, our Board of Directors will regularly review the Company’s current corporate governance structure to ensure it continues to align the interest of the Company with its stockholders, and consider appropriate governance changes as the Company matures.

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Director Independence

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Under the rules of the New York Stock Exchange (the “NYSE”) and our Corporate Governance Guidelines, independent directors must comprise a majority of our Board of Directors. Under the NYSE rules, a director will only qualify as an “independent director” if our Board of Directors affirmatively determines that the director has no material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us).

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Our Board of Directors reviewed its composition and the independence of our directors and considered whether any director has a material relationship with us that could interfere with his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board of Directors has determined that each of Messrs. Foley, Hoffmeister and Stapley, Drs. Kliman and Wen, and Mses. Weisner and Torres is “independent” as that term is defined under the rules of the NYSE. Mr. Burns is not an independent director as a result of his position as our Chief Executive Officer. In addition, our Board of Directors previously determined that William J. Link, Ph.D. was “independent” as that term is defined under the rules of the NYSE during his service on the Board through December 2021.

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In making these determinations, our Board of Directors considered the relationships that each non-employee director has with us and all other facts and circumstances our Board of Directors deemed relevant in determining independence.

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Board Leadership Structure

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We have no policy requiring either that the positions of the Chairperson of the Board and our Chief Executive Officer be separate or that they be occupied by the same individual. Our Board of Directors believes that it is important to retain flexibility to allocate the responsibilities of the offices of the Chairperson of the Board and Chief Executive Officer in a way that is in our best interests and the best interests of our stockholders at the time it elects a new Chief Executive Officer or Chairperson of the Board, or at other times when consideration is warranted by circumstances. Our CEO, Thomas W. Burns, was appointed Chairman of the Board upon the resignation of our prior Chairman, Dr. William J. Link, in December 2021.

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Pursuant to our Corporate Governance Principles, in the event the Chairperson of the Board is not an independent director, the independent directors will annually appoint from amongst themselves a Lead Independent Director with such responsibilities as the Board shall determine from time to time. If appointed, the Lead Independent Director has the following responsibilities:

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Because our Chairman is not an independent director, the independent members of the Board appointed Mr. Mark J. Foley as Lead Independent Director in December 2021. We believe the combined Chairman and CEO leadership role along with a Lead Independent Director enhances our Board’s ability to provide insight and direction on important strategic initiatives and, at the same time, promotes effective and independent oversight of management and our business.

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The Board’s Role in Risk Oversight

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Our Board of Directors, as a whole and through its committees, serves an active role in overseeing the management of risks related to our business. Our officers are responsible for day-to-day risk management activities. The full Board monitors risks through regular reports from each of the committee chairs, and is apprised of particular risk management issues in connection with its general oversight and approval of corporate matters. The Board and its committees oversee risks associated with their respective areas of responsibility, as summarized below. Each committee meets with key management personnel and representatives of outside advisers regularly and as required. The Board, through its Audit Committee, also

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oversees the Company’s enterprise risk management program, which is administered by the Company’s legal and internal audit functions and facilitates the process of reviewing key external, strategic, operational and financial risks, including cybersecurity risks, as well as monitoring the effectiveness of the Company’s risk mitigation efforts.

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Our Board of Directors manages specific areas of risk exposure through its committees of the Board of Directors as follows:

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Executive Compensation Risk

The CNG Committee identifies and considers risks related to our executive compensation, including during its review and approval of our executive compensation program. Our compensation programs are designed to reward our named executive officers and other employees for the achievement of the Company’s corporate strategies, business objectives and the creation of long-term value for stockholders, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking. The CNG Committee has concluded that the current executive compensation program does not encourage inappropriate or excessive risk-taking. In making its determination, the CNG Committee noted that each executive officer’s direct compensation under our executive compensation program consists primarily of a fixed base salary, an annual incentive bonus opportunity and long-term equity incentive awards. Annual incentive bonuses are balanced with long-term equity incentives, which are subject to multi-year vesting schedules or only vest upon the achievement of strategic performance objectives.

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Our Board believes that the processes it has established for overseeing risk would be effective under a variety of leadership frameworks and therefore the Board’s leadership structure, as described under “Board Leadership Structure” above, was not affected by risk oversight considerations.

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Committees of the Board of Directors

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The Board has two standing committees: the Audit Committee and the Compensation, Nominating and Corporate Governance Committee. The written charters of these committees are available under “Corporate Governance” on our website at http://investors.glaukos.com. Additionally, in 2020, the Board formed the Equity Awards Committee, comprised of Mr. Burns, our Chairman and Chief Executive Officer, to approve equity grants to employees other than our senior leadership team, so long as such grants are within the guidelines established by our CNG Committee on an annual basis, and meet certain other limitations described in the Equity Awards Committee charter.

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Independent Director Financial Expert Committee Member

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Audit Committee

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Our Board of Directors determined that Messrs. Stapley and Hoffmeister, Ms. Weisner and Dr. Wen, who comprise our Audit Committee, satisfy the independence standards for such committee established by applicable SEC rules and the listing standards of the NYSE. Additionally, our Board of Directors has determined that each of Messrs. Stapley and Hoffmeister is an “audit committee financial expert” as defined by applicable SEC rules.

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The Company has a full-time internal audit function that reports to the Audit Committee and the Chief Financial Officer, and is responsible for, among other things, reviewing and evaluating the adequacy, effectiveness and quality of the Company’s system of internal controls. The Audit Committee engages, terminates, determines compensation for, and oversees the independent registered public accounting firm, reviews the scope of the audit by the independent registered public accounting firm and inquiries into the effectiveness of the Company’s accounting and internal control functions. The Audit Committee also approves or ratifies any related person transactions, as described under “Transactions with Related Persons” below.

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In addition to overseeing our internal controls over financial reporting and the work of our independent registered public accounting firm, the Audit Committee, which is comprised solely of independent directors, also monitors our enterprise risk assessment and management efforts. The Audit Committee receives quarterly reports from management regarding operational risks facing our Company, including risks related to manufacturing, facilities, accounting and our compliance with laws and regulations.

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Additionally, as formalized in its charter in 2021, the Audit Committee also oversees the management of information and cybersecurity risk. Cybersecurity risk is a material component of our enterprise risk management program. We recognize the importance of maintaining the security of our information assets and the privacy of our employees, partners, customers and patients, and devote significant attention to information and cybersecurity controls and protections. While the Audit Committee reviews and oversees the Company’s information security efforts, senior leadership is responsible for the day-to-day management of cybersecurity risk and the design and implementation of policies, processes and procedures to identify and mitigate this risk. Glaukos’ security program is structured around the industry standards for security, including the National Institute of Standards and Technology (NIST) and the International Organization for Standardization, and we are working toward formal alignment with NIST standards by 2025. Our head of IT reports directly to the Chief Financial Officer, and reports to the Audit Committee on a semi-annual basis regarding the effectiveness of our information and cybersecurity program, its inherent risks, the plans and programs designed to address these risks and our progress in doing so.

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Our cybersecurity response plan is comprised of Written Incident Response and Security policies as well as our Disaster Recovery Plan, which collectively outline our approach for the urgent management, communication, and successful resolution of any known or suspected unauthorized access to our information systems. Company personnel also undergo information security awareness testing and annual training. Employees who fail our phishing tests are required to complete additional training. External parties, including cybersecurity firms, have assessed our information and cybersecurity program. We use these findings, along with employee testing results, to analyze the effectiveness of our program and to identify opportunities to address and remedy any residual information and cybersecurity risks. In addition, we maintain cyber insurance to provide coverage in the event of a data breach incident.

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Compensation, Nominating and Governance Committee

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Our Board of Directors determined that Mr. Foley, Dr. Kliman and Ms. Torres, who comprise our CNG Committee, satisfy the independence standards for such committee established by applicable SEC rules and the listing standards of the NYSE. In making its independence determination for each member of the CNG Committee, our Board of Directors considered whether the director has a relationship with the Company that is material to the director’s ability to be independent from management in connection with the duties of a compensation committee member.

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The CNG Committee may form subcommittees and delegate to its subcommittees such power and authority as it deems appropriate from time to time under the circumstances. In 2020, the Board formed the Equity Awards Committee, comprised of Mr. Burns, our Chief Executive Officer, to approve equity grants to employees other than our senior leadership team so long as such grants are within the guidelines established by our CNG Committee on an annual basis and meet certain other limitations described in the Equity Awards Committee charter. The CNG Committee has no current intention to further delegate any of its responsibilities to a subcommittee. The CNG Committee may confer with the Board in determining the compensation for the Chief Executive Officer. In determining compensation for executive officers other than the Chief Executive Officer, the CNG Committee considers, among other things, the recommendations of the Chief Executive Officer.

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Pursuant to its charter, the CNG Committee is authorized to retain or obtain the advice of compensation consultants, legal counsel or other advisors to assist in the evaluation of director and executive officer compensation or in carrying out its other responsibilities. During fiscal 2021, the CNG Committee retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its compensation consultant to evaluate the existing executive and non-employee director compensation programs and perform the services that are described in the Compensation Discussion and Analysis section below. FW Cook did not provide any other services to the Company during fiscal 2021. In connection with the compensation consultant services provided by FW Cook, the CNG Committee has assessed the independence of FW Cook and does not believe its work has raised any conflict of interest.

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The CNG Committee oversees the Company’s ESG efforts. As described below under the heading “ESG and Sustainability,” this ESG oversight by the CNG Committee was formalized by a December 2020 amendment to the CNG Committee’s charter as part of the Company’s enhancement of its overall sustainability program. The CNG Committee also retains direct oversight of the Company’s human capital management process, including workforce diversity and inclusion; health, safety and wellness; philanthropy and volunteerism; training and development; and compensation and benefits. The CNG Committee also oversees the Board’s director evaluation process.

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Meetings and Attendance

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During fiscal 2021, our Board of Directors held four meetings, the Audit Committee held eight meetings and the CNG Committee held four meetings. Each of our directors attended at least 75% of the aggregate meetings of the Board and the committees of the Board on which he or she served during the period he or she served in fiscal 2021. In addition, independent directors of our Board of Directors meet in regularly scheduled sessions without management.

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It is the Board of Directors’ policy to invite and encourage directors to participate in our annual meeting of stockholders. At our virtual annual meeting of stockholders held during fiscal 2021, all of our directors participated other than Dr. William J. Link, who was unable to attend.

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Succession Planning

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The Board of Directors recognizes that advance planning for contingencies such as the departure, death or disability of the chief executive officer or other top executives is critical so that, in the event of an untimely vacancy, the Company has in place a succession plan to facilitate the transition to both interim and longer-term leadership. The designation of the chief executive officer, as in the case of other officers, is a decision for the Board of Directors. The Board, in a process overseen by the CNG Committee, reviews succession planning for the chief executive officer and other senior leaders on an annual basis.

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Board Evaluation Process

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The CNG Committee is responsible for overseeing the annual performance evaluation of our Board, which is a multi-step process designed to evaluate the performance of our Board, each of its committees and each individual director, as follows:

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Consideration of Director Candidates

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Our Board of Directors and the CNG Committee will consider director candidates recommended for election to the Board of Directors by stockholders in the same manner and using the same criteria as that used for any other director candidate. The CNG Committee has not established any specific minimum qualifications that must be met by a director candidate. In evaluating a director candidate, the CNG Committee will consider whether the composition of the Board reflects the appropriate balance of independence, sound judgment, business specialization, understanding of our business environment, willingness to devote adequate time to Board duties, technical skills, diversity and other background, experience and qualities as determined by the CNG Committee. While our Board of Directors has no formal policy for the consideration of diversity in identifying director nominees, the CNG Committee seeks to have a board of directors that will collectively represent a diversity of backgrounds and experience and will endeavor to include women and individuals from minority groups in the qualified candidate pool from which any new director candidates will be drawn. We currently have three female directors, one director who self-identifies as Asian and one director who self-identifies as Hispanic.

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Stockholders who wish to recommend a director candidate for consideration by the CNG Committee and the Board should submit their recommendation in writing to the Board no later than January 1 prior to the next annual meeting of stockholders together with the following information: (1) the name and address of the stockholder as they appear on the Company’s books or other proof of share ownership; (2) the class and number of shares of common stock of the Company beneficially owned by the stockholder as of the date the stockholder submits the recommendation; (3) a description of all arrangements or understandings between the stockholder and the director candidate and any other person(s) pursuant to which the recommendation is being made; (4) the name, age, business address and residence address of the director candidate and a description of the director candidate’s business experience for at least the previous five years; (5) the principal occupation or employment of the director candidate; (6) the class and number of shares of common stock of the Company beneficially owned by the director candidate; (7) the consent of the director candidate to serve as a member of our Board of Directors if elected; and (8) any other information that would be required to be disclosed with respect to such director candidate in solicitations for proxies for the election of

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directors pursuant to applicable rules of the Securities and Exchange Commission (“SEC”). The CNG Committee may request additional information concerning such director candidate as it deems reasonably required to determine the eligibility and qualification of the director candidate to serve as a member of the Board of Directors.

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Stockholders who wish to nominate a person for election as a director in connection with an annual meeting of stockholders (as opposed to making a recommendation to the CNG Committee as described above) must deliver written notice to our Secretary in the manner described in our Amended and Restated Bylaws (“Bylaws”), and as described further under “Proposals of Stockholders and Director Nominations for 2023 Annual Meeting” below.

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Board Attributes

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Communications with the Board of Directors

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The Board of Directors has established a process to receive communications from stockholders and other interested parties. Stockholders and other interested parties may communicate directly with members of the Board of Directors, the independent directors or the Chairman of the Board of Directors by submitting a communication in an envelope marked “Confidential” addressed to the “Board of Directors,” “Independent Members of the Board of Directors,” or “Chairperson,” as applicable, at: Glaukos Corporation, 229 Avenida Fabricante, San Clemente, California 92672. In addition, if requested by stockholders, when appropriate, the Chairperson of the Board or Lead Independent Director will also be available for consultation and direct communication with stockholders.

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Policy on Pledging and Hedging of Company Shares

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As part of our Insider Trading Policy adopted by our Board of Directors and applicable to our directors, officers and employees, their immediate family members sharing the same household and any entities such as trusts, partnerships, or corporations over which they have or share voting or investment control (collectively, “Insiders”), Insiders are not permitted to engage in any short sale of Glaukos securities, pledge shares as collateral for a loan or margin Glaukos securities in a margin account or purchase financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds), or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Glaukos securities.

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Code of Conduct and Ethics

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We have adopted a written code of business conduct and ethics that applies to our directors, executive officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. A current copy of the code is posted under “Corporate Governance” on our website at http://investors.glaukos.com. To the extent required by rules adopted by the SEC and NYSE, we intend to promptly disclose future amendments to certain provisions of the code, or waivers of such provisions granted to executive officers and directors, on our website at www.glaukos.com.

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ESG and Sustainability

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As we have grown to more than 700 full-time employees worldwide with five FDA-approved products and 16 disclosed pipeline products, so too has our commitment to creating a positive impact as a responsible corporate citizen. Over the course of 2021, we continued to invest significant time and resources into better understanding what drives sustainability at Glaukos, setting meaningful goals to challenge us to continue to improve our processes and achievements with respect to ESG matters. Continuing to grow and enhance our ESG policies and programs is a key priority for us now and in the future, which we believe will benefit all our stakeholders: our employees, customers, patients, investors and communities.

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In 2021, our cross-functional Sustainability Council, which is lead by executive management and overseen by the CNG Committee of the Board, focused on peer benchmarking, engaging with stakeholders and increasing our disclosure of our ESG efforts and accomplishments. In April 2022, we published our third annual sustainability report covering the 2021 calendar year (“2021 Sustainability Report”). The 2021 Sustainability Report is posted under “Corporate Governance” on our website at http://investors.glaukos.com, and references the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) frameworks. We hope that our 2021 Sustainability Report reflects our dedication to continuous improvement and transparency. Below are highlights of our accomplishments and progress in 2021:

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EXECUTIVE OFFICERS OF THE COMPANY

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The table below sets forth certain information regarding our executive officers as of April 6, 2022:

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See “Proposal One — Election of Directors” for information concerning the business experience of Mr. Burns. Information concerning the business experience of our other executive officers is set forth below.

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There are no family relationships between or among any of our executive officers or directors.

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PROPOSAL 2 — ADVISORY APPROVAL OF NAMED
EXECUTIVE OFFICER COMPENSATION

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In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which was amended pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are asking our stockholders to approve, on a non-binding, advisory basis, the compensation of our Named Executive Officers (as defined below under the heading “Compensation Discussion and Analysis”) as disclosed in this Proxy Statement.

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As described in detail under the heading “Compensation Discussion and Analysis,” our executive compensation program is designed to:

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We urge stockholders to read the “Executive Compensation” section beginning on page 28 of this Proxy Statement which describes in more detail the key elements of our executive compensation program. The CNG Committee and the Board of Directors believe that our executive compensation program is appropriately designed to achieve the Company’s business objectives and create long-term value for our stockholders. Accordingly, we ask our stockholders to approve the following resolution at the Annual Meeting:

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“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation paid to the Company’s Named Executive Officers as set forth under “Executive Compensation,” including the Compensation Discussion and Analysis, Summary Compensation Table and the related compensation tables and narrative disclosure in this Proxy Statement for the 2022 Annual Meeting of Stockholders.”

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The vote is advisory, which means that the vote is not binding on the Company, our Board of Directors or the CNG Committee. However, the CNG Committee, which is responsible for designing and administering our executive compensation program, values the opinions expressed by our stockholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for Named Executive Officers.

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We intend to provide our stockholders with an opportunity to approve the compensation of the Company’s Named Executive Officers each year at the annual meeting of stockholders.

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Compensation Discussion and Analysis

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This Compensation Discussion and Analysis describes the objectives of our executive compensation program and provides disclosure about the elements of compensation earned by and awarded to each of the executive officers identified in the “Summary Compensation Table,” whom we refer to in this section as our “Named Executive Officers” or “NEOs.” It also describes the philosophy of, and process followed by, our Compensation Committee in making compensation decisions and setting compensation policy for our Named Executive Officers.

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2021 Named Executive Officers

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Our Named Executive Officers for fiscal year 2021 were:

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The NEOs were our only executive officers during 2021. Effective April 1, 2022, Mr. Burns became the Company’s Chairman and Chief Executive Officer (he was appointed Chairman of the Board in December 2021), Mr. Gilliam became the Company’s President and Chief Operating Officer, Alex R. Thurman became the Company’s Senior Vice President & Chief Financial Officer, Tomas Navratil became the Company’s Chief Development Officer, and Mr. Calcaterra became the Company’s Executive Vice President, Global Commercial Operations, and ceased to serve as an executive officer of the Company. As these leadership changes occurred after the end of the 2021 fiscal year, this Compensation Discussion and Analysis only focuses on the compensation paid or awarded to Messrs. Burns, Calcaterra and Gilliam in their roles during the 2021 year.

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COVID-19 Continuing Impact

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For Glaukos, the COVID-19 pandemic, including the Delta and Omicron variants that swept across the globe, continued to impact how we operated during 2021. Many of the response plans we implemented in 2020 were focused on protecting the health and safety of our employees and their families. The majority of these plans remained in place throughout 2021. Some of our suppliers faced materials and labor shortages that resulted in delays in our supply chain. This management team guided the Company and its employees through these challenges with minimal disruption to our customers and other stakeholders. Additionally, due to management’s decisive actions in 2020 to preserve cash and jobs for our employees and secure additional funds through a convertible bond offering, in 2021 we were able to continue to progress with our core research and development and clinical and pre-clinical projects to bring pipeline products to market, the greatest contributors to long-term value creation for our stockholders. The specific activities that we continued in 2021 included, among other things:

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2021 Say-on-Pay Stockholder Support and Engagement

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Over 93% of our stockholders voted in favor of our executive compensation program at our 2021 Annual Meeting. As part of our annual stockholder engagement process, we spoke with the holders of approximately 60% of our outstanding shares in Fall 2021. The feedback we received, and the actions we have taken in response to the feedback, is described in the section above entitled “Stockholder Engagement and Responsiveness.” Our CNG Committee considers the input provided by our stockholders in shaping our executive compensation program and making compensation decisions.

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2021 Accomplishments

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Overall, we are proud of our performance in 2021 and would like to recognize the continued dedication and resiliency of our teams around the globe who remain steadfastly committed to their work in the face of continued COVID disruptions and other unforeseen external circumstances. Our ability to execute our plans illustrates not only our effective ongoing response to the current market environment, but also reflects the progress we continue to make towards our broader strategic vision.

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Consider our key 2021 accomplishments:

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We believe the strong financial profile and capital position we’ve built has allowed us to remain on offense when it comes to successfully investing for our future, leaving us well-positioned for the next phase of our pioneering journey as we target several clinical, regulatory, and commercial milestones in 2022 and the many years ahead.

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Executive Compensation Highlights

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Executive Compensation Program and Objectives

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Our executive compensation program for 2021 was intended to:

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Our 2021 executive compensation program was comprised of three key elements, each of which was designed to further the program objectives listed above: (1) base salary; (2) annual bonus that is earned upon achievement of specified corporate and/or individual goals; and (3) long-term incentive compensation in the form of equity awards that are subject to both performance-based and time-based vesting requirements. We also provide 401(k) retirement benefits, an executive deferred compensation plan, executive physical, and severance benefits to our senior leadership team, including our NEOs.

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The largest component of our compensation program is long-term incentive awards (based upon the grant date value). When combined with the target annual incentive award, the vast majority of executive compensation is “at risk,” or, in other words, dependent on the accomplishment of the Company’s business and financial objectives or the performance of the Company’s stock (or both, in the case of annual bonus awards granted in equity and the PRSUs). In the case of Mr. Burns, 89% of his 2021 target compensation is “at risk.” For our other Named Executive Officers, 83% of their average target compensation is “at risk.”

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Role of the Compensation, Nominating and Governance Committee

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Pursuant to its charter, the CNG Committee has the authority to determine the amount of compensation given to each of the Named Executive Officers, as well as the overall executive compensation program. The CNG Committee annually evaluates the performance of each of the Named Executive Officers and determines compensation levels based on its performance evaluation. The CNG Committee also, among other things, reviews and approves our executive compensation elements, plans and policies, and is responsible for administering our equity incentive plans, including approving award grants under the plans. Executive compensation and senior management equity award grants are also approved by our Board of Directors as a whole. In performing its duties, the CNG Committee is authorized to consider the recommendations of our Chief Executive Officer when determining the compensation of the other members of management, including the Named Executive Officers. The CNG Committee is also authorized to approve any severance benefits, deferred compensation and change-in-control benefits or any perquisites offered to our Named Executive Officers.

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All CNG Committee members are deemed independent under applicable NYSE rules. None of our Named Executive Officers is a member of our CNG Committee or otherwise had any role in determining the compensation of our other Named Executive Officers, other than the Chief Executive Officer’s recommendations to the CNG Committee as to the compensation of the other Named Executive Officers.

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Role of the Compensation Consultant

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Pursuant to its charter, the CNG Committee is authorized to retain or obtain the advice of compensation consultants, outside counsel, experts or other advisors to advise the CNG Committee with respect to amounts or forms of executive compensation or in carrying out its other responsibilities. For 2021, the CNG Committee retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its independent compensation consultant. The CNG Committee was directly responsible for the appointment and oversight of the compensation consultant. During 2021, FW Cook provided no services to Glaukos or its management other than its compensation consulting services provided in its capacity as the CNG Committee’s independent advisor on executive and non-employee director compensation.

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In connection with the compensation consultant services provided by FW Cook in 2021, the CNG Committee assessed the independence of FW Cook pursuant to the SEC and NYSE rules and concluded that no conflict of interest exists.

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Peer Companies

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Below is a listing of the peer group companies used by the CNG Committee for 2021 comparative compensation purposes. The CNG Committee’s objective in selecting this peer group was to include a group of comparably-sized public companies in the life sciences sector, with an emphasis on pharmaceutical and biotechnology companies with commercialized products. We generally targeted peer companies in this field that had reported annual revenues of less than $1 billion (approximately 4x our 2020 revenue), and held a

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market capitalization between $700 million and $7.5 billion (approximately 0.4x to 4.0x our market capitalization at the time of analysis). The CNG Committee believes that use of these criteria identifies the Company’s peers both for executive talent as well as for capital investment, based on the growth profile of the Company.

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The peer group included the following 20 companies, which reflect the same group of companies used for setting 2020 compensation:

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The peer group used for 2021 executive compensation decisions was set in early May 2020, when the Company’s market cap was near the peer group median. Market cap was the primary metric for peer size since it directly affects stock price and equity award values. Glaukos’ market cap increased to near the 75^th percentile of the peer group when 2021 pay decisions were made in March 2021. The CNG Committee reviews the peer group data as a reference point in assessing compensation decisions for the Named Executive Officers using its business judgment. Other factors considered when determining compensation levels include our objective of attracting and retaining highly qualified executives, and our goal of rewarding top performers to motivate and encourage high achievement. Finally, the CNG Committee notes that due to the rather narrow slice of the ophthalmology field within which the Company operates, the targeted talent pool from which to attract skilled leadership is narrow. As such, it will continue to revisit and revise its peer group in future years to ensure the Company remains competitive in its continuing recruitment and retention efforts.

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Material Elements of Compensation

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We provide an annual base salary to each of our Named Executive Officers to compensate them for performing their day-to-day services during the year. Salaries are reviewed annually by the CNG Committee and may be adjusted for the following year based on a variety of quantitative and qualitative factors, including each executive’s job responsibilities, experience, performance, and competitive market levels, as well as the recommendations of our Chief Executive Officer (except with respect to his own salary). No Named Executive Officer is entitled to any automatic base salary increases.

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The chart below shows the change in each Named Executive Officer’s base salary from fiscal 2020 to fiscal 2021. In setting 2021 base salary, the CNG Committee considered the extraordinary performance of the Company’s executive officers in managing the Company through the 2020 COVID-19 pandemic. They took note of the Company’s quick action to protect the health and safety of its employees, redesigning manufacturing and assembly work processes to minimize employee contact while maintaining sufficient levels of product to meet demand. Additionally, they took into consideration the decisive cost-saving initiatives the Company instituted, which resulted in approximately $25 million in reduced expenses, as well as the $287.5 million convertible notes financing the Company effected to raise capital while working remotely during the pandemic, which allowed the Company to avoid significant layoffs of employees and continue to advance development of its key strategic pipeline products, the greatest driver of long-term growth and value. The CNG Committee also noted that, notwithstanding the significant disruption to global sales caused by the pandemic, which at times dropped to 10% of pre-COVID levels, sales for 2020 remained relatively consistent with the prior year, decreasing only 5% from the prior year’s net sales. Additionally, when setting Mr. Gilliam’s base salary, the CNG Committee determined to bring it closer to the peer group median.

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Even after giving effect to these changes, the base salary of each Named Executive Officer was below the median for the comparable position in our peer group.

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We provide our senior leadership team, including our Named Executive Officers, with a performance-based annual bonus opportunity. The purpose of this annual bonus is to provide competitive incentives for those employees who contribute to the Company’s success, and to align our executives’ short-term compensation opportunity with the Company’s business objectives and performance expectations. The annual bonus opportunity helps further our compensation objective of aligning executive pay with achievement of the Company’s short-term goals, which are designed to help the Company achieve its long-term strategic goals and create long-term value for our stockholders. We believe this allows us to compete for top talent and encourages our executives to perform at a high level by providing a near-term reward for that performance.

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Annual Bonus Targets

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The chart below indicates the target bonus opportunity for each of our Named Executive Officers for 2021, which is stated as a percentage of base salary and was not changed from 2020 levels. For 2021, total target cash (which consists of base salary and target bonus opportunity) for each of our NEOs was below the

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median for comparable positions in our peer group. Bonuses are capped at 200% of target for each executive.

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Bonus Equity Election

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Under our 2021 bonus plan, our executives can elect to receive all or a portion of their annual bonus in the form of stock options, RSUs or cash. The election is made at the start of the year, so that the final value of the bonus payout increases or decreases based on both achievement of bonus targets and stock price performance, and creates an opportunity for our executives to further align their interests with those of our stockholders.

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To provide additional incentive for executives to elect equity and preserve cash and to create further alignment between our executives’ and stockholders’ interests, there is a 15% premium component to the conversion from the dollar value of the target bonus to the number of RSUs or stock options granted. The 15% premium was modeled on the 15% discount provided to employees who purchase shares of our common stock under the Glaukos Employee Stock Purchase Plan. If an executive were to elect to convert his or her cash bonus opportunity into an RSU award, then the executive would be granted a one-year performance stock unit award with respect to the targeted number of shares having a grant date value equal to the amount of the executive’s cash-denominated target bonus, plus the 15% premium to provide an incentive to convert cash to equity, based upon the closing market price on the date of grant. If an executive were to elect to convert his or her cash bonus opportunity into a stock option award, then the executive would be granted a one-year performance stock option award with respect to the targeted number of shares having a Black Scholes value, based upon the closing market price on the date of grant, equal to the amount of the executive’s cash-denominated target bonus, plus the 15% premium.

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The number of RSUs or options that ultimately vest would be determined in the same manner as the cash bonuses that became payable under our 2021 bonus plan described above (i.e., the number of RSUs or options that vests is performance-contingent so that the percentage that vest will be the same as the payout percentage for target cash bonuses; in other words, if bonuses were earned at 90% of target, then 90% of the target bonus RSUs or options would vest).

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For 2021, all of our NEOs elected to receive the full amount of their annual bonus in cash.

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Award Design

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The 2021 bonus plan was designed so that the Chief Executive Officer’s bonus was based 100% on the achievement of corporate objectives, while the other Named Executive Officers were based 75% on corporate objectives and 25% on individual performance. This structure reflects the Chief Executive Officer’s ultimate accountability for corporate performance during the year, while other executives with narrower responsibility are also accountable for performing their own functions.

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The earnout for revenue is subject to interpolation between the points shown. Actual revenue of $294 million exceeded the $272.8 million goal and resulted in a 255% earnout for the revenue portion of the bonus (weighted 50% of total bonus opportunity). The Milestone Goals and Individual performance may be scored above target based on the quality of achievement including timeliness, degree of success, and assessment of value creation that results.

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The Company’s corporate objectives for 2021 were established by the CNG Committee and the Board in March 2021, in consultation with our management team. Each objective was weighted to signify its importance to our short-term and long-term success and strategy. These goals were designed to be challenging but achievable and to align with the Company’s strategic plan and operating budget. These objectives were set when there was still much uncertainty around the ultimate impact of COVID, its variants and the government shutdowns on global sales and clinical and surgical operating dynamics.

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Our 2021 corporate objectives included both financial and product or development milestones. The financial objectives reflect the importance of continued strong, but disciplined, growth of the Company and the Company’s goal of transforming the treatment of chronic eye diseases with novel therapies that provide sustainable solutions to important clinical needs. Our two business goals were selected to emphasize the significance of pipeline progress for an innovation-oriented growth company. The products underlying these strategic goals represent opportunities for the Company to expand its market with products that have the potential to offer significant advantages over the current standard of care.

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Consistent with the Company’s goal of achieving continued growth, 50% of the 2021 bonus plan was earned based on our net sales for 2021. The CNG Committee set a net sales target of $272.8 million, which reflects a 21% increase over the Company’s 2020 net sales of $225.0 million. When setting this target, the CNG Committee considered the increasingly competitive landscape in our U.S. glaucoma franchise, as well as the CNG Committee’s desire to incentivize the NEOs to achieve top-line sales growth. The NEO’s would earn nothing under this metric unless the Company achieved net sales of more than $245.6 million in 2021, a nearly 10% increase over 2020 net sales and 90% of the target sales. The payout for the portion of each NEO’s bonus opportunity tied to this metric was eligible to range from 0% to 300% of the targeted amount, with the maximum payout capped at 10% overachievement of the sales target. The Company achieved net sales of $294.0 million in 2021, outperforming the target by approximately 8%. We believe the overachievement reflected a return to more normalized ophthalmic procedure levels following the rollout of the COVID-19 vaccines and the strong leadership of our management team notwithstanding the continuing impact of the pandemic on workforce arrangements, supply chain, international markets and headwinds created by reduced 2022 reimbursement rates announced by the U.S. Centers for Medicare & Medicaid Services in mid-2021 relating to procedures implanting trabecular bypass stents, such as our iStent products, in conjunction with cataract surgery.

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The other financial corporate objective was to incur operating expenses of less than the Company’s adjusted non-GAAP budget of $292.4 million in 2021. When setting this financial objective, the CNG Committee took into account our continued global expansion within sales and marketing, the Company’s substantial investments into its product pipeline, such as clinical studies supporting our potentially market-expanding pipeline products, including the clinical trials for both the iDose delivery platform and the iStent infinite, as well as R&D efforts with our earlier stage programs such as our retinal and dry eye disease therapies. This goal reflected, on an adjusted non-GAAP basis, an increase of an estimated 24% over 2020 operating expenses,

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and took into account the Company’s need to undertake certain capital expenditures that had been postponed in 2020 as part of the Company’s aggressive cost-saving initiative at the outset of the pandemic, such as the buildout of our new corporate headquarters facility, as well as continuing to invest in our product pipeline development efforts. The payout for the portion of each NEO’s bonus opportunity tied to this metric was eligible to range from 0% to 150% of the targeted amount. The Company’s adjusted non-GAAP operating expenses in 2021 were approximately $271.7 million. Based on these results, the CNG Committee determined that this financial objective had been achieved and earned at 100% of target.

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The first business objective was the filing of pre-market approval application for the iStent infinite product with the U.S. Food & Drug Administration (“FDA”) by the end of the Company’s third fiscal quarter of 2021. This metric was chosen to emphasize the significant potential market opportunity presented by the iStent infinite, as the first iStent product to be approved for implantation on a standalone basis, and to motivate management to progress toward approval of this treatment alternative as expeditiously as possible. The Company filed a pre-market approval application with the FDA on September 3, 2021, prior to the end of the third quarter. Based on this filing date, the CNG Committee determined that the Company achieved 100% of this strategic objective.

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The second business objective was completion and validation of the final product candidate for the Company’s iPRIME intraocular device. This product, a viscodelivery system, was chosen as a corporate objective for 2021 to reinforce the importance to the Company of developing a broad range of tools and treatment options for ophthalmic surgeons and other providers. The product candidate was completed and validated on August 31, 2021, well within the third quarter of 2021. The CNG Committee determined that the Company achieved 100% of this strategic objective.

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The two Named Executive Officers other than the Chief Executive Officer had individual objectives (described below) comprising 25% of that portion of their bonus.

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Mr. Calcaterra’s individual objectives for 2021 consisted of specific goals in the areas of global commercial sales, market access and marketing, including successful management of various regional product launches and oversight of global reimbursement access matters. Mr. Calcaterra also had individual objectives with respect to global commercial manufacturing matters, facilities management and clinical research, including the clinical trials for our pipeline products.

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Mr. Gilliam’s individual objectives consisted of specific goals in the areas of finance, quality, information technology, business systems, investor relations, internal audit and financial planning. This included integration of our corneal health Avedro subsidiary into our enterprise resource management system as well as a successful audit of both, overseeing successful regulatory and certification audits, implementation of several cybersecurity initiatives, establishment of all IT systems for new corporate headquarters, redesigning the investor relations website, and developing and launching an updated quarterly earnings announcement strategy. Mr. Gilliam also had individual objectives with respect to developing a global shared services platform to support administrative functions worldwide and integration of the glaucoma and corneal health quality organizations.

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Following the end of 2021, the Chief Executive Officer recommended, and the CNG Committee approved, achievement of 100% of each of Mr. Calcaterra’s and Mr. Gilliam’s individual objectives, and that 100% of the portion of each executive’s bonus tied to the individual objectives was earned. The determinations made by the CNG Committee with respect to the Company’s satisfaction of the corporate goals and the individual goals results in the following formulaic bonus plan achievement:

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* The net sales component of the bonus can be earned between 0-300% of target, but the individual bonuses are capped at 200% of target.

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Actual Bonus Payout

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For 2021, the CNG Committee determined that each NEO would be awarded a bonus equal to 177.7% of his target. Bonus payouts reflected the achievement of our NEOs against the corporate and individual, where applicable, goals determined for them at the start of the year. The CNG Committee determined that the bonus payout for the Company’s senior leadership would recognize and reward the effort and performance of our management team in achieving the Company’s near-term financial objectives and advancing toward the Company’s long-term goals to create greater value for our shareholders by bringing our pipeline products to market.

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The values of the portion of the 2021 NEO bonuses earned pursuant to formulaic criteria is set forth in the table below.

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2022 Bonus Plan

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In March 2022, the CNG Committee approved the 2022 executive bonus plan issued under our 2015 Omnibus Incentive Compensation Plan. With regard to performance targets, the CNG Committee determined to focus on key operational initiatives for the corporate performance component, which include financial components similar to those measured in 2021 as well as strategic objectives tied to pipeline product approvals and pipeline product development accomplishments by the end of 2022. In addition, in response to shareholder feedback that the Company tie executive compensation to its ESG initiatives, the CNG Committee added a performance objective to achieve a certain number of the ESG goals disclosed in the Company’s 2021 Sustainability Report in order for the leadership team, including the NEOs, to earn a portion

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of their 2022 bonuses. The respective weightings of these 2022 bonus targets are consistent with those applied in 2021.

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The CNG Committee believes it is essential to provide long-term equity-based compensation to our executive officers in order to link both the interests and risks of our executive officers with those of our stockholders, which is a cornerstone of the Company’s pay for performance philosophy. Equity awards with a multi-year vesting schedule are designed to reward the creation and preservation of long-term stockholder value. Our management team follows the same philosophy: all employees in the Company receive annual equity grants, to foster a sense of ownership and align interests with those of our investors.

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For 2021, long-term incentive compensation consisted of both time-based and performance-based equity grants. Performance-based equity consists of grants of equity that require the achievement of pre-determined operational or financial objectives in order to vest. Additionally, like all equity grants, the value of performance-based equity increases if the price of the Company’s common stock increases. The CNG Committee believes that the use of performance-based equity advances multiple goals that benefit both the Company and stockholders. Performance-based equity grants incentivize the achievement of the Company’s long- and short-term strategic goals, they motivate executives to work hard to increase the value of the Company, as evidenced by increased stock price, and they encourage executives to remain employed with the Company.

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Both the time-based and the performance-based portions of our CEO’s 2021 equity grant were designed to be provided half in RSUs and half in stock options. Our other NEO’s awards were designed as one-third time based RSUs, one-third time-based options and one-third performance based RSUs. Our executives were given the opportunity to convert the time-based stock option portion of their equity award into RSUs with equivalent value, to convert the time-based RSU portion of their equity award into stock options with equivalent value and to convert the performance-based RSU portion of their equity grant into performance-based stock options with equivalent value and the same long-term performance goals. Mr. Burns was additionally provided the opportunity to convert the performance-based stock option portion of his award into PRSUs with equivalent value and the same long-term performance goals. The opportunity to elect to have full value shares granted as options affords those executives greater potential reward in exchange for the lack of guaranteed value from an RSU. The CNG Committee views this election to convert full value shares to options as supporting the Company’s entrepreneurial spirit of growth, and the conversion of options to full value shares as providing a strong retention incentive. Each of Messrs. Burns, Calcaterra and Gilliam chose to receive all of their 2021 time-based and performance equity in the form of RSUs.

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In 2021, 50% of the equity grant value for our CEO, Mr. Burns, was in the form of performance-based equity to align Mr. Burns’ interests with those of our stockholders and require him to achieve critical long-term growth goals in order to earn half of his award. The other half of Mr. Burns’ 2021 equity grant was granted in the form of time-based RSUs. Our other NEOs’ 2021 long-term incentive equity grants were provided two-thirds in time-based RSUs and one-third in performance-based RSUs.

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2021 Named Executive Officer Equity Grants

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The CNG Committee considered several factors when determining 2021 equity award sizes, including peer group data and management’s strong leadership and performance during the operationally challenging times of 2020. The CNG Committee noted that senior leaders had preserved jobs, protected core research and development programs and maintained a financially strong organization despite the COVID headwinds it faced. The CNG Committee also considered the level of grant that it believed would be appropriate to provide

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strong retention value and more closely link our Named Executive Officers’ compensation to our stockholders’ interests.

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The following table shows the intended target total annual equity grant value awarded to each Named Executive Officer in 2021, and the number of time-based RSUs and PRSUs granted based on the 2021 performance and compensation review process.

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The equity grants of time-based RSUs to our Named Executive Officers in 2021 vest over four years, with 25% of the RSUs vesting and being delivered on each of the first four anniversaries of the grant date.

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For 2021, 50% of our CEO’s 2021 equity awards was in the form of performance-based equity and 33.3% of our other Named Executive Officers’ equity awards was in the form of performance-based equity.

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The performance-based equity granted to our executives in 2021 may be earned based upon receipt of regulatory approvals for certain designated products in development obtained over a four-year performance period. The performance period was chosen in response to stockholder feedback about aligning compensation with achievement of ESG goals such as product innovation, and the CNG Committee believes it adds additional retention incentive and motivates executives to create long-term value for the Company. The CNG Committee recognized that bringing new products to market is the most effective way for the Company to grow in sales and overall value to our stockholders. By incentivizing the approvals necessary to commercialize our many pipeline products, the CNG Committee created even greater alignment between our executives and our investors. Additionally, these performance targets are required to be met within four years, putting a tight timeframe on the window to earn the full equity grant and encouraging our management team to get products to market as promptly as possible. The CNG Committee believes that these performance goals are rigorous because many medical products do not meet the stringent approval requirements of the FDA or in the EU, and these goals will help the Company achieve its strategic and operational goals and create long-term value.

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Performance is measured by FDA or European Union product approvals, with 50% of the target award earned for each designated product that receives marketing approval from the FDA, and 25% earned for each designated product that receives a CE Mark in the European Union. Fifty percent of earned awards vest 90 days after achievement, with the remaining 50% of the earned portion vesting one year after achievement. The maximum potential payout under this grant is 250% of the target, and all approvals must be received by the end of fiscal year 2024, or filed by June 30, 2024 and subsequently receive approval.

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On January 6, 2022, the Company received FDA clearance of its iPRIME Viscodelivery System, which was one of the designated pipeline products subject to the performance grant. Based on this clearance, each of our NEOs earned 50% of his 2021 performance-based equity grant. Half of these earned shares vested on April 6, 2022, ninety days after the approval was received, and the other half will vest on January 6, 2023, one year after the approval date. The Company believes that the FDA approval for a product in this time frame reflects excellent performance on the part of our management team and notes that the Company’s stock price has increased since the approval from a closing price of $45.34 on January 6, 2022 to a closing price of over $60 between April 1, 2022 and April 13, 2022.

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EXECUTIVE COMPENSATION

2022 CEO Long-Term Equity Grant

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In 2022, the CNG Committee determined that Mr. Burns’ target equity grant value for 2022 should be $4.6 million, reflecting a 13% reduction from his target equity grant value in 2021. This equity grant reduces Mr. Burns’ target total direct compensation for 2022 by approximately 10% from its 2021 level, resulting in target total direct compensation slightly below the peer group median.