0001104659-23-051441.txt : 20230427 0001104659-23-051441.hdr.sgml : 20230427 20230427164641 ACCESSION NUMBER: 0001104659-23-051441 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 41 FILED AS OF DATE: 20230427 DATE AS OF CHANGE: 20230427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IRONWOOD PHARMACEUTICALS INC CENTRAL INDEX KEY: 0001446847 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 043404176 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-34620 FILM NUMBER: 23857962 BUSINESS ADDRESS: STREET 1: 100 SUMMER STREET, SUITE 2300 CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 617-621-7722 MAIL ADDRESS: STREET 1: 100 SUMMER STREET, SUITE 2300 CITY: BOSTON STATE: MA ZIP: 02110 DEF 14A 1 tm231938-2_def14a.htm FORM DEF 14A tm231938-1_nonfiling - none - 13.8750801s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.   )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12
IRONWOOD PHARMACEUTICALS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):

No fee required.

Fee paid previously with preliminary materials

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 
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100 Summer Street, Suite 2300
Boston, Massachusetts 02110
NOTICE OF 2023 ANNUAL MEETING OF STOCKHOLDERS OF
IRONWOOD PHARMACEUTICALS, INC.
Date:
Tuesday, June 20, 2023
Time:
9:00 a.m. Eastern Time
Location:
Our 2023 annual meeting of stockholders will be a “virtual meeting.” You will be able to attend the annual meeting, vote and submit questions via live webcast by visiting www.virtualshareholdermeeting.com/IRWD2023.
Purpose:
We are holding the annual meeting for stockholders to consider five company sponsored proposals:
1.
To elect our nine director nominees, Mark Currie, Ph.D., Alexander Denner, Ph.D., Andrew Dreyfus, Jon Duane, Marla Kessler, Thomas McCourt, Julie McHugh, Catherine Moukheibir and Jay Shepard, each to serve for a one-year term extending until our 2024 annual meeting of stockholders and their successors are duly elected and qualified;
2.
To hold an advisory vote on named executive officer compensation;
3.
To hold an advisory vote on the frequency of the advisory vote on named executive officer compensation;
4.
To approve an amendment to our 2019 Equity Incentive Plan, or the 2019 Plan, to, among other things, increase the aggregate number of shares of Class A common stock authorized for issuance under the 2019 Plan by 6,000,000 shares; and
5.
To ratify our audit committee’s selection of Ernst & Young LLP as our auditors for 2023.
We will also consider action on any other matter that may be properly brought before the meeting or any postponement(s) or adjournment(s) thereof.
Our board of directors recommends you vote “for” each of the nine nominees for director (proposal no. 1), “for” the advisory vote on named executive officer compensation (proposal no. 2), “one year” for the frequency of the advisory vote on named executive officer compensation (proposal no. 3), “for” the approval of the amendment to our 2019 Plan (proposal no. 4), and “for” ratification of our selection of auditors (proposal no. 5) . Only stockholders of record at the close of business on April 21, 2023 are entitled to notice of and to vote at the meeting.
We are pleased to take advantage of the Securities and Exchange Commission, or SEC, rules that allow us to furnish proxy materials to our stockholders on the internet. We believe these rules allow us to provide you with the information that you need while lowering the costs of delivery and reducing the environmental impact of the annual meeting.
Our annual meeting, as in prior years, will be conducted in a virtual-only format, solely by means of a live audio webcast. Our virtual stockholder format uses technology designed to provide our stockholders rights and opportunities to participate in the virtual meeting similar to an in-person meeting. A virtual meeting allows more stockholders to attend the meeting without cost from anywhere around the globe. You may attend the meeting, vote and submit questions electronically during the meeting via live webcast by visiting the website provided above. A list of stockholders of record will be available electronically during the meeting. The website can be accessed on a computer, tablet, or phone with internet connection. To be admitted to the meeting at www.virtualshareholdermeeting.com/IRWD2023, you must enter the 16-digit control number found on your proxy card, voting instruction form or notice that you received.
Proxy Material Mailing Date:
April 27, 2023
Sincerely,
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Thomas McCourt
Chief Executive Officer and Director

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Table of Contents
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Letter From Our CEO 1
About Ironwood 3
Our Board of Directors 6
26
Our Executives 28
Executive Compensation 31
31
52
71
73
Proposal No. 4 Amendment to Ironwood’s 2019 Equity Incentive Plan 75
Our Stockholders 83
Certain Relationships and Related Person Transactions 86
Proposal No. 5 Ratification of our Selection of Auditors
87
User’s Guide 89
Stockholder Communications, Proposals and Nominations for Directorships 93
SEC Filings 94
Appendix A — Amendment and Restatement 2019 Equity Incentive Plan A-1
 
i   Ironwood

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Letter From Our CEO
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Dear Ironwood stockholders,
With great pride, I share the tremendous strides we made this past year toward our vision of becoming the leading GI healthcare company in the U.S. Our efforts to advance GI treatment and redefine the standard of care for GI patients remain central to our mission as an organization and the value we deliver to our stakeholders. We remain focused on executing our GI-focused strategy by 1) maximizing LINZESS® (linaclotide), 2) strengthening and progressing our innovative GI portfolio, and 3) delivering sustained profits and generating cash flow.
2022 was a tough year for the economy and broader biopharmaceutical industry. Despite the challenges our industry faced, I am delighted to report we continued to drive strong LINZESS prescription demand growth, delivered our full year adjusted EBITDA guidance of over $250 million and made strides across all three of our key strategic priorities.
While 2022 LINZESS U.S. net sales growth came in lower than our expectations, during 2022, LINZESS continued to see strong prescription demand growth, profitability, and widespread acceptance among healthcare practitioners as the U.S. branded prescription market leader for adults with IBS-C or CIC. Now in its eleventh year on the market, LINZESS has treated over 4 million unique patients, reflecting the true magnitude of its impact. Additionally, LINZESS is strongly recommended by guidelines of the American Gastroenterological Association (AGA) and American College of Gastroenterology (ACG) for the treatment of adult patients with IBS-C.
Our strong balance sheet, and our highly skilled and GI-experienced management team, position us well to continue to invest in LINZESS as a growth brand and actively pursue highly differentiated GI assets to add to our portfolio. We continue to take a balanced and disciplined approach to capital deployment and remain focused on identifying and investing in opportunities that we believe will create value for our patients and shareholders over the long term.
We are particularly excited about the potential to expand the clinical utility of LINZESS to underserved patient populations. We submitted a supplemental New Drug Application (sNDA) with the U.S. FDA for functional constipation in children and adolescents 6 to 17 years of age, which the U.S. FDA granted priority review and assigned a Prescription Drug User Free Act date of June 14, 2023. If approved, LINZESS would be the first and only U.S. FDA-approved prescription therapy for functional constipation in this patient population — an estimated 6 million patients in the U.S. This would be incremental to the need that still exists among the approximately 40 million adults in the U.S. that suffer from IBS-C or CIC. We strongly believe that LINZESS is well-positioned to be the branded market leader across both its current and potential future indications.
We continue our efforts to build our innovative pipeline by advancing clinical trial programs for potential treatments for primary biliary cholangitis (PBC) and interstitial cystitis/bladder pain syndrome (IC/BPS), and endometriosis. In 2022, our partner, COUR Pharmaceuticals, initiated a proof-of-concept study in PBC for CNP-104, and we kicked off study startup activities at the end of the year for IW-3300, our wholly-owned guanylate cyclase-C (GC-C) agonist for the potential treatment of visceral pain conditions, such as interstitial cystitis/bladder pain syndrome (IC/BPS). We anticipate several exciting milestones ahead with the potential to advance the value potential of our pipeline in 2023.
 
2023 Proxy Statement   1

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Our record-high employee engagement scores led to a third-consecutive Top Workplaces USA award, a source of pride for Ironwood. We recently published our second Environmental, Social, and Governance (ESG) Report and continue to enhance our focus on building Diversity, Equity, and Inclusion (DE&I) into our daily business.
I encourage you to read the pages that follow that tell you more about our journey as a company. We believe Ironwood is well-positioned for continued growth as we execute against our strategic priorities, make a difference in the lives of GI patients, and responsibly generate shareholder value. We ask for your voting support on the items described in this proxy statement so we can have the opportunity to continue to deliver for you and all our stockholders.
Sincerely,
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Thomas McCourt
Chief Executive Officer and Director
 
2   Ironwood

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About Ironwood
We aspire to bring innovative treatments for GI diseases to patients in need.
We are a gastrointestinal (GI) healthcare company dedicated to advancing the treatment of GI diseases and redefining the standard of care for GI patients. We are focused on the development and commercialization of innovative GI product opportunities in areas of significant unmet need, leveraging our demonstrated expertise and capabilities in GI diseases.
LINZESS® (linaclotide), our commercial product, is the first product approved by the United States Food and Drug Administration, or U.S. FDA, in a class of GI medicines called guanylate cyclase type C agonists, or GC-C agonists, and is indicated for adults suffering from irritable bowel syndrome with constipation, or IBS-C, or chronic idiopathic constipation, or CIC. LINZESS is the U.S. branded prescription market leader for adults in the IBS-C and CIC categories. LINZESS is available to adults suffering from IBS-C or CIC in the United States, Mexico and Saudi Arabia, IBS-C or chronic constipation in Japan, and IBS-C in China. Linaclotide is available under the trademarked name CONSTELLA® to adults suffering from IBS-C or CIC in Canada, and to adults suffering from IBS-C in certain European countries.
We recognize the value of collaboration and have a track record of establishing, operating and evolving high-performance partnerships globally. We have strategic partnerships with leading pharmaceutical companies to support the development and commercialization of linaclotide around the world. We also aim to leverage our leading capabilities in GI to bring additional treatment options to GI patients.
We believe our history of innovation in GI medicine, deep expertise in developing and commercializing innovative GI therapies, established relationships within the GI community, as well as our leadership’s experience building blockbuster brands, positions us well to advance GI care and bring treatments with the potential to deliver great impact for patients, our business and our stockholders.
In 2022, our GI-focused strategy, building on our commercial success and GI development capabilities, continued to center on three core priorities: maximize LINZESS, strengthen and progress our innovative GI portfolio, and deliver sustained profits and generate cash flow.
Performance Against 2022 Strategic Priorities
1.
Maximize LINZESS

We recognized $398.8 million in collaborative arrangements revenue related to sales of LINZESS in the U.S. during the year ended December 31, 2022, a slight decrease compared to the year ended December 31, 2021. Prescription demand growth of 9% was offset by net price erosion and inventory channel fluctuations. We remain confident in the long-term growth potential of LINZESS based on continued strong prescription demand.

In September 2022, we announced positive topline data from a Phase III clinical trial evaluating linaclotide 72 mcg in pediatric patients aged 6-17 years with functional constipation, or FC. The trial met its primary and secondary endpoints, demonstrating that linaclotide 72 mcg improved frequency of spontaneous bowel movements and stool consistency. Linaclotide was generally well-tolerated, and the safety profile is consistent with previously reported studies with linaclotide in FC and irritable bowel syndrome in pediatric patients. In December 2022, we and AbbVie, Inc., or AbbVie, submitted a Supplemental New Drug Application, or sNDA,
 
2023 Proxy Statement   3

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to the U.S. FDA seeking approval of a new indication of linaclotide for FC in pediatric patients aged 6-17 years. In February 2023, the U.S. FDA granted priority review to our sNDA and assigned a Prescription Drug User Free Act, or PDUFA, date of June 14, 2023. Additional clinical pediatric programs in IBS-C and FC are ongoing. There are currently no U.S. FDA-approved prescription therapies for FC.
2.
Strengthen and Progress our Innovative GI Portfolio

Through our collaboration and license option agreement with COUR Pharmaceuticals, we and COUR are developing CNP-104 for the potential treatment of PBC, a rare autoimmune disease targeting the liver that affects approximately 130,000 people in the U.S., according to a study published in Clinical Gastroenterology and Hepatology in 2018. If successful, CNP-104 has the potential to be the first approved PBC disease-modifying therapy. In December 2021, the U.S. FDA granted Fast Track Designation to CNP-104. COUR is currently conducting a clinical study to evaluate the safety, tolerability, pharmacodynamic effects and efficacy of CNP-104 in PBC patients, with early data assessing T-cell response from patients enrolled in the clinical study expected in the second half of 2023. We expect that such early data will inform timing of topline data readout.

We are advancing IW-3300, a GC-C agonist, for the potential treatment of visceral pain conditions, including interstitial cystitis/bladder pain syndrome, or IC/BPS, and endometriosis, both having a limited number of treatment options available. IC/BPS affects an estimated 4 to 12 million people in the U.S., according to the Interstitial Cystitis Association as of 2022. An estimated 4 million reproductive-age women in the U.S. have been diagnosed with endometriosis, according to a study published in Gynecologic and Obstetric Investigation in 2017. We successfully completed Phase I studies to evaluate the safety and tolerability of IW-3300 in healthy volunteers and expect to begin patient dosing for the Phase II proof of concept study in IC/BPS patients in early 2023.

We also continue to evaluate innovative, externally developed clinical and commercial products for in-licensing, or acquisition opportunities. We are prioritizing assets that address serious GI diseases in areas primarily managed by gastroenterologists or hepatologists to create the next growth horizon for Ironwood as a leader in GI. In addition, we are pursuing assets that we believe have a sound mechanistic rationale and a clear development path toward potential regulatory approval and commercialization.
3.
Deliver Sustained Profits and Generate Cash Flow

We delivered net income of $175.1 million during the year ended December 31, 2022.

We generated $273.8 million in cash from operations during the year ended December 31, 2022, ending the year with $656.2 million in cash and cash equivalents.

In May 2021, our Board of Directors authorized a program to repurchase up to $150.0 million of our Class A Common Stock. During 2022, we repurchased 10.8 million shares of Class A Common Stock at an aggregate purchase price of $123.4 million. We completed the share repurchase program in May 2022 and retired the repurchased shares. In addition, in June 2022, we repaid the remaining $120.7 million aggregate principal amount of the 2022 Convertible Senior Notes in cash. As of December 31, 2022, we had $400.0 million in convertible notes outstanding.
As we continue to execute on our strategic priorities, we have great confidence in our ability to continue making a meaningful difference for GI patients and grow our position as a leading GI healthcare company in the U.S.
Our 2022 company performance achievement multiplier, which we used as a key consideration in determining executive compensation for 2022 performance, was 75%, as determined by our board of directors. Please see the Compensation Discussion and Analysis section included elsewhere in this proxy statement for detailed information on compensation to our 2022 named executive officers.
 
4   Ironwood

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Note about Forward-Looking Statements
This proxy statement contains forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about Ironwood’s ability to execute on its mission; the potential opportunity for LINZESS growth and improved brand margins, including the potential for LINZESS to be the branded market leader cross current and potential future indications; the advancement of our linaclotide pediatrics development program; the development of IW-3300 as a potential first in class treatment for visceral pain conditions; potential of CNP-104 to be the first PBC disease modifying therapy and the expected timing of receiving early data from the clinical study for CNP-104 in PBC patients and the results thereof, and the belief that this will inform timing of topline data readout; the in-licensing or acquisition of externally developed clinical and commercial products; the potential long-term growth of our GI pipeline; our ability to deliver impact for patients, our business, and our stockholders; and our approach to capital allocation. These forward-looking statements speak only as of the date of this proxy statement, and Ironwood undertakes no obligation to update these forward-looking statements. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statement. Applicable risks and uncertainties include those related to the effectiveness of development and commercialization efforts by us and our partners; preclinical and clinical development, manufacturing and formulation development of linaclotide, CNP-104, IW-3300, and our product candidates; the risk that clinical programs and studies, including for the linaclotide pediatric program, IW-3300 and CNP-104, may not progress or develop as anticipated, including that studies are delayed or discontinued for any reason, such as safety, tolerability, enrollment, manufacturing, economic or other reasons; the risk that findings from our completed nonclinical and clinical studies may not be replicated in later studies; the risk that we or our partners are unable to obtain, maintain or manufacture sufficient LINZESS or our product candidates, or otherwise experience difficulties with respect to supply or manufacturing; the efficacy, safety and tolerability of linaclotide and our product candidates; the risk that the therapeutic opportunities for LINZESS or our product candidates are not as we expect; decisions by regulatory and judicial authorities; the risk we may never get additional patent protection for linaclotide and other product candidates, that patents for linaclotide or other products may not provide adequate protection from competition, or that we are not able to successfully protect such patents; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; the risk that we may elect to not exercise our option to acquire the exclusive license for CNP-104; the risk that the development of any of our clinical pediatric programs in IBS-C and functional constipation in 6 to 17 years old, CNP-104 and/or IW-3300 are not successful or that any of our product candidates is not successfully commercialized; the risk that the FDA will not approve our sNDA submission for the potential indication in functional constipation in pediatric patients aged 6-17 years; outcomes in legal proceedings to protect or enforce the patents relating to our products and product candidates, including abbreviated new drug application litigation; the risk that financial and operating results may differ from our projections; developments in the intellectual property landscape; challenges from and rights of competitors or potential competitors; the risk that our planned investments do not have the anticipated effect on our company revenues; developments in accounting guidance or practice; Ironwood’s or AbbVie’s accounting practices, including reporting and settlement practices as between Ironwood and AbbVie; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; the impact of the COVID-19 pandemic; and the risks listed under the heading “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and in our subsequent SEC filings.
Note regarding Trademarks
In this proxy statement, references to “the company” or “Ironwood” and, except within the Audit Committee Report and the Compensation Committee Report, references to “we”, “us” or “our” mean Ironwood Pharmaceuticals, Inc. LINZESS® and CONSTELLA® are trademarks of Ironwood Pharmaceuticals, Inc. Any other trademarks referred to in this proxy statement are the property of their respective owners. All rights reserved. The contents of our website are not incorporated into this document and you should not consider information provided on our website to be part of this document.
 
2023 Proxy Statement   5

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Our Board of Directors
Who We Are
The following table sets forth certain information, as of April 27, 2023, with respect to each of our directors. Each director has been nominated for election at the 2023 annual meeting of stockholders to serve for a one-year term extending until the 2024 annual meeting of stockholders and his or her successor is duly elected and qualified.
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Name
Age
Audit
Committee
Governance
and Nominating
Committee
Compensation
and HR Committee
Mark Currie, Ph.D.
68
Alexander Denner, Ph.D.
53 C
Andrew Dreyfus
64 C
Jon Duane
64
Marla Kessler
53
Thomas McCourt
65
Julie McHugh, Chair
58
Catherine Moukheibir
63 C
Jay Shepard
65
“C” indicates chair of the committee.
 
6   Ironwood

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MARK
CURRIE, Ph.D.
Former President and Chief
Scientific Officer, Cyclerion
Therapeutics, Inc.
Age: 68
Director since 2019
Board Committees

Compensation and HR Committee

Dr. Currie has been the chair of the scientific advisory board of Cyclerion Therapeutics, Inc., or Cyclerion, a clinical-stage biopharmaceutical company, since January 2021. Dr. Currie previously served as Cyclerion’s president and chief scientific officer from April 2019 to December 2020. Prior to joining Cyclerion, Dr. Currie served as senior vice president, chief scientific officer and president of research and development at Ironwood from 2002 to April 2019.

Prior to joining Ironwood, Dr. Currie directed cardiovascular and central nervous system disease research as vice president of discovery research at Sepracor, Inc. and initiated, built and led discovery pharmacology and also served as director of arthritis and inflammation at Monsanto Company.

Dr. Currie currently serves on the board of directors of Science Exchange, Inc. and Sea Pharmaceuticals, LLC, privately held companies.

Dr. Currie earned a B.S. in biology from the University of South Alabama and holds a Ph.D. in cell biology from the Bowman Gray School of Medicine of Wake Forest University.

We believe that Dr. Currie’s vast experience leading the research and development efforts of an international biotechnology company will prove instrumental in guiding us through the research and development of novel therapies.
ALEXANDER DENNER, Ph.D.
Founding Partner and Chief
Investment Officer, Sarissa
Capital Management LP; Chief
Executive Officer of Sarissa Capital Acquisition Corp.
Age: 53
Director since 2020
Board Committees

Governance and Nominating Committee, Chair

Dr. Denner is a founding partner and the chief investment officer of Sarissa Capital Management LP, or Sarissa, a registered investment advisor, where he has been since 2011. Dr. Denner also has been chief executive officer of Sarissa Capital Acquisition Corp., a special purpose acquisition company since December 2020.

Prior to joining Sarissa, Dr. Denner served as a senior managing director at Icahn Capital L.P, an investment advisory firm, from 2006 to 2011. Prior to that, he served as a portfolio manager at Viking Global Investors, a private investment fund, and Morgan Stanley Investment Management, a global asset management firm.

Dr. Denner serves on the board of directors of Biogen Inc. (Nasdaq: BIIB), a public company. Dr. Denner also serves on the board of directors of Attralus, Inc. and Sarissa Capital Acquisition Corp., each of which is a privately held company. In the last five years, Dr. Denner has served as chair of the board of directors of The Medicines Company.

Dr. Denner earned his B.S. in mechanical engineering from Massachusetts Institute of Technology, an M.S. and M.Phil. in mechanical engineering from Yale University and an interdisciplinary Ph.D. from Yale University.

Dr. Denner brings to the board significant experience overseeing the operations and research and development of healthcare companies and evaluating corporate governance matters. He also has extensive experience as an investor, particularly with respect to healthcare companies, and possesses broad healthcare industry knowledge.
 
2023 Proxy Statement   7

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ANDREW
DREYFUS
Former President and Chief
Executive Officer for Blue Cross
Blue Shield of Massachusetts
Age: 64
Director since 2016
Board Committees

Compensation and HR Committee, Chair

Mr. Dreyfus most recently served as president and chief executive officer for Blue Cross Blue Shield of Massachusetts, or BCBSMA, one of the largest Blue Cross Blue Shield insurance plans in the country, from 2010 to 2022. From 2005 to 2010, Mr. Dreyfus served as the executive vice president of healthcare services of BCBSMA.

Prior to joining BCBSMA, he served as the first president of the Blue Cross Blue Shield Foundation. Mr. Dreyfus also previously served as executive vice president of the Massachusetts Hospital Association and held a number of senior positions in Massachusetts state government, including undersecretary of consumer affairs and business regulation.

Mr. Dreyfus serves on the board of directors of the Joint Commission and BCBSMA Foundation, both of which are non-profit organizations. He is a member of the advisory boards of Ariadne Labs, Vanna Health and the Massachusetts Coalition for Serious Illness Care. He previously served on the board of directors for BCBSMA, the Blue Cross Blue Shield Association and RIZE Massachusetts.

Mr. Dreyfus received a B.A. in English from Connecticut College.

Mr. Dreyfus brings to our board of directors significant expertise in the healthcare payer and reimbursement market, and broad management and executive leadership experience, providing valuable insight as we continue to develop and commercialize medicines in an evolving healthcare landscape.
JON
DUANE
Senior Partner Emeritus,
McKinsey & Company
Age: 64
Director since 2019
Board Committees

Governance and Nominating Committee

Compensation and HR Committee

Mr. Duane is senior partner emeritus at McKinsey & Company, or McKinsey, an international management consulting company. Before his retirement in December 2017, Mr. Duane had served as a partner at McKinsey since 1992.

At McKinsey, Mr. Duane founded and led the firm’s biotech practice. In that role, Mr. Duane advised both private and public companies in the pharmaceutical, medical device and life science industries, as well as academic research centers, on various strategic initiatives.

Mr. Duane serves as the executive chair on the board of directors of Nashville Biosciences, LLC, a privately held company.

Mr. Duane graduated from Wesleyan University with a B.A. in government and received an M.B.A from Harvard Business School.

Mr. Duane brings to the board of directors significant experience advising academic research centers and companies across the life science and medical device industries.
 
8   Ironwood

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MARLA
KESSLER
Chief Marketing Officer, Datavant, Inc.
Age: 53
Director since 2019
Board Committees

Compensation and HR Committee

Ms. Kessler has been chief marketing officer of Datavant, Inc., or Datavant, a health IT company, since October 2022. Prior to joining Datavant, Ms. Kessler served as chief customer officer of Aetion, Inc., or Aetion, a health care technology company, from September 2021 to October 2022, and prior that, as an advisor to the chief executive officer of IQVIA Holdings Inc., or IQVIA (formerly IMS Health and Quintiles), a global analytics and technology company, from October 2020 to February 2021. Prior to that, Ms. Kessler had been the senior vice president for strategy, marketing and communications for IQVIA since October 2016.

Previously, Ms. Kessler served in various roles for IQVIA, including vice president for global services marketing and knowledge management from 2013 to 2016, regional leader of the IMS Consulting Group in Europe from 2011 to 2013, location manager for the London IMS Consulting Group from 2009 to 2011 and senior principal from 2008 to 2009.

Before joining IQVIA, Ms. Kessler led several marketing efforts for Pfizer Inc. from 2004 to 2007 and worked in consulting for McKinsey & Company from 1996 to 2004.

Ms. Kessler received a B.S. in economics from Arizona State University and an M.B.A. from the Fuqua School of Business at Duke University.

Ms. Kessler provides an important commercial perspective to our board of directors given her expertise in strategic marketing, evidence-based research and customer experience in the life science industry.
THOMAS
McCOURT
Chief Executive Officer, Ironwood Pharmaceuticals, Inc.
Age: 65
Director since 2021

Mr. McCourt has served as our chief executive officer and member of the board of directors since June 2021 and had previously served as president and interim chief executive officer from March 2021 to June 2021 and as president from April 2019 to June 2021. Prior to April 2019, Mr. McCourt served as our senior vice president of marketing and sales and chief commercial officer since joining Ironwood in 2009.

Prior to joining Ironwood, Mr. McCourt led the U.S. brand team for denosumab at Amgen Inc. from 2008 to 2009. Prior to that, Mr. McCourt was with Novartis AG from 2001 to 2008, where he directed the launch and growth of ZELNORM™ for the treatment of patients with IBS-C and CIC and held a number of senior commercial roles, including vice president of strategic marketing and operations.

Mr. McCourt was also part of the founding team at Astra-Merck Inc., leading the development of the medical affairs and science liaison group and then serving as brand manager for PRILOSEC® and NEXIUM®.

Mr. McCourt serves on the board of directors and as a member of the compensation committee of Pliant Therapeutics, Inc. (Nasdaq: PLRX), a public company, and on the board of trustees for the American Society of Gastrointestinal Endoscopy (ASGE). Mr. McCourt previously served on the board of directors of Acceleron Pharma Inc., including as a member of the audit committee and the chair of the nominating and governance committee.

Mr. McCourt received a B.S. in pharmacy from the University of Wisconsin.

Given his role as our chief executive officer and his previous leadership roles at the company since joining in 2009, we believe Mr. McCourt brings unique and in-depth insight into the operations and management of the company, which together with his extensive commercial experience, his deep knowledge of GI, and his experience launching and achieving blockbuster status for LINZESS, are valuable to our board of directors.
 
2023 Proxy Statement   9

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JULIE
McHUGH, CHAIR
Former Chief Operating Officer, Endo Health Solutions, Inc.
Age: 58
Director since 2014
Board Committees

Audit Committee

Governance and Nominating Committee

Ms. McHugh most recently served as chief operating officer for Endo Health Solutions, Inc., or Endo, from 2010 through 2013, where she was responsible for the specialty pharmaceutical and generic drug businesses.

Prior to joining Endo, Ms. McHugh was the chief executive officer of Nora Therapeutics, Inc.

Before that she served as company group chairman for the worldwide virology business unit of Johnson & Johnson, or J&J, and previously she was president of Centocor, Inc., a J&J subsidiary. While at J&J, Ms. McHugh oversaw the development and launches of several products, including Remicade® (infliximab) and she was responsible for oversight of a research and development portfolio including compounds targeting autoimmune diseases, HIV, hepatitis C, and tuberculosis.

Prior to joining Centocor, Inc., Ms. McHugh led marketing communications for gastrointestinal drug Prilosec® (omeprazole) at Astra-Merck Inc.

Ms. McHugh currently serves on the board of directors of the following public companies: Lantheus Holdings, Inc. (Nasdaq: LNTH), and Evelo Biosciences, Inc. (Nasdaq: EVLO). Ms. McHugh also serves on the board of directors of Xellia Pharmaceuticals ApS, a privately held company. She also serves on the strategic advisory board for HealthCare Royalty Partners and the board of visitors for the Smeal College of Business of Pennsylvania State University. She previously served on the board of directors for Aerie Pharmaceuticals, Inc., Trevena, Inc., ViroPharma Inc., Epirus Biopharmaceuticals, Inc., the Biotechnology Industry Organization, the Pennsylvania Biotechnology Association and the New England Healthcare Institute.

Ms. McHugh received her M.B.A. degree from St. Joseph’s University and her B.S. degree from Pennsylvania State University.

Ms. McHugh’s experience as a chief executive officer and a chief operating officer at large multinational pharmaceutical companies makes her a valuable member of our board of directors. Her deep knowledge of Ironwood’s history and strategy and strong relationships with our senior leadership team also make her a valuable resource.
CATHERINE
MOUKHEIBIR
Former Chief Executive Officer,
MedDay Pharmaceuticals
Age: 63
Director since 2019
Board Committees

Audit Committee, Chair

Ms. Moukheibir most recently served as chief executive officer of MedDay Pharmaceuticals, or MedDay, a biopharmaceutical company that focused on nervous system disorders, from July 2019 to January 2021. She was also the chairman of the board of directors of MedDay from April 2016 to January 2021.

Prior to that, Ms. Moukheibir served as the senior advisor for finance and a member of the executive board of directors at Innate Pharma SA, an oncology company, from 2011 to 2016, and as the chief financial officer for Movetis N.V. from 2008 to 2010, when it was acquired.

Ms. Moukheibir previously served as the director of capital markets for Zeltia Group S.A. from 2001 to 2007.

Ms. Moukheibir currently serves on the board of directors of the following public companies: MoonLake Immunotherapeutics AG (Nasdaq: MLTX), Biotalys NV (EBR: BTLS) and Oxford Biomedica plc (LSE: OXB). Ms. Moukheibir also serves on the board of directors of Asceneuron SA, Noema Pharma AG, DNA Script SAS, and CMR Surgical, all of which are privately held companies. She held past directorships on the boards of directors of Ablynx NV, Cerenis Therapeutics SA, Creabilis S.A., GenKyoTex S.A., Kymab Group Limited, Orphazyme A/S and Zealand Pharma A/S.

Ms. Moukheibir has an M.A. in economics and an M.B.A. from Yale University.

Ms. Moukheibir’s long leadership career in the biopharmaceutical industry, as well as her deep background in international finance, provide her with valuable business and financial expertise in support of our corporate objectives.
 
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JAY
SHEPARD
Former President and Chief
Executive Officer of Aravive, Inc.
Age: 65
Director since 2020
Board Committees

Audit Committee

Mr. Shepard is an advisor at Caralys Pacific, a venture group focused on licensing drug programs and creating new companies in the U.S. and Japan. Mr. Shepard previously was president and chief executive officer of Aravive, Inc. (formerly Versartis, Inc.), a clinical-stage oncology company, from May 2015 to January 2020, when he retired. From 2013 to 2015, Mr. Shepard was executive chairman of Versartis, Inc.

From 2008 until May 2015, Mr. Shepard was an executive partner at Sofinnova Ventures, a venture capital firm focused on the healthcare industry. From 2010 to 2012, Mr. Shepard served as president and chief executive officer and was a member of the board of directors of NextWave Pharmaceuticals, Inc., a specialty pediatric pharmaceutical company. From 2005 to 2007, Mr. Shepard served as interim president and chief executive officer of Relypsa (Ilypsa, Inc.’s spin-out company, which was acquired by Galencia), a pharmaceutical company. Mr. Shepard was also vice president of commercial operations at Telik and oncology business unit head of Alza Pharmaceuticals (acquired by J&J).

Mr. Shepard has over 35 years of experience in the pharmaceutical, biotechnology and drug delivery arenas. Mr. Shepard has participated in or led over 16 product launches by preparing markets and establishing sales and marketing operations.

Mr. Shepard also currently serves on the board of directors of the following public companies: Inovio Pharmaceuticals, Inc. (Nasdaq: INO) and Esperion Therapeutics, Inc. (Nasdaq: ESPR). In addition, Mr. Shepard serves on the board of directors of Aculys Pharma, LLC, Cessation Therapeutics, Inc. and Pathalys Pharma, Inc. Mr. Shepard also serves as the chairman of the board of directors of the Christopher & Dana Reeve Foundation. Within the past five years, Mr. Shepard also served on the boards of directors of Marinus Pharmaceuticals, Inc. and Durect Corporation.

Mr. Shepard holds a B.S. in Business Administration from the University of Arizona.

Mr. Shepard brings deep expertise to our board of directors, as a recognized leader within the pharmaceutical industry, with nearly three decades of expertise as an accomplished public company CEO and senior executive.
 
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How We are Selected and Evaluated
We believe that our board of directors should be comprised of individuals with sophistication and experience in many substantive areas that will help us achieve our vision of becoming a leading U.S. GI healthcare company dedicated to advancing the treatment of GI diseases and redefining the standard of care for GI patients.
The core criteria that we use in evaluating each nominee to our board of directors consists of the following: (a) an owner oriented attitude and a commitment to represent the interests of our stockholders, demonstrated, in part, through ownership of our stock; (b) strong personal and professional ethics, integrity and values; (c) strong business acumen and savvy; (d) a deep, genuine passion for our business and the patients whom we serve; (e) demonstrated achievement in the nominee’s field of expertise; (f) the absence of conflicts of interest that would impair the nominee’s ability to represent the interests of our stockholders; (g) the ability to dedicate the time necessary to regularly participate in meetings of the board and committees of our board; and (h) the potential to contribute to the diversity of our board of directors, as a result of the nominee’s professional background, expertise, gender, age, ethnicity or other diversity criteria.
As illustrated in the matrix below, we believe our board of director nominees possess the professional and personal qualifications and necessary expertise both within and outside of the healthcare industry to maintain a diverse and experienced board of directors that can effectively represent stockholders.
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Broader Business
Healthcare Industry
Ironwood Board of Directors
Capital
Allocation /
Finance /

Accounting
Strategic
Transactions
Risk
Management
Human
Capital
Public
Company
Board
Senior
Leadership
(small
biotech)
Senior
Leadership
(large
pharma)
Customer /
Market Insights
(patient, payer,
physician)
Mark Currie, Ph.D.
Alexander Denner, Ph.D.
Andrew Dreyfus
Jon Duane
Marla Kessler
Thomas McCourt
Julie McHugh
Catherine Moukheibir
Jay Shepard
 
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Board Diversity
We believe our board of directors should be comprised of individuals reflecting the diversity represented by our employees and our patients. As mentioned above under How We are Selected and Evaluated, we have core criteria that we evaluate each board of director nominee on, including but not limited to, the potential to contribute to the diversity of our board of directors, as a result of the nominee’s professional background, expertise, gender, age, ethnicity or other diversity criteria. Three of our eleven current directors are women, one of whom self-identifies as Middle Eastern. The table below provides additional diversity information regarding our board of directors. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Listing Rule 5605(f).
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Board Diversity Matrix (as of April 27, 2023)
Board Size:
Total Number of Directors
9
Gender Identity:
Female
Male
Non-Binary
Did Not Disclose Gender
Directors
3
5
1
Demographic Background:
African American or Black
Alaskan Native or Native American
Asian
Hispanic or Latinx
Native Hawaiian or Pacific Islander
White
3
5
Two or More Races or Ethnicities
LGBTQ+
Did Not Disclose Demographic Background
1
Directors who self-identify as Middle Eastern: 1
Director Succession Planning
We refresh our board of directors and assess our board succession plans regularly. As of April 27, 2023, the average age of our independent directors was 61 years, and the average tenure of our independent directors was approximately 4.8 years.
Annual Evaluations
Our directors conduct annual evaluations to assess the performance and effectiveness of the board of directors and each committee in which they are a member. In addition, we ask each director to complete a self-evaluation as well as a peer evaluation of each other director. For 2022, directors completed written questionnaires which solicited open- ended and candid feedback on an anonymous basis, and each director was then provided with their individual evaluation. In addition to the director evaluations, we also solicit annual feedback from senior management concerning the board’s performance on an anonymous basis. After the collective board and committee evaluations and comments (including those from senior management) and the self and peer evaluations and comments were compiled, the
 
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chair of the governance and nominating committee met with our chair of the board and Thomas McCourt, our chief executive officer, to discuss the board and committee evaluations and individual evaluations for directors. The chair of the governance and nominating committee then provided the governance and nominating committee with a summary of the individual evaluations for all directors up for election at the 2023 annual meeting of stockholders. The chair of the governance and nominating committee then presented a summary of the collective board and committee evaluations and comments (including those from senior management) to the governance and nominating committee and full board of directors.
Director Nomination Process
Our governance and nominating committee identifies potential director candidates through referrals and recommendations, including from incumbent directors, management and stockholders, as well as through business and other organizational networks and relationships. We and our board of directors retain executive search firms and other third parties from time to time to assist in finding suitable candidates.
Stockholders who wish to recommend candidates may contact the governance and nominating committee in the manner described in Stockholder Communications, Proposals and Nominations for Directorships — Communications. Stockholder recommended candidates whose recommendations comply with these procedures will be evaluated by the governance and nominating committee in the same manner as candidates identified by the governance and nominating committee.
 
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How We are Organized and Governed
Corporate Governance Highlights
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Number of Independent Directors/Total Number of Directors
8/9
All Board Committees Comprised Solely of Independent Directors
Separate Independent Chair and Chief Executive Officer Positions
Regular Executive Sessions of Independent Directors
Annual Board, Committee, and Individual Director Self-assessments
Annual Election of All Directors
Annual Advisory Stockholder Vote on Executive Compensation
Stock Ownership Guidelines for Directors and Executive Officers
Comprehensive Code of Business Conduct and Ethics
Corporate Governance Guidelines
Prohibition of Hedging and Pledging by Executive Officers and Directors
Anti-Overboarding Policy Limiting the Number of Other Public Company Boards on which our Directors May Serve
Clawback Policy
Board Size and Terms
Our Eleventh Amended and Restated Certificate of Incorporation, as amended, or our Certificate of Incorporation, states that our board of directors shall consist of between one and 15 members, and the precise number of directors shall be fixed by a resolution of our board of directors. Our board of directors currently consists of nine members.
Each director holds office until his or her successor is duly elected and qualified or until his or her death, resignation or removal. Any vacancy on the board of directors, including a vacancy that results from an increase in the number of directors, may be filled by a vote of the majority of the directors then in office.
All of our directors are elected on an annual basis and can be removed with or without cause by our stockholders.
We separate the roles of chair of the board of directors and chief executive officer and rotate the chair approximately every five years, unless the governance and nominating committee recommends otherwise. Our board of directors believes that this structure enhances the board of directors’ oversight of, and independence from, management, and enables the board of directors to carry out its responsibilities on behalf of our stockholders. This leadership structure also allows our chief executive officer to focus his or her time and energy on operating and managing the company, while leveraging the experience and perspective of Ms. McHugh, the current chair of our board of directors. We expect the next chair rotation will take place in 2024.
Director Independence
Under Nasdaq Rule 5605, a majority of a listed company’s board of directors must be comprised of independent directors. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and governance and nominating committees be independent, and that audit and compensation committee members satisfy the additional independence criteria set forth in Rule 10A-3 and 10C-1, respectively, under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Under Nasdaq Rule 5605(a)(2), a director will
 
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only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Our board of directors determined that none of Messrs. Dreyfus, Duane and Shepard, Mses. Kessler, McHugh and Moukheibir, and Drs. Currie and Denner, representing eight of our nine directors, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under Nasdaq Rule 5605(a)(2). Mr. McCourt, our chief executive officer, was not determined to be independent due to his employment with the company. Our board of directors also determined that each of the current members of our audit committee, our governance and nominating committee, and our compensation and HR committee satisfies the independence standards for such committee established by Rule 10A-3 and 10C-1 under the Exchange Act, the SEC rules and the Nasdaq rules, as applicable. In making such determinations, our board of directors considered the information requested from and provided by each director concerning the director’s background, employment and affiliations, including family relationships, the relationships that each such non-employee director has with Ironwood and all other facts and circumstances the board of directors deemed relevant in assessing independence. As part of such determination, the board of directors considered the volume of business between BCBSMA, the company in which Mr. Dreyfus served as president and chief executive officer until December 2022, and Ironwood, which amounted to less than 1% of the annual revenues of BCBSMA in 2022, and Dr. Currie’s previous employment as our senior vice president, chief scientific officer and president of R&D until April 2019.
Risk Oversight
Our board of directors retains ultimate responsibility for risk oversight and our management team retains the responsibility for risk management. In carrying out its risk oversight responsibilities, our board of directors reviews the long- and short-term internal and external risks facing the company through its participation in long-range strategic planning, and the annual review and evaluation of corporate risks that the audit committee reports. Our board of directors also believes that separating the roles of chair of the board of directors and chief executive officer enhances the board of directors’ ability to oversee risk in an objective manner.
We have implemented and continue to refine a formalized enterprise risk management process. On an ongoing basis, we identify key risks, assess their potential impact and likelihood, and, where appropriate, implement operational measures and controls or purchase insurance coverage in order to help ensure adequate risk mitigation. Together with our board of directors, we continue to closely monitor the developments and impact of the COVID-19 pandemic on our business and operations, including employees, and work diligently to quickly address and mitigate risks in the evolving and dynamic environment.
On a quarterly basis, key risks, status of mitigation activities and potential new or emerging risks are reported to and discussed with senior management and further addressed with our audit committee and board of directors, as necessary. On at least an annual basis, a long-term comprehensive enterprise risk management update is provided to our board of directors. The long-term goal of our enterprise risk management process is to ingrain a culture of risk awareness and mitigation throughout the organization that can be applied to our current business activities as well as our assessment and pursuit of future business opportunities.
As set forth in its charter, our audit committee discusses with management any significant risks or exposures facing Ironwood, evaluates the steps management has taken or proposes to take to mitigate such risks and reviews our compliance with such mitigation plans. As part of fulfilling these responsibilities, the audit committee meets regularly with Ernst & Young LLP, our independent registered public accounting firm, and members of our management, including our chief executive officer and chief financial officer. Our audit committee also discusses with Ernst & Young LLP any significant risks or exposures facing the company to the extent that such risks or exposures relate to accounting and financial reporting and reviews related mitigation plans with Ernst & Young LLP. In addition, our audit committee reviews the risk factors as presented in our annual reports on Form 10-K and our quarterly reports on Form 10-Q, as applicable, that we file with the SEC.
 
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As part of our board of directors’ risk oversight role, our compensation and HR committee reviews and evaluates the risks associated with our compensation programs and succession plans. The compensation and HR committee also is responsible under its charter for approving the compensation of all of our executive officers (other than our chief executive officer), recommending chief executive officer compensation to our board of directors for approval and overseeing the maintenance and presentation to our board of directors of succession plans for members of our senior management. Likewise, our governance and nominating committee is responsible for evaluating the performance, operations and composition of our board of directors and the sufficiency of our corporate governance guidelines, either of which may impact our risk profile from a governance perspective.
In performing their risk oversight functions, each committee of our board of directors has full access to management, as well as the ability to engage outside advisors.
Hedging and Pledging Policy
As part of our insider trading prevention policy, our directors and executive officers are prohibited from engaging in any hedging or monetization transactions of our company securities, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. In addition, our insider trading prevention policy generally prohibits our directors and executive officers from holding company securities in a margin account or pledging company securities as collateral for a loan.
Corporate Governance Guidelines
We have adopted corporate governance guidelines which are accessible through the Investors section of our website at www.ironwoodpharma.com, under the heading Corporate Governance — Governance Documents, and which are available in print to any stockholder who requests them from our secretary. Our board of directors believes that sound governance practices and policies provide an important framework to assist it in fulfilling its duties to stockholders and relies on these guidelines to provide that framework. The guidelines help to ensure that our board of directors is independent from management, that our board of directors adequately performs its oversight functions and that the interests of our board of directors and management align with the interests of our stockholders. Among other things, our corporate governance guidelines limit the number of other public company boards on which our directors may serve. Accordingly, our directors should not serve on more than four public company boards of directors, including Ironwood. In addition, our directors who hold the position of chief executive officer of a public company should not serve on more than three public companies, including Ironwood and the board of his or her own company. Our governance and nominating committee conducts an annual review of director commitment levels, and affirms that as of March 31, 2023, all directors were in compliance with our corporate governance guidelines.
Diversity, Equity and Inclusion (DE&I)
Creating a diverse, equitable and inclusive culture is essential to attracting, motivating and retaining the talent necessary to deliver on our corporate mission. To establish and maintain this culture, we have a simple vision in mind: to make Ironwood an environment rooted in valuing each employee for who they are.
This begins with ensuring our workforce represents the diverse populations we serve and reflecting our DE&I principles in our employee-related training and policies. As of December 31, 2022, women represented approximately 52% of our employee base, 27% of our leadership team (vice president and above) and 33% of our board of directors (including our board and audit committee chairs). Additionally, as of December 31, 2022, approximately 18% of our employees were racially or ethnically diverse and in 2022, approximately 28% of our new hires were racially or ethnically diverse. Our DE&I principles are also reflected in our employee training and policies.
We are focused on fostering an environment where employees feel included and empowered. This approach includes DE&I initiatives such as learning and development opportunities, strengthened talent acquisition strategies, the support of equality programs in our local communities, and a renewed focus on retention and career advancement of diverse populations. We are also proud to have five strong and growing DE&I employee resource groups: (1) W@IRWD (Women at Ironwood), designed to empower, develop, and sponsor women at Ironwood, (2) ISHINE, which draws undergraduate candidates from Historically Black Colleges and Universities and exposes students to careers in the healthcare field,
 
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(3) ISTAR (Ironwood Stands Together Against Racism), which was created in response to racial equality movements and our employees’ drive to take action, (4) PRIDE@IRWD, which seeks to foster LGBTQ+ visibility for all Ironwood employees and raise awareness about the current workplace and social issues that affect the LGBTQ+ community, and (5) IMPACT, which offers a space for bettering our communities and engaging deeper with one another.
In 2022, we continued to advance our DE&I initiatives with strong advocacy from our leadership team and board of directors.
We are committed to furthering our DE&I efforts consistent with our long-term DE&I strategy we adopted in 2020, including by incorporating a DE&I scorecard reflecting ten measurable objectives into our corporate goals. As in prior years, our board of directors has again approved a specific DE&I corporate goal for 2023 of achieving at least six out of the ten pre-determined objectives on the company’s 2023 DE&I scorecard.
Board Meetings
Our board of directors held five meetings during 2022. As stated in our corporate governance guidelines, we expect our directors to rigorously prepare for, attend and participate in all board and applicable committee meetings. Each director is expected to ensure that other existing and planned future commitments do not materially interfere with his or her service as a director. We also expect that all of our directors will attend our annual meeting of stockholders unless a director will not be continuing to serve on the board following such annual meeting. In 2022, each incumbent director attended at least 75% of all meetings of the board of directors and all committees of the board of directors on which he or she served that were held during the period that such director was a member of the board of directors or the applicable committee. All nine directors at the time of our 2022 annual meeting of stockholders were present at the meeting.
Committees
Our board of directors has established three standing committees: an audit committee, a governance and nominating committee and a compensation and HR committee. Each of the audit committee, the governance and nominating committee and the compensation and HR committee operates under a charter approved by our board of directors. Copies of each charter are accessible through the Investors section of our website at www.ironwoodpharma.com, under the heading Corporate Governance — Governance Documents, and are available in print to any stockholder who requests them from our secretary. The chair of each of our committees is expected to rotate approximately every three to five years, unless the governance and nominating committee recommends otherwise.
Audit Committee
We have a separately designated standing audit committee established by our board of directors for the purpose of overseeing our accounting and financial reporting processes and audits of our financial statements. The members of our audit committee are Mses. Moukheibir and McHugh and Mr. Shepard.
Ms. Moukheibir chairs the audit committee, and our board of directors has determined that Ms. Moukheibir is an audit committee financial expert, as defined in Item 407(d)(5) of Regulation S-K. Our audit committee met four times during 2022. Our audit committee assists our board of directors in its oversight of significant risks facing Ironwood, the integrity of our financial statements and our independent registered public accounting firm’s qualifications, independence and performance.
Our audit committee’s responsibilities include:

reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements, earnings releases and related disclosures;

reviewing and discussing with management and our independent registered public accounting firm and, as needed, internal auditors or any relevant third party, the quality and adequacy of our internal controls and internal auditing procedures, including any material weaknesses or significant deficiencies;

discussing our accounting policies and all material correcting adjustments with our management and our independent registered public accounting firm;
 
18   Ironwood

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discussing with our management any significant risks or exposures facing the company and the related mitigation plans, and discussing with our independent registered public accounting firm any significant risks or exposures facing the company to the extent that such risks or exposures relate to accounting and financial reporting and related mitigation plans;

monitoring our internal control over financial reporting and disclosure controls and procedures;

working with management to formulate a mitigation plan and reviewing the company’s compliance with such mitigation plan in the event of a significant breakdown or security breach affecting the information technology systems of the company or a third party;

appointing, retaining, evaluating, overseeing, and approving the compensation for and, when necessary, terminating our independent registered public accounting firm;

approving all audit services and all permitted non-audit, tax and other services to be performed by our independent registered public accounting firm, in each case, in accordance with the audit committee’s pre-approval policy;

discussing with the independent registered public accounting firm its independence and ensuring that it receives the written disclosures regarding these communications required by the Public Company Accounting Oversight Board, or PCAOB;

reviewing with the independent registered public accounting firm, to the extent applicable, any matter arising from the audit of the financial statements that was communicated or required to be communicated that both relates to accounts or disclosures that are material to the financial statements and involves especially challenging, subjective or complex auditor judgment;

reviewing and approving all transactions or series of similar transactions to which we were or are a party in which the amount involved exceeded or exceeds $120,000 and in which any of our directors, executive officers, holders of more than 5% of any class of our voting securities, or any member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest, other than compensation arrangements with directors and executive officers;

recommending whether the audited financial statements should be included in our annual report and preparing the audit committee report required by SEC rules;

reviewing with our independent registered public accounting firm all material communications between our management and our independent registered public accounting firm;

reviewing, updating and recommending to our board of directors approval of our code of business conduct and ethics; and

establishing procedures for the receipt, retention, investigation and treatment of accounting related complaints and concerns.
 
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Audit Committee Report
In the course of our oversight of Ironwood’s financial reporting process, we have (i) reviewed and discussed with management the company’s audited financial statements for the fiscal year ended December 31, 2022, (ii) discussed with Ernst & Young LLP, the company’s independent registered public accounting firm, the matters required to be discussed by the applicable requirements of the PCAOB and the SEC, and (iii) received the written disclosures and the letter from Ernst & Young LLP, the company’s independent registered public accounting firm, required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with us concerning independence, discussed with the independent registered public accounting firm its independence, and considered whether the provision of non-audit services by the independent registered public accounting firm is compatible with maintaining its independence.
Based on the foregoing review and discussions, we recommended to the board of directors of the company that the audited financial statements be included in the company’s Annual Report on Form 10-K for the year ended December 31, 2022 for filing with the SEC.
By the Audit Committee,
Catherine Moukheibir, Chair
Julie McHugh
Jay Shepard
 
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Governance and Nominating Committee
The members of our governance and nominating committee are Dr. Denner, Mr. Duane and Ms. McHugh. Dr. Denner chairs the governance and nominating committee. Our governance and nominating committee met three times during 2022.
Our governance and nominating committee’s responsibilities include:

assisting our board of directors in identifying and recruiting individuals qualified to become members of our board of directors;

recommending to our board of directors the persons to be nominated for election as directors;

recommending to our board of directors qualified individuals to serve as committee members;

performing an annual evaluation of our board of directors and each committee of the board of directors;

evaluating the need and, if necessary, creating a plan for the continuing education of our directors;

assessing and reviewing our corporate governance guidelines and recommending any changes to our board of directors;

considering any potential conflicts of interest of members of our board of directors;

considering our policies with respect to their impact on significant issues of corporate social responsibility; and

evaluating and approving any requests from our executives to serve on the board of directors of another for- profit company.
Compensation and HR Committee
The members of our compensation and HR committee are Dr. Currie, Messrs. Dreyfus and Duane and Ms. Kessler. Mr. Dreyfus chairs our compensation and HR committee. Our compensation and HR committee met six times during 2022. Our compensation and HR committee assists our board of directors in fulfilling its responsibilities relating to the compensation of our board of directors and our executive officers, and oversees matters related to human capital management, including DE&I, workplace environment and culture and talent development and retention.
Our compensation and HR committee’s responsibilities include:

evaluating the performance of our chief executive officer and other executive officers in light of pre-determined corporate goals and objectives relevant to the chief executive officer’s or such executive officer’s compensation;

reviewing and recommending to the board our chief executive officer’s compensation including salary, bonus and incentive compensation, deferred compensation, perquisites, equity compensation, benefits provided upon retirement, severance or other termination of employment, and any other forms of executive compensation;

reviewing and approving executive officer compensation (other than for the chief executive officer), including salary, bonus and incentive compensation, deferred compensation, perquisites, equity compensation, benefits provided upon retirement, severance or other termination of employment, and any other forms of executive compensation;

reviewing and approving our peer companies to evaluate our compensation competitiveness and mix of compensation elements;

overseeing and administering our incentive compensation plans and equity-based plans and recommending the adoption of new incentive compensation plans and equity-based plans to our board of directors;

reviewing, accessing and making recommendations to our board of directors with respect to director compensation and any stock ownership guidelines applicable to non-employee directors;

reviewing, approving and overseeing any stock ownership guidelines applicable to executive officers;
 
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reviewing and discussing with management the compensation discussion and analysis required to be included in our filings with the SEC and recommending whether the compensation discussion and analysis should be included in such filings;

preparing the compensation and HR committee report required by the SEC;

making recommendations to our board of directors with respect to management succession planning, including planning with respect to our chief executive officer;

overseeing compliance with applicable laws and regulations affecting employee compensation and benefits, including regarding stockholder approval of certain executive compensation matters;

reviewing the risks associated with our compensation policies and practices; and

overseeing the company’s strategies and policies related to human capital management, including with respect to matters such as DE&I, workplace environment and culture, and talent development and retention.
Compensation Committee Interlocks and Insider Participation
None of the members of our compensation and HR committee is or has at any time during the past fiscal year been an officer or employee of Ironwood. None of our executive officers serve, or in the past fiscal year has served, as a member of the board of directors or compensation and HR committee of any other entity that has one or more executive officers serving as a member of our board of directors or compensation and HR committee. None of the members of our compensation and HR committee had any relationship with us that requires disclosure under any paragraph of Item 404 of Regulation S-K under the Exchange Act.
How Our Board is Paid
Under our amended and restated 2019 non-employee director compensation policy, effective January 1, 2023, or the director compensation policy, the majority of the compensation that our non-employee directors receive for service on our board of directors is paid in the form of restricted shares of our Class A common stock. Vesting of these shares of restricted stock is contingent on each non-employee director continuing to serve as a member of the board of directors on the last day of each applicable vesting period. If a director ceases serving as a member of our board of directors at any time during the vesting period of a restricted stock award, or RSA, unvested shares will be forfeited on the date of such director’s termination of service. Shares of restricted stock granted to directors in 2022 under our director compensation policy were granted under our 2019 Equity Incentive Plan, or our 2019 Plan. Under our 2019 Plan, the aggregate value of all compensation paid or granted to any non-employee director for his or her service as a director in any calendar year may not exceed $600,000.
Under our director compensation policy, at each annual meeting of stockholders, our non-employee directors are granted restricted shares of our Class A common stock, with the number of shares subject to the award equal to $250,000 divided by the average closing price of our Class A common stock on the Nasdaq Global Select Market (or the stock exchange on which our stock is being actively traded) for the six months preceding the month in which the award is granted, rounded down to the nearest whole share. Such restricted shares vest in full on the date immediately preceding the date of the next annual meeting of stockholders.
Each non-employee director who is first elected to our board of directors will, upon his or her initial election, be granted restricted shares of our Class A common stock, with the number of shares subject to the award equal to $250,000 divided by the average closing price of our Class A common stock on the Nasdaq Global Select Market (or the stock exchange on which our stock is being actively traded) for the six months preceding the month in which the award is granted, rounded down to the nearest whole share. Such restricted shares vest in three equal installments on the first three anniversaries of the grant date. In addition, under our director compensation policy, if a non-employee director is elected other than at an annual meeting of our stockholders, then upon his or her initial election to our board of directors, such director will be granted the number of restricted shares of our Class A
 
22   Ironwood

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common stock granted to non-employee directors at the most recent annual meeting of our stockholders, prorated based on the number of days between the last annual meeting of our stockholders and the date on which the non- employee director began service with us. Such restricted shares will vest in full on the date immediately preceding the date of the next annual meeting of stockholders.
In addition to equity grants, each non-employee director receives an annual retainer under our director compensation policy for his or her service on our board of directors, as well as additional fees for board chair, committee or committee chair service as follows:
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Fees
Annual retainer for members of the board of directors $50,000 ($80,000 for the chair)
Additional annual retainer for members of the audit committee $10,000 ($20,000 for the chair)
Additional annual retainer for members of the compensation and HR committee $10,000 ($20,000 for the chair)
Additional annual retainer for members of the governance and nominating committee $5,000 ($10,000 for the chair)
All cash fees are payable quarterly in arrears and will be prorated for any quarter of partial service. Each non-employee director may elect, prior to January 1 of the year with respect to which such election will be effective, to receive fully vested shares of our Class A common stock at no cost in lieu of his or her annual cash retainer and any additional cash retainers for board chair, committee or committee chair service set forth above. The number of shares of our Class A common stock issued is determined by dividing the applicable cash retainer(s) the director would be eligible to receive by the closing price of our Class A common stock on the Nasdaq Global Select Market (or the stock exchange on which our stock is being actively traded) on the date the cash fees would otherwise be paid, rounded down to the nearest whole share. Further, non-employee directors are reimbursed for reasonable travel and other expenses incurred in connection with attending meetings of the board of directors and its committees.
 
2023 Proxy Statement   23

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Director Compensation Table
The following table sets forth information regarding the compensation earned during the year ended December 31, 2022 by each of our directors who served in 2022, other than Mr. McCourt, who does not receive compensation for his service on our board of directors. Dr. Olanoff and Mr. Owens were not nominated for election at the 2022 annual meeting of stockholders.
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Name
Fees Earned or
Paid in
Cash ($)
Stock Awards
($)(1)
All Other
Compensation
($)
Total
($)
Mark Currie, Ph.D.
$ 54,368 $ 242,027 $ 296,395
Alexander Denner, Ph.D.
$ 57,875(2) $ 242,027 $ 299,902
Andrew Dreyfus
$ 65,000 $ 242,027 $ 307,027
Jon Duane
$ 62,500 $ 242,027 $ 304,527
Marla Kessler
$ 57,500 $ 242,027 $ 299,527
Julie McHugh
$ 95,000 $ 242,027 $ 337,027
Catherine Moukheibir
$ 69,989(3) $ 242,027 $ 312,016
Lawrence Olanoff, M.D., Ph.D.
$ 25,055 $ 750(4) $ 25,805
Edward Owens
$ 25,055 $ 25,055
Jay Shepard
$ 60,000 $ 242,027 $ 302,027
(1)
On June 1, 2022, each non-employee member of our board of directors received a restricted stock grant in the amount of 21,571 shares of our Class A common stock for service on our board of directors from the date of our 2022 annual meeting of stockholders to the date of our 2023 annual meeting of stockholders, which shares will vest in full on the date immediately preceding the date of our 2023 annual meeting of stockholders, subject to continued service on our board as of the vesting date. The number of shares subject to the restricted stock grant was determined by dividing (i) $250,000 by (ii) $11.59, which was the average closing price of our Class A common stock on the Nasdaq Global Select Market for the six months preceding the month of the 2022 annual meeting of stockholders. Each such award of restricted stock had a grant date fair value of $11.22 per share and was granted pursuant to the terms of our director compensation policy and our 2019 Plan. As of December 31, 2022, each non-employee director other than Dr. Denner and Mr. Shepard held 21,571 restricted shares of Class A common stock as a result of this grant and held no other unvested equity awards. As of December 31, 2022, Dr. Denner and Mr. Shepard held 29,879 restricted shares and 29,813 restricted shares, respectively, of Class A common stock as a result of this and other previously issued grants. Dr. Olanoff and Mr. Owens did not receive a restricted stock grant on June 1, 2022, as they were not nominated for election at the 2022 annual meeting of stockholders. Neither Dr. Olanoff nor Mr. Owens held any restricted shares of Class A common stock as of December 31, 2022.
Amounts in the table represent the fair value of these restricted stock grants on the date of grant calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation, or ASC 718. For a discussion of the assumptions used in the valuation of awards made in 2022, see Note 12 to our consolidated financial statements for the year ended December 31, 2022 included in our Annual Report on Form 10-K that we filed with the SEC on February 16, 2023. All values reported exclude the effects of potential forfeitures.
(2)
Dr. Denner elected to receive this annual retainer in unrestricted shares of our Class A common stock. Dr. Denner received a total of 4,992 shares of our Class A common stock for such service in 2022.
(3)
Ms. Moukheibir elected to receive this annual retainer in unrestricted shares of our Class A common stock through March 31, 2022. Ms. Moukheibir elected to receive this annual retainer in cash from April 1, 2022 through December 31, 2022. Ms. Moukheibir received a total of 1,466 shares of our Class A common stock for such service in 2022.
(4)
On June 1, 2022, Dr. Olanoff’s term as a member of our board of directors ended. In September 2022, the Company and Dr. Olanoff entered into a consulting arrangement, pursuant to which he agreed to provide consultancy services to the Company related to research and development matters in exchange for a consultancy fee calculated at the rate of $750 per hour, for up to 40 hours of service. Following Dr. Olanoff’s transition from our board of directors, he provided one hour of service in 2022 and his “All Other Compensation” includes those fees earned in 2022.
 
24   Ironwood

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Director Stock Ownership Guidelines
We have instituted stock ownership guidelines as part of our director compensation policy that provide that each non-employee director must accumulate and continuously hold shares of our Class A common stock with a value equal to or greater than three times the amount of the then-current annual retainer paid to the non-employee director for service on our board of directors (excluding any additional board chair, committee, or committee chair retainers). Non-employee directors were required to achieve this level of ownership by the later of (a) January 1, 2023 (two years from the effective date of the amended and restated director compensation policy) and (b) two years from the date the individual began service with us, or the Ownership Date.
Compliance with the stock ownership requirements is measured on the date of the annual meeting of stockholders based on the annual retainer then in effect. Following the Ownership Date, until a non-employee director holds the required ownership level (or if such director does not hold the number of shares of our Class A common stock to meet the stock ownership requirements at any time thereafter), such director will be required to retain 100% of any shares of our Class A common stock held or received upon the vesting or settlement of equity awards or the exercise of stock options, in each case, net of shares sold to cover applicable taxes and the payment of any exercise or purchase price (if applicable). Further, following the Ownership Date, to the extent a non-employee director does not hold the number of shares of our Class A common stock that meets this threshold, such director will be automatically deemed to have elected to receive any cash retainer for service on our board of directors or a committee thereof in the form of shares of our Class A common stock in an amount that satisfies the threshold shortfall. As of March 31, 2023, each of our non-employee directors was in compliance with our stock ownership guidelines.
We believe our stock ownership guidelines ensure that the interests of our directors, each of whom has equity in the business, are aligned with those of our stockholders and further focus our directors on maximizing long-term value.
 
2023 Proxy Statement   25

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Proposal No. 1
Election
of Directors
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OUR BOARD RECOMMENDS
THAT YOU VOTE FOR
EACH OF THE DIRECTORS
UP FOR ELECTION
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Proposal No. 1
Our board of directors has nominated all of our nine current directors — Drs. Currie and Denner, Messrs. Dreyfus, Duane, McCourt and Shepard and Mses. Kessler, McHugh and Moukheibir — for election at the 2023 annual meeting of stockholders. Each of Drs. Currie and Denner, Messrs. Dreyfus, Duane, McCourt and Shepard and Mses. Kessler, McHugh and Moukheibir has indicated his or her willingness to serve if elected and has consented to be named in the proxy statement. Should any nominee become unavailable for election at the annual meeting, the persons named on the enclosed proxy card as proxy holders may vote all proxies given in response to this solicitation for the election of a substitute nominee chosen by our board of directors.
Vote Required
The election of the board of director nominees will be determined by a plurality of the votes cast, meaning that board of director nominees with the greatest number of votes cast for election, even if less than a majority, will be elected as directors to serve for one year and until his or her successor is duly elected and qualified or until their death, resignation or removal. Because there is no minimum vote required, abstentions and broker non-votes will not affect the outcome of this proposal.
 
2023 Proxy Statement   27

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Our Executives
Who We Are
The following table sets forth certain information, as of April 27, 2023, with respect to each of our executive officers, other than Mr. McCourt, whose biographical information is included elsewhere in this proxy statement under the caption Our Board of Directors:
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Name
Age
Position(s)
Andrew Davis
37
Senior Vice President, Chief Business Officer
Sravan Emany
45
Senior Vice President, Chief Financial Officer
John Minardo
48
Senior Vice President, Chief Legal Officer and Secretary
Jason Rickard
52
Senior Vice President, Chief Operating Officer
Michael Shetzline, M.D., Ph.D.
64
Senior Vice President, Chief Medical Officer and Head of Research and Drug Development
ANDREW DAVIS
Senior Vice President, Chief
Business Officer of Ironwood
Pharmaceuticals, Inc.
Age: 37
Joined Ironwood 2021

Andrew Davis has served as our chief business officer since December 2021 and previously served as senior vice president of business development from May 2021 to July 2021 and as senior vice president corporate development, strategy, and valuation from July 2021 to December 2021.

Before joining Ironwood, Mr. Davis served as the chief business development and M&A officer at iNova Pharmaceuticals from September 2017 to May 2021, leading all company transactions and acting as a member of the executive management team. Prior to iNova, Mr. Davis was head of oncology business development for Merck & Co. from November 2016 to September 2017. Before his time at Merck, Mr. Davis was at Bausch Health Companies (formerly Valeant Pharmaceuticals), where he held roles of increasing responsibility within the business development function, ultimately serving as senior vice president of business development and leading all transactions for the company, including the acquisitions of Salix Pharmaceuticals and Bausch + Lomb. Mr. Davis began his career as an analyst at McKinsey & Co., where his work focused on the healthcare space.

Mr. Davis serves on the board of directors of UTILITY therapeutics Ltd.

Mr. Davis holds a B.A. in economics from Boston University.
 
28   Ironwood

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SRAVAN EMANY
Senior Vice President, Chief Financial Officer of Ironwood Pharmaceuticals, Inc.
Age: 45
Joined Ironwood 2021

Mr. Emany has served as our chief financial officer since December 2021.

Prior to joining Ironwood, Mr. Emany served as corporate vice president, commercial excellence and chief strategy officer of Integra LifeSciences Holdings Corporation, a publicly held global healthcare company, since March 2020 and as vice president of strategy, treasury and investor relations from February 2018 to March 2020. Prior to that, Mr. Emany served in various mergers and acquisitions investment banking roles at Bank of America and BofA Securities (formerly Bank of America Merrill Lynch) from September 2008 to February 2018, culminating in his service as managing director in the mergers and acquisitions group where he led numerous mergers and acquisitions in the healthcare sector. Mr. Emany also served in various other financial roles, including with Goldman Sachs Group and Morgan Stanley.

Mr. Emany holds a B.A. in international relations from The Johns Hopkins University and an M.A. in international relations and international economics from The Johns Hopkins School of Advanced International Studies.
JOHN MINARDO
Senior Vice President, Chief Legal Officer and Secretary of Ironwood Pharmaceuticals, Inc.
Age: 48
Joined Ironwood 2021

Mr. Minardo has served as our chief legal officer since August 2021.

Prior to joining Ironwood, Mr. Minardo was with Seqirus, a pharmaceutical company, where he was vice president, general counsel and a member of the Seqirus executive leadership team, leading a global legal team overseeing activities including business transactions, regulatory matters, corporate governance, compliance and intellectual property from November 2015 to July 2021. Prior to Seqirus, Mr. Minardo was with Novartis in increasing roles of responsibility from October 2007 to November 2015, ultimately serving as vice president, general counsel and chief compliance officer at Novartis Influenza Vaccines. Mr. Minardo started his legal career as a litigator at Kaye Scholer LLP.

Mr. Minardo holds a B.A. from Boston College and a J.D. from Brooklyn Law School.
 
2023 Proxy Statement   29

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JASON RICKARD
Senior Vice President, Chief Operating Officer of Ironwood Pharmaceuticals, Inc.
Age: 52
Joined Ironwood 2012

Mr. Rickard has served as our chief operating officer since April 2020. Mr. Rickard was also designated by our board of directors as our principal financial officer from July 2021 to December 2021. Prior to his appointment as the company’s senior vice president, chief operating officer, Mr. Rickard had been the company’s senior vice president, operations since July 2018, in which capacity he led the company’s manufacturing, pharmaceutical development, quality, human resources, information technology and facilities functions. Before becoming senior vice president, operations, Mr. Rickard served as the company’s vice president global operations and information technology from July 2015 to July 2018; vice president global operations from 2014 to July 2015; vice president commercial manufacturing supply chain from 2013 to 2014; and head of supply chain from 2012 to 2013. On April 10, 2023, the Company determined to eliminate the role of chief operating officer, and, as result, Mr. Rickard’s last day of employment with the Company will be May 12, 2023.

Prior to joining Ironwood, Mr. Rickard was with Genentech, Inc. from 2000 to 2012 in roles of increasing responsibility in manufacturing and supply chain. Mr. Rickard began his career as a mechanical engineer at AMOT Controls Corporation.

Mr. Rickard holds an M.S. from California State University — Sacramento and a B.S. from California State University — Chico, both in mechanical engineering.
MICHAEL
SHETZLINE,
M.D., Ph.D.
Senior Vice President, Chief Medical
Officer and Head of Research and Drug Development of Ironwood
Pharmaceuticals, Inc.
Age: 64
Joined Ironwood 2019

Dr. Shetzline has served as our chief medical officer, and head of research and drug development since October 2021 and had served as chief medical officer, and head of drug development from January 2019 to October 2021. Dr. Shetzline is a gastroenterologist and internist, with more than 25 years of experience in the biopharmaceutical industry and academia.

Before joining Ironwood, Dr. Shetzline was vice president and head of gastroenterology clinical sciences at Takeda Pharmaceuticals International Co., or Takeda, a global pharmaceutical company, where he led global clinical development for all GI assets from January 2015 to January 2019.

Prior to Dr. Shetzline’s role at Takeda, Dr. Shetzline served as vice president and global head of gastroenterology at Ferring International Pharmascience Center U.S., Inc., or Ferring, from 2012 to January 2015, during which he led Ferring’s clinical development programs in gastroenterology. Before that, Dr. Shetzline was vice president and global program head crossing multiple therapeutic areas and head of translational medicine GI discovery at Novartis Pharmaceuticals AG from 2002 to 2012.

Dr. Shetzline also served as gastroenterology program director and assistant professor of medicine at Duke University Medical Center from 1997 to 2002. Dr. Shetzline has published over 40 full papers and book chapters and acted as a reviewer for a range of medicine journals.

Dr. Shetzline earned his M.D. and Ph.D. from The Ohio State University in physiology and medicine. Dr. Shetzline completed his internal medicine residency and fellowship in gastroenterology and served on the faculty as a National Institutes of Health supported physician scientist at Duke University Medical Center.

Dr. Shetzline is a Fellow of the American College of Physicians, the American College of Gastroenterology, and the American Gastroenterological Association and certified by the American Board of Internal Medicine.
 
30   Ironwood

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Executive Compensation
Compensation Discussion and Analysis
Executive Summary
Our executive compensation program for 2022 remained aligned with market practice and our corporate performance, which created a strong link between the value of our executives’ compensation to our stockholders’ returns. Together with this objective, our compensation program is also designed to attract, retain, motivate and reward outstanding talent across Ironwood through well-communicated programs that are aligned with our vision and mission, and support a positive company culture and values. The three primary elements of our executive officer compensation program are base salary, cash bonus and long-term equity incentive compensation. Long-term equity incentive compensation, which includes a balanced mix of time-based and performance-based equity awards, represents a significant percentage of each named executive officer’s total direct compensation. We believe this emphasis on equity strongly reinforces the concept of pay-for-performance, as the single largest component of pay is tied to future increases in the value of our stock.
The majority of total compensation for our named executive officers during 2022 consisted of variable pay elements, as reported in the Summary Compensation Table included elsewhere in this proxy statement. We believe this allocation aligns with our pay-for-performance compensation philosophy of motivating our named executive officers to achieve our performance objectives in the short term and to grow the business to create sustainable value for our shareholders in the long term.   
2022 CEO Compensation
2022 Other NEOs Compensation(1)
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(1)
As further described in this Compensation Discussion and Analysis section, Sravan Emany was not eligible for time-based and performance-based awards in 2022 due to the fact that he joined the company in December 2021, and therefore this compensation element was excluded for Mr. Emany for the purposes of this chart presentation.
 
2023 Proxy Statement   31

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Stockholder Engagement and Say-On-Pay Vote Consideration
Feedback from stockholders is an essential part of our executive compensation decision-making process. We value stockholders’ perspectives and have a regular process throughout the year to discuss a range of topics, including our strategy, operations, financial and business performance. Discussions with our stockholders assist us in setting goals and expectations for our performance and facilitate the identification of emerging issues that may affect our strategies, corporate governance, compensation practices, and other aspects of our operations. Our company engages with many of our largest stockholders on a frequent basis year-round. This includes investor conferences, investor events, and one-on-one discussions. We invite feedback on a wide variety of topics, including corporate strategy, capital allocation, governance, human capital management and executive compensation.
Our stockholders also have the opportunity to cast a non-binding advisory vote on named executive officer compensation, or a “say-on-pay” vote, and this year, also to express their preference for the frequency of future say-on-pay votes. This allows our stockholders to provide us with regular, timely and direct input on our executive compensation philosophy, policies and practices. We believe this enables us to further align our compensation programs with our stockholders’ interests and to enhance our ability to consider stockholder feedback as part of our annual compensation review process. We sought stockholder input on our executive compensation program through the say-on-pay vote at our 2022 annual meeting of stockholders and approximately 97% of votes cast by our stockholders voted in support of our named executive officer compensation. In addition, the last time we sought stockholder input with respect to the say-on-pay frequency vote was at our 2017 annual meeting of stockholders, and over 98% of votes cast by our stockholders voted in support of an annual advisory say-on-pay vote.
Named Executive Officers: Goals and Accomplishments
Named Executive Officers for 2022
This section discusses the principles underlying our policies and decisions with respect to the compensation of our executive officers who are named in the Summary Compensation Table, or our named executive officers. Provided below are material factors we believe are relevant to an analysis of these policies and decisions. Our named executive officers for 2022 were:

Thomas McCourt, chief executive officer;

Sravan Emany, senior vice president, chief financial officer;

John Minardo, senior vice president, chief legal officer and secretary;

Jason Rickard, senior vice president, chief operating officer(1); and

Michael Shetzline, M.D., Ph.D., senior vice president, chief medical officer and head of research and drug development.
Goals and Accomplishments
In December 2021, our board, with input from senior management, established corporate performance goals for 2022, the achievement of which we believed would further the accomplishment of our short- and long-term business plan. These goals included maximizing LINZESS net sales growth as well as the attainment of certain financial and pipeline targets, in each case, based on the Company’s board-approved operating plan for 2022. In February 2022, our compensation and HR committee approved the relative weighting of our corporate performance goals for 2022 compensation programs.
(1)
On April 10, 2023, the Company determined to eliminate the role of chief operating officer, and, as result, Mr. Rickard’s last day of employment with the Company will be May 12, 2023. The responsibilities of the chief operating officer will be distributed to other members of the leadership team with support from Mr. Rickard to provide a smooth transition. Mr. Rickard’s role elimination is not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
 
32   Ironwood

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Our named executive officers were evaluated based on the level of achievement of the 2022 corporate goals and their achievements against their 2022 individual goals. Performance measured against the 2022 corporate and individual goals (as applicable) was used, in part, in determining salary adjustments and cash bonus awards for our named executive officers in early 2023.
As described in more detail elsewhere in this proxy statement under Compensation Determination Process, our board is responsible for assessing the Company’s performance against its pre-determined corporate goals. In January 2023, our board determined that the 2022 company performance achievement multiplier, which was used as a key consideration in determining executive compensation awarded for 2022 performance, was 75%.
The level of achievement against our 2022 corporate performance goals, as determined by our board in early 2023, was as follows:
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Performance Targets (Weights)
Company Goal
Not
Achieved
Partially
Achieved
Target
Over
Achieved
Results
MAXIMIZE LINZESS
LINZESS U.S. Net Sales
$1,009M
$1,016M
$1,040M
$>1,056M
$1,002M(1)
(0%)
(20%)
(30%)
(40%)
(0%)
Advance Linaclotide Pediatric Program
Specific goals are not disclosed for
competitive reasons
Above Target(2)
(0%)
(3%)
(5%)
(10%)
(10%)
BUILD INNOVATIVE PIPELINE
Secure 1 asset aligned with prioritized criteria
Specific goals are not disclosed for
competitive reasons
Below Target(3)
(0%)
(10%)
(15%)
(20%)
(10%)
Initiate IW-3300 POC study in IC / BPS by the fourth quarter of 2022
Specific goals are not disclosed for
competitive reasons
Below Target(4)
(0%)
(5%)
(8%)
(11%)
(0%)
Advance CNP-104 study
Specific goals are not disclosed for
competitive reasons
Below Target(5)
(0%)
(6%)
(10%)
(16%)
(0%)
STRENGTHEN FINANCIAL PROFILE
Revenue
$414M
$420M
$425M
$>430M
$411M(6)
(0%)
(3%)
(5%)
(7%)
(0%)
Adjusted EBITDA from organic business (excluding the impact of any corporate development transactions)
$234M
$235M
$250M
$>275M
$252M(7)
(0%)
(10%)
(20%)
(25%)
(20%)
CREATE GREAT PLACE TO WORK
Achieve at least 7 out of 10 objectives on the corporate EDI scorecard
5/10
6/10
7/10
10/10
7/10(8)
(0%)
(1%)
(2%)
(5%)
(2%)
Increase understanding of and confidence in Ironwood’s strategy and culture, measured by >70% positive response rate on annual employee engagement survey
<60%
60%
70%
80%
72%(9)
(0%)
(1%)
(3%)
(5%)
(3%)
TOTAL
45%
Adjusted Company Performance Achievement Multiplier
75%
 
2023 Proxy Statement   33

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Notes to 2022 Company Performance Targets and Results Table
(1)
Goal was below target. LINZESS U.S. net sales were $1,002 million for the year ended December 31, 2022. LINZESS U.S. net sales are reported by our U.S. partner, AbbVie.
(2)
Goal exceeded. In September 2022, we announced positive topline data from a Phase III clinical trial evaluating linaclotide 72 mcg in pediatric patients aged 6-17 with functional constipation. The trial met its primary and secondary endpoints, demonstrating that linaclotide 72 mcg improved frequency of spontaneous bowel movements and stool consistency. In December 2022, we and our U.S. partner, AbbVie, submitted an sNDA to the U.S. FDA seeking approval of a new indication of LINZESS for FC in pediatric patients aged 6-17 years. Specific target thresholds are not disclosed for competitive reasons.
(3)
Goal was below target. Specific details and target thresholds are not disclosed for competitive reasons.
(4)
Although the IW-3300 POC study goal was below target, the board of directors considered the significant progress made in this program when it exercised its discretion to adjust the performance achievement multiplier as described more fully below. Specific target thresholds are not disclosed for competitive reasons.
(5)
Although the CNP-104 goal was below target, the board of directors considered the significant progress made in this program when it exercised its discretion to adjust the performance achievement multiplier as described more fully below. Specific target thresholds are not disclosed for competitive reasons.
(6)
Goal was below target. Our total revenues were $411 million for the year ended December 31, 2022.
(7)
Goal achieved. Our adjusted EBITDA was $252 million for the year ended December 31, 2022. Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2.25% convertible notes due 2022, interest expense, interest and investment income, income tax expense and depreciation and amortization from GAAP net income.
(8)
Goal achieved. Over the course of the year, we succeeded in attaining our corporate target of achieving 7 out of 10 pre-determined EDI objectives.
(9)
Goal achieved. The overall engagement score in our annual employee engagement survey was 72%.
As illustrated in the table and the accompanying footnotes, we achieved 45% of our pre-established corporate performance goals for 2022. However, after careful consideration and following the recommendation of the compensation and HR committee, the board of directors exercised its discretion and adjusted the Company’s performance achievement multiplier for 2022 to 75%.
When making its decision to exercise discretion with respect to the Company’s performance achievement multiplier, the board of directors took into account the fact that LINZESS U.S. Net Sales was the most heavily weighted goal within the 2022 program and that the $1,002M in LINZESS net sales that was delivered in 2022, although below threshold performance, was 96% of Target and still reflected a strong 9% prescription demand growth compared to 2021. The board further acknowledged that this sales level was achieved as a result of the significant efforts of the entire team, despite unanticipated inventory fluctuations in the retail channel that were outside the control of the Company. The board of directors also considered the Company’s progress towards achieving its product pipeline goals, including the extent of clinical trial start up activities achieved and the expected patient dosing in early 2023 for the Phase II IW-3300 proof of concept study in IC/BPS and the initiation of the clinical study for CNP-104 to evaluate the safety, tolerability, pharmacodynamic effects and efficacy of CNP-104 in PBC patients, including recruitment to support the expectations of early data assessing T-cell response from the patients enrolled in the study in the second half of 2023. Finally, the board believes that its decision to increase the corporate multiplier did not create a misalignment with shareholders as the Company achieved a compelling relative total stockholder return compared to its peers and the Nasdaq Biotechnology Index in 2022.
Given all of the above, the board of directors concluded that its limited exercise of discretion to award a corporate performance achievement multiplier at a below target level of 75% would provide for strong accountability for the management team while also more appropriately reflecting the performance of the Company and its employees in 2022.
 
34   Ironwood

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In support of the 2022 corporate goals identified above, our compensation and HR committee assigned a specific subset of individual goals for each of our named executive officers as described below.
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Name
Summary of Individual Goals
Thomas McCourt

Board and Investor Relations: Engage with the board of directors to align strategic and operational objectives to optimize the value of the company. Engage shareholders, analysts, and potential shareholders to convey the potential value of the company and associated risks and ultimately foster stock price growth.

Strategic Opportunities: Lead the assessment of strategic opportunities and champion efforts where appropriate to drive corporate value.

Operational Performance: Lead and motivate the business towards the accomplishment of the 2022 corporate goals established by the board of directors.

Talent & Leadership: Continue to strengthen the effectiveness of the executive leadership team providing opportunities to advance their professional development and enhance team dynamics. Serve as the cultural champion of the organization.
Sravan Emany

2022 Operating Plan: Collaborate with the commercial and brands teams to ensure proper investment in brand growth drivers and achievement of targeted brand margins. Champion fiscal management including pursuing opportunities to reduce spending.

Investor Relations: Engage with the board of directors, shareholders, analysts, and potential shareholders to convey the potential value of the company and associated risks and ultimately foster stock price growth.

Capital Structure Management: Assess and deliver on opportunities to improve our debt and equity positions including debt refinancing and share repurchase. Foster relationships with commercial and investment banks.

Leadership of Strategic Finance: Partner with the corporate development team in identifying, assessing, and closing on strategic initiatives to expand our product portfolio.

Internal Controls: Oversee and develop the finance team to ensure appropriate controls were in place over financial reporting and treasury operations.
John Minardo

Linzess Support: Build working relationships with commercial and development leadership. Effectively partner with the senior leadership of our U.S. partner, AbbVie, to better enable joint committees to be held accountable for managing LINZESS in accordance with our collaboration agreement. Oversee our promotional review process and ensure compliance and timely review of the materials.

DE&I Champion: Guide the DE&I Council adding new perspectives to the dialogue. Co-lead the Reverse Mentorship Program and engage with our employee resource groups.

Business Development and M&A Strategy: Lead the legal/intellectual property assessment of potential proposed transactions providing clear guidance on opportunities, risks, and negotiation.

Strengthen the Legal Team Leadership: Appropriately align and develop our legal capabilities in corporate governance, contracts, SEC filings, intellectual property, employee matters, public disclosures and corporate compliance.
 
2023 Proxy Statement   35

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Name
Summary of Individual Goals
Jason Rickard

Workplace 2.0: Develop and implement initiatives to sustain employee engagement and productivity, while accounting for remote and hybrid working models and challenging labor market conditions. Lead the organization’s evolving response to the COVID-19 pandemic, including its impact on employee safety, our selling model, supplier, and other financial risks.

Supply Chain: Deliver on specific pharmaceutical development, manufacturing science, and clinical supply deliverables associated with our products and product candidates.

Information Technology, or IT, Infrastructure: Sunset legacy applications and complete improvements identified in our IT strategic road map. Align IT capabilities with emerging and future requirements while reducing operational expenses.

Human Resources and Culture: Strengthen the company’s organization and talent development capabilities. Serve as the company’s cultural champion, and implement updated corporate values and DEI initiatives, to ensure Ironwood continues to be a great place to work.
Michael Shetzline, M.D., Ph.D.

LINZESS Life-Cycle Management: Lead the research and drug development team in managing the clinical assessment of functional constipation and IBS-C in children 6-17 years of age and collaborate with our partner, AbbVie, to file supplemental new drug application with the U.S. FDA with a request for priority review, if appropriate.

Clinical Development: Collaborate with COUR to initiate proof-of-concept study for CNP-104 for primary biliary cholangitis. Complete phase 1 trial for IW-3300. Design and gain alignment with the U.S. FDA on proof-of-concept study for the treatment of IC/BPS and initiate next phase study.

GI Pipeline Expansion: Expand our GI pipeline by advancing IW-3300 and collaborating with our corporate development team to identify, evaluate and enter into agreements to secure new assets.

Research and Drug Development: Strengthen the research and drug development team and establish a team of world-class experts and trusted opinion leaders in gastroenterology.
In early 2023, Mr. McCourt evaluated the individual performance in 2022 of each of the named executive officers (other than himself), provided feedback and made recommendations to our compensation and HR committee. The compensation and HR committee then determined the named executive officers’ compensation, taking into account Ironwood’s level of achievement of its 2022 corporate goals as determined by our board; the fact that each named executive officer exceeded or achieved performance expectations for 2022, and peer group and other market data from the competitive assessment undertaken by our compensation and HR committee’s independent compensation consultant, Human Capital Solutions, Aon, or Aon, as discussed below.
Additional information on the basis for decisions about 2022 compensation relating to our named executive officers is available throughout this section and elsewhere in this proxy statement under the captions Role of the Compensation and HR Committee and Role of the Compensation Consultant: Benchmarking and Peer Group Analysis.
Compensation Decisions for 2022
Named Executive Officer Compensation Program
As in prior years, the three primary elements of our executive compensation program for 2022 were base salary, cash bonus and long-term equity incentive compensation.
2022 Base Salary
Base salaries are determined at an executive’s commencement of employment and are generally re-evaluated annually and adjusted, if warranted, to realign salaries with market levels or in connection with promotions or other changes in role and to reflect the performance of the named executive officer. In determining whether to adjust or recommend an adjustment to a named executive officer’s base salary, our compensation and HR committee takes into
 
36   Ironwood

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consideration factors such as our corporate performance in prior years, general economic factors and compensation parity among our named executive officers, as well as the abilities, performance and experience of the named executive officer. Our compensation and HR committee also reviews our named executive officers’ past compensation at the company and market data. In addition, our compensation and HR committee recommends, and our board approves, compensation determinations for our chief executive officer. Please see Role of the Compensation and HR Committee and Role of the Compensation Consultant: Benchmarking and Peer Group Analysis for further information.
In March 2022, our compensation and HR committee reviewed and approved 2022 base salaries for our named executive officers for 2022, except for Mr. Emany, due to his joining the company in December 2021, and for Mr. McCourt whose base salary is reviewed and recommended by our compensation and HR committee and approved by our board of directors. In March 2022, following a recommendation by our compensation and HR committee, our board of directors approved Mr. McCourt’s 2022 base salary. The increases in base salary for Messrs. McCourt, Minardo and Rickard and Dr. Shetzline were based on our compensation and HR committee’s (and the board of directors’, in the case of Mr. McCourt) determination that each executive officer achieved or exceeded substantially all of his respective individual goals for 2021. These base salary determinations also took into account peer group and other market data from the competitive assessment conducted by Aon and discussed in more detail below. Base salary information for 2022 compared to base salary information for 2021 for each of our named executive officers is as follows:
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Named Executive Officer
2021
Base Salary
2022
Base Salary
Increase ($)
Increase (%)
Thomas McCourt
$ 775,000 $ 806,000 $ 31,000 4.0%
Sravan Emany*
$ 500,000 $ 500,000 $ 0 0%
John Minardo
$ 475,000 $ 494,000 $ 19,000 4.0%
Jason Rickard
$ 500,000 $ 520,000 $ 20,000 4.0%
Michael Shetzline, M.D., Ph.D.
$ 484,000 $ 513,040 $ 29,040 6.0%
*
Mr. Emany’s base salary was not changed for 2022 as part of the Company’s 2021 performance review cycle as he joined the company in December 2021.
Annual Cash Incentive Program for 2022 Performance
Our annual cash incentive program, or cash bonus award, is designed to reward the achievement of our annual corporate goals and individual goals. The program is also intended to foster and support our performance-driven culture by setting clear, high-value goals, rewarding outstanding performers and making sure our employees know clearly that we value their contributions. Each target bonus award, expressed as a percentage of an executive’s base salary, is determined annually and is based on the extent to which we achieved our corporate goals for the preceding year, the executive’s individual performance in that year against his or her individual goals as well as peer group and other market data. Target bonus percentages for 2022 for each of our named executive officers, which were unchanged from the respective target bonus percentages for 2021, are as follows:
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Named Executive Officer
2022 Target Bonus
(as a % of base salary)
Thomas McCourt
75%
Sravan Emany
50%
John Minardo
45%
Jason Rickard
50%
Michael Shetzline, M.D., Ph.D.
45%
 
2023 Proxy Statement   37

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We believe that these target bonus percentages align the target cash compensation, as defined below, of our named executive officers with that of our peers, place appropriate emphasis on the achievement of our annual performance objectives and facilitate recruiting, retaining, and motivating our executive officers.
For each of our named executive officers, other than our chief executive officer, 70% of each 2022 cash bonus award was based solely on the achievement of our corporate goals and 30% was based on the named executive officer’s achievement of his individual goals as described above, and our corporate goals. In recommending for approval by the board the amount of Mr. McCourt’s 2022 cash bonus, our compensation and HR committee determined to set Mr. McCourt’s individual performance in 2022 to be equal to the company’s performance factor of 75%. The board reviewed and followed this recommendation in approving Mr. McCourt’s cash bonus award for 2022 performance.
The following table summarizes the calculation of our named executive officers’ cash bonus awards, other than for our chief executive officer. Mr. McCourt’s 2022 cash bonus was calculated by multiplying his target bonus percentage (75%) by the corporate performance factor, as noted above.
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Component Calculation
Company Performance
Only Component
(Weighted 70%)
70% Weighting
×
Target Bonus
×
Corporate Performance
Achievement Multiplier
=
Company
Performance
Only Component
Payout
+
Company and Individual
Performance Component
(Weighted 30%)
30% Weighting
×
Target Bonus
×
Corporate
Performance
Achievement
Multiplier
×
Individual
Performance
Achievement
Multiplier
=
Company
Performance
Only Component
Payout
Total Annual
Bonus Payout
This approach was intended to closely align cash bonus award payouts with the achievement of our corporate goals, while taking into account individual performance (or, in the case of Mr. McCourt, equating company performance with individual performance) and making bonus determinations in a transparent way. As described above, the company performance achievement multiplier for 2022 was 75%. In February 2023 our compensation and HR committee, determined that each of our named executive officers (other than Mr. McCourt, whose individual performance was equated with company performance) achieved or exceeded pre-established individual goals for 2022, resulting in the following individual performance achievement multipliers and bonus ratios to target bonus percentage (after applying the 70%/30% weighting and taking into account the company performance achievement multiplier of 75%).The compensation and HR committee then reviewed and approved (or, in the case of Mr. McCourt, recommended that the board approve, which recommendation was followed by the board) the following bonuses for 2022 performance for our named executive officers:
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Named Executive Officer
Individual Performance
Actual Bonus to Target Bonus
Ratio
Annual Cash Incentive Program
for 2022 Performance
Thomas McCourt
75%(1) 75% $ 453,375
Sravan Emany
120% 80% $ 198,750
John Minardo
100% 75% $ 166,725
Jason Rickard
125% 81% $ 209,625
Michael Shetzline, M.D., Ph.D.
130% 82% $ 188,735
(1)
As described above, our compensation and HR committee also recommended, and our board determined that Mr. McCourt’s individual performance achievement multiplier was 75% on the basis that such multiplier was equal to the corporate performance achievement multiplier of 75%.
 
38   Ironwood

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2022 Long-Term Equity Awards
Long-term equity incentive compensation granted in 2022 represented, on average, approximately 73% of each named executive officer’s total compensation for the year (based on the grant date fair value of equity awards, with performance-based restricted stock unit, or PSU, awards measured at target). We believe this emphasis on equity, and particularly performance-based equity, strongly reinforces the principle of “pay for performance” and closely ties our executives’ pay outcomes to stockholder value creation. We also use equity awards as our incentive vehicle for long-term compensation to attract, reward and retain our named executive officers and to align the interests of our named executive officers with those of stockholders. We typically grant equity awards in the first quarter of each year based on our performance in the prior year.
Throughout the year, our compensation and HR committee may award additional equity grants as circumstances warrant. Our compensation and HR committee does not apply a rigid formula in allocating equity awards to our named executive officers as a group or to any particular named executive officer, but sets an equity pool each year based on peer group and other market data from the Aon competitive assessment discussed below. In addition to peer group and market data, our compensation and HR committee also considers other factors, including input from Aon and the amount of unvested equity held by a named executive officer, in determining the size of individual equity awards.
2022 Annual Equity Awards
In early 2022, our compensation and HR committee determined that the annual long-term equity incentive compensation awards for our named executive officers should consist of an approximately even number of PSUs and restricted stock units, or RSUs. The compensation and HR committee chose relative total shareholder return, or rTSR performance as the sole PSU performance metric in our 2022 executive equity compensation program to further tie the compensation of our named executive officers to stockholder value. Aon assisted the compensation and HR committee with identifying a peer group specifically for purposes of the rTSR measurement goal used for PSUs granted in 2022, or the 2022 rTSR PSUs.
The 2022 rTSR PSUs use the following performance metric and vesting opportunities:
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Performance Metric
Performance Period
Threshold Goals
(50% attainment)
Target Goals
(100% attainment)
Stretch Goals
(200% attainment)
2022 rTSR PSUs Three-year performance period ending December 31, 2024 rTSR at the 25th percentile compared to rTSR peer group through 2024 rTSR at the 50th percentile compared to rTSR peer group through 2024 rTSR at the 75th percentile compared to rTSR peer group through 2024(1)
(1)
Attainment for the 2022 rTSR PSUs is capped at 100% where the Company’s total stockholder return is negative.
 
2023 Proxy Statement   39

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At the time they were designated, the peer group identified for the purposes of the 2022 rTSR PSUs consisted of commercial pharmaceutical and biotechnology companies that ranged between $750 million and $10 billion in market capitalization; Ironwood’s 30-day market value capitalization as of December 31, 2021 was at the 39th percentile relative to this custom peer group. Our compensation and HR committee approved the following custom rTSR measurement peer group for the 2022 rTSR PSUs, which included all of our executive compensation peers:
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ACADIA Pharmaceuticals, Inc. (Nasdaq: ACAD)
Intercept Pharmaceuticals, Inc. (Nasdaq: ICPT)
Agenus Inc. (Nasdaq: AGEN)
Ligand Pharmaceuticals Incorporated (Nasdaq: LGND)
Agios Pharmaceuticals, Inc. (Nasdaq: AGIO)
MacroGenics, Inc. (Nasdaq: MGNX)
Alkermes plc (Nasdaq: ALKS)
MannKind Corporation (Nasdaq: MNKD)
Amicus Therapeutics, Inc. (Nasdaq: FOLD)
Myovant Sciences Ltd. (Nasdaq: MYOV)
Apellis Pharmaceuticals, Inc. (Nasdaq: APLS)
Neurocrine Biosciences, Inc. (Nasdaq: NBIX)
BioCryst Pharmaceuticals, Inc. (Nasdaq: BCRX)
OPKO Health, Inc. (Nasdaq: OPK)
Biohaven Pharmaceutical Holding Company Ltd. (Nasdaq: BHVN)
Pacira BioSciences, Inc. (Nasdaq: PCRX)
bluebird bio, Inc. (Nasdaq: BLUE)
PTC Therapeutics, Inc. (Nasdaq: PTCT)
Blueprint Medicines Corporation (Nasdaq: BPMC)
Radius Health, Inc. (Nasdaq: RDUS)
BridgeBio Pharma, Inc. (Nasdaq: BBIO)
Sage Therapeutics, Inc. (Nasdaq: SAGE)
ChemoCentryx, Inc. (Nasdaq: CCXI)
Sarepta Therapeutics, Inc. (Nasdaq: SRPT)
Coherus BioSciences, Inc. (Nasdaq: CHRS)
Sorrento Therapeutics, Inc. (Nasdaq: SRNE)
Corcept Therapeutics Incorporated (Nasdaq: CORT)
Supernus Pharmaceuticals, Inc. (Nasdaq: SUPN)
Dynavax Technologies Corporation (Nasdaq: DVAX)
TG Therapeutics, Inc. (Nasdaq: SUPN)
Emergent BioSolutions Inc. (Nasdaq: EBS)
Travere Therapeutics, Inc. (Nasdaq: TVTX)
Epizyme, Inc. (Nasdaq: EPZM)
Ultragenyx Pharmaceutical Inc. (Nasdaq: RARE)
Exelixis, Inc. (Nasdaq: EXEL)
United Therapeutics Corporation (Nasdaq: UTHR)
Global Blood Therapeutics, Inc. (Nasdaq: GBT)
Vanda Pharmaceuticals Inc. (Nasdaq: VNDA)
Halozyme Therapeutics, Inc. (Nasdaq: HALO)
Vericel Corporation (Nasdaq: VCEL)
Insmed Incorporated (Nasdaq: INSM)
In March 2022, our named executive officers (other than Mr. Emany) were granted RSUs and PSUs, in each case under our 2019 Plan. RSUs granted in 2022 vest as to 25% of the underlying shares on each approximate anniversary of the grant date of the award, subject to continued employment on each vesting date, which is the vesting schedule typically used for RSU awards granted to employees. As described above, the 2022 PSU awards are subject to a single rTSR performance goal, which is measured over a three-year performance period ending December 31, 2024.
 
40   Ironwood

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The RSUs and PSUs granted to our named executive officers (other than Mr. Emany) in March 2022 were as follows:
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Named Executive Officer
2022 Annual PSU Grant
(# of Shares of Class A common stock
Subject to PSUs) (at target)
2022 Annual RSU Grant
(# of Shares of Class A common stock
Subject to RSUs)
Thomas McCourt
248,868 248,869
Sravan Emany*
0 0
John Minardo
67,873 67,873
Jason Rickard
90,497 90,498
Michael Shetzline, M.D., Ph.D.
81,447 81,448
*
Mr. Emany was not eligible for a PSU or RSU award in 2022 due to the fact that he joined the company in December 2021.
In making its determinations with respect to the size of equity awards granted to each of our named executive officers (other than Mr. Emany), our compensation and HR committee took into account peer group and other market data from the Aon competitive assessment discussed below, as well as other factors including each executive’s current equity holdings, expected future contributions and retention.
2020 rTSR PSUs Payout
In 2020, our compensation and HR committee established the following performance goals for our 2020 PSU awards, which were intended to drive executive accountability for delivering value to our stockholders:
1)
Gaining the U.S. FDA’s acceptance of one or more additional NDAs through internal development or acquisition of development-stage or commercial-stage programs, or NDA Acceptance PSUs;
2)
Growing revenue and controlling expenses as measured by cumulative adjusted organic EBITDA, or Adjusted EBITDA PSUs; and
3)
Realizing rTSR goals as described in our 2021 proxy statement filed with the SEC on April 22, 2021 (the “2021 Proxy Statement”), or 2020 rTSR PSUs.
The 2020 PSUs use the following metrics, weighting and vesting opportunities:
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Performance Metric
Weight
Performance Period
Threshold Goals
(50% attainment)
Target Goals
(100% attainment)
Stretch Goals
(200% attainment)
Payout
Weighted
Payout
NDA Acceptance PSUs 40% Three-year performance period ending December 31, 2022 N/A Acceptance by the U.S. FDA of an NDA for IW-3718 or other internal or external development program Acceptance by the U.S. FDA of two NDAs, including IW-3718 and/or other internal or external development programs 0% 0%
Adjusted EBITDA PSUs(1) 30% 2020 — 2021 Cumulative Target $266 million $296 million $355 million 200% 60%
2020 rTSR PSUs(2) 30% Three-year performance period ending December 31, 2022 rTSR at the 25th percentile compared to rTSR peer group through 2022 rTSR at the 50th percentile compared to rTSR peer group through 2022 rTSR at the 75th percentile compared to rTSR peer group through 2022(3) 100% 30%
Weighted Average Payout:
90%
 
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(1)
Adjusted organic EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2.25% convertible notes due 2022, restructuring expenses, net interest expense, income taxes, depreciation and amortization from GAAP net income, and further adjusted by excluding the impact of any corporate development transactions and stock-based compensation expense.
(2)
If the TSR percentile rank falls between Threshold, Target or Stretch goals, the percentage of rTSR PSUs earned shall be interpolated on a straight-line basis.
(3)
Attainment for the 2020 rTSR PSUs is capped at 100% where the Company’s total stockholder return is negative.
In January 2022, our compensation and HR committee certified that, with respect to the Adjusted EBITDA PSUs, the achievement of cumulative adjusted organic EBITDA for the performance period, which ended on December 31, 2021, was $467 million, resulting in a 200% attainment of this performance metric.
In January 2023, our compensation and HR committee certified that, with respect to the 2020 rTSR PSUs, the achievement of the rTSR percentile rank compared to the rTSR peer group for the performance period, which ended on December 31, 2022, was 67%, resulting in a 100% attainment of this performance metric, since the Company’s total stockholder return was negative. The NDA Acceptance PSUs goal was not met and therefore no portion of the NDA Acceptance PSUs vested. Overall, the weighted average payout for our 2020 PSUs performance metrics was 90%.
Executive Severance Agreements and Benefits in the Event of a Change of Control
The severance arrangements that we have with our named executive officers, as well as other benefits provided in the event of a change of control, are described elsewhere in this proxy statement under the captions Named Executive Officer Severance Arrangements and Benefits in the Event of a Change of Control and Potential Payments Upon Termination or Change of Control. Severance benefits are only payable if the named executive officer has complied with all of our rules and policies, has executed a separation agreement that includes a release of claims and complies with his or her post-employment nondisclosure, noncompetition and non-solicitation obligations. We believe that offering these payments and benefits assists us in recruiting, retaining and motivating executive officers, facilitates the operation of our business, allows our named executive officers to better focus their time, attention and capabilities on our business, and provides for a clear and consistent approach to managing departures with mutually understood separation benefits.
Other Compensation
We maintain broad-based benefits, including health insurance, life and disability insurance, dental insurance, transportation (for employees who reside in Massachusetts and neighboring states) and fitness stipends, and a 401(k) plan with a matching contribution equal to the greater of: (a) 100% of employee contributions on the first 3% of eligible compensation and 50% of employee contributions on the next 3% of eligible compensation; or (b) 75% of the first $10,000 of employee contributions.
Other than our broad-based benefits, or as otherwise described herein, none of our named executive officers receive perquisites of any nature.
Compensation Decisions for 2023
2023 Base Salary
In February 2023, our compensation and HR committee reviewed and approved 2023 base salaries for our named executive officers, except for Mr. McCourt, whose base salary is reviewed and recommended by our compensation and HR committee and approved by our board of directors. In March 2023, following a recommendation by our compensation and HR committee, our board of directors approved Mr. McCourt’s base salary. The increases in base salary for our named executive officers were based on our compensation and HR committee’s (and the board of directors’, in the case of Mr. McCourt) determination that each executive officer achieved or exceeded substantially all of his respective individual goals for 2022. These base salary determinations also took into account peer group and other market data from the competitive assessment conducted by Aon and discussed in more detail below. Base salary information for 2023 compared to base salary information for 2022 for each of our named executive officers, is as follows:
 
42   Ironwood

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Named Executive Officer
2022
Base Salary
2023
Base Salary
Increase ($)
Increase (%)
Thomas McCourt
$ 806,000 $ 834,210 $ 28,210 3.5%
Sravan Emany
$ 500,000 $ 520,000 $ 20,000 4.0%
John Minardo
$ 494,000 $ 512,728 $ 18,728 3.8%
Jason Rickard
$ 520,000 $ 540,800 $ 20,800 4.0%
Michael Shetzline, M.D., Ph.D.
$ 513,040 $ 533,562 $ 20,522 4.0%
2023 Annual Equity Awards
In early 2023, the compensation and HR committee determined that the annual long-term equity incentive compensation awards for our named executive officers should consist of an approximately even number of PSUs and RSUs. For PSUs, the compensation and HR committee further determined that performance under our PSU awards should be measured against both an absolute TSR (50%) and an rTSR performance metric (50%) in order to tie further the compensation of our named executive officers to stockholder value creation and hold our executives accountable for our stock price performance. The compensation and HR committee further determined that the three-year performance period for the 2023 PSUs should start on March 1, 2023, and end on February 28, 2026. This change will enable both performance metrics to take into account the updated financial information for the fiscal year-end, including any changes in financial guidance that may have affected the stock price of the Company and the rTSR peer group companies throughout the performance period.
The 2023 PSUs use the following metrics, weighting and vesting opportunity:
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Performance
Metric
Weight
Performance
Period
Threshold
Target
Above Target
Maximum
2023 Absolute TSR PSUs 50% Ending February 28,
2026
50% attainment:
30 calendar-day average closing share price of $13.23 or above
100% attainment:
30 calendar-day average closing share price of $13.80 or above
200% attainment:
30 calendar-day average closing share price of $15.53 or above
400% attainment:
30 calendar-day average closing share price of $17.25 or above
2023 rTSR
PSUs (1)
50% Ending February 28,
2026
50% attainment:
rTSR at the 25th percentile compared to rTSR peer group through February 2026
100% attainment:
rTSR at the 50th percentile compared to rTSR peer group through February 2026
200% attainment:
rTSR at the 75th percentile compared to rTSR peer group through February 2026
N/A
(1)
If the TSR percentile rank falls between Threshold, Target or Stretch goals, the percentage of rTSR PSUs earned shall be interpolated on a straight-line basis. Attainment for the 2022 rTSR PSUs is capped at 100% where the Company’s total stockholder return is negative.
At the time they were designated, the peer group identified for the purposes of the 2023 rTSR PSUs consisted of commercial pharmaceutical and biotechnology companies that ranged between $750 million and $10 billion in market capitalization; Ironwood’s 30-day average market value capitalization as of December 31, 2022 was at the 47th percentile relative to this custom peer group. Our compensation and HR committee approved the following custom rTSR measurement peer group for the 2023 rTSR PSUs, which included all of our executive compensation peers:
 
2023 Proxy Statement   43

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ACADIA Pharmaceuticals, Inc. (Nasdaq: ACAD)
Insmed Incorporated (Nasdaq: INSM)
ADMA Biologics, Inc. (Nasdaq: ADMA)
Intercept Pharmaceuticals, Inc. (Nasdaq: ICPT)
Alkermes plc (Nasdaq: ALKS)
Ionis Pharmaceuticals, Inc. (Nasdaq: IONS)
Amicus Therapeutics, Inc. (Nasdaq: FOLD)
Kiniksa Pharmaceuticals, Ltd. (Nasdaq: KNSA)
Apellis Pharmaceuticals, Inc. (Nasdaq: APLS)
Ligand Pharmaceuticals Incorporated (Nasdaq: LGND)
Arcus Biosciences (Nasdaq: RCUS)
Myriad Genetics, Inc. (Nasdaq: MYGN)
Arrowhead Pharmaceuticals Inc. (Nasdaq: ARWR)
Natera, Inc (Nasdaq: NTRA)
Avid Bioservices, Inc. (Nasdaq: CDMO)
Novavax, Inc. (Nasdaq: NVAX)
BioCryst Pharmaceuticals, Inc. (Nasdaq: BCRX)
Organogenesis Holdings Inc.(Nasdaq: ORGO)
Blueprint Medicines Corporation (Nasdaq: BPMC)
Pacira BioSciences, Inc. (Nasdaq: PCRX)
Catalyst Pharmaceuticals, Inc. (Nasdaq: CPRX)
PTC Therapeutics, Inc. (Nasdaq: PTCT)
Coherus BioSciences, Inc. (Nasdaq: CHRS)
REGENXBIO Inc. (Nasdaq: RGNX)
Corcept Therapeutics Incorporated (Nasdaq: CORT)
Supernus Pharmaceuticals, Inc. (Nasdaq: SUPN)
Cytokinetics, Inc. (Nasdaq: CYTK)
Syndax Pharmaceuticals, Inc. (Nasdaq: SNDX)
Deciphera Pharmaceuticals, Inc. (Nasdaq: DCPH)
Travere Therapeutics, Inc. (Nasdaq: TVTX)
Denali Therapeutics Inc. (Nasdaq: DNLI)
Vanda Pharmaceuticals Inc. (Nasdaq: VNDA)
Dynavax Technologies Corporation (Nasdaq: DVAX)
Veracyte, Inc. (Nasdaq: VCYT)
Exact Sciences Corporation (Nasdaq: EXAS)
Vericel Corporation (Nasdaq: VCEL)
Exelixis, Inc. (Nasdaq: EXEL)
Vir Biotechnology, Inc. (Nasdaq: VIR)
FibroGen, Inc. (Nasdaq: FGEN)
Xencor Inc.(Nasdaq: XNCR)
Halozyme Therapeutics, Inc. (Nasdaq: HALO)
In March 2023, our named executive officers were granted RSUs and PSUs, in each case under our 2019 Plan. RSUs granted in 2023 , other than for our chief executive officer, vest as to 25% of the underlying shares on each approximate anniversary of the grant date of the award, subject to continued employment on each vesting date, which is the vesting schedule typically used for RSU awards granted to employees. RSUs granted in 2023 for Mr. McCourt vest as to 33.3% of the underlying shares on each approximate anniversary of the grant date of the award, subject to his continued employment on each vesting date. As described above, the 2023 PSU awards are subject to absolute TSR and rTSR performance goals, and are measured over a three-year performance period ending February 28, 2026.
 
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The RSUs and PSUs granted to our named executive officers in March of 2023 were as follows:
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Named Executive Officer
2023 Annual PSU Grant
(# of Shares of Class A common stock
Subject to PSUs) (at target)
2023 Annual RSU Grant
(# of Shares of Class A common stock
Subject to RSUs)
Thomas McCourt
240,594 240,595
Sravan Emany
74,235 74,236
John Minardo
65,502 65,502
Jason Rickard
43,668 43,668
Michael Shetzline, M.D., Ph.D.
69,869 69,869
Basis for Our Compensation Policies and Decisions
Our Values and Goals
The objectives of our compensation policies are to provide compensation and incentives that align employee actions and motivations with the interests of our stockholders; attract, retain, motivate and reward outstanding talent across Ironwood through well-communicated programs that are aligned with our vision and mission; and support a positive company culture and values.
We are guided by the following principles with respect to our compensation determinations:

design compensation and incentive programs that align employee actions and motivations with the interests of our stockholders, support our business objectives and hold employees accountable for the achievement of key goals and milestones;

foster and support our performance-driven culture by setting clear, aggressive, high-value goals, rewarding outstanding performers to the extent these goals are achieved, and making sure our best performers know clearly that we value their contributions;

as with all spending, serve as careful stewards of our stockholders’ assets when making compensation decisions;

maximize our employees’ sense of ownership so that they have a long-term owner’s perspective, can see the impact of their efforts on our success, and can share in the benefits of that success through the opportunity to become stockholders of Ironwood through equity-based awards;

recognize that compensation is one of a number of tools to stimulate and reward productivity, great drug development, and successful commercialization, together with recognizing individual growth potential, providing a great workplace culture, and sharing in our success;

foster a strong team culture, focused on our principles of great drug development and commercialization, which is reinforced through our compensation and incentive programs;

design compensation and incentive programs that are fair, equitable and competitive; and

design compensation and incentive programs that are simple and understandable.
 
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Executive Compensation Governance
Highlighted procedures and tools that we use to ensure effective governance of compensation plans and decisions include:

our compensation and HR committee has the authority to hire independent counsel, compensation consultants and other advisors;

our compensation and HR committee conducts a regular review and assessment of risk as it relates to our compensation policies and practices;

as part of our insider trading prevention policy, our executive officers and directors are prohibited from engaging in any hedging or monetization transactions with respect to our securities, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds;

we have no perquisites, except as otherwise described herein, other than broad-based benefits, including health and wellbeing benefits, transportation, remote work and fitness stipends and a 401(k) plan that we make available to all of our employees;

our executive severance agreements (i) do not provide for tax gross-ups and (ii) contain double-trigger requirements for equity acceleration and other benefits in the event of a change of control;

eight of our nine directors are independent, including all members of our compensation and HR committee, and we have instituted stock ownership guidelines that require directors to accumulate and continuously hold a specified amount of our Class A common stock (see Director Stock Ownership Guidelines elsewhere in this proxy statement for additional information);

we have instituted executive stock ownership guidelines that will require executive officers to accumulate and continuously hold a specified amount of our Class A common stock (see Executive Officer Stock Ownership Guidelines elsewhere in this proxy statement for additional information); and

we have a clawback policy that provides our board of directors, in the event of a financial restatement due to material noncompliance with financial reporting requirements and where an executive engaged in intentional misconduct that caused or partially caused the need for the restatement, with the discretionary right to recover from our current and former executive officers that portion of the bonus or other incentive compensation that was received by the covered executives or effect the cancellation of unvested and vested equity awards previously granted to the covered executives based on our financial performance results and that would not have been awarded based on the restated results. The board of directors’ recovery rights under this policy will be without prejudice to other remedies the company may have for the recovery or adjustment of incentive compensation. Additionally, if we are required to restate our financial results due to our material noncompliance with any financial reporting requirements under the federal securities laws as a result of misconduct, our chief executive officer and chief financial officer may be legally required to reimburse us for any bonus or other incentive- based or equity-based compensation they receive in accordance with the provisions of section 304 of the Sarbanes-Oxley Act of 2002. Finally, we intend to update our clawback policy to address the recovery of erroneously-awarded incentive compensation in compliance with the requirements of the Dodd-Frank Act, final SEC rules and applicable listing standards.
Compensation Determination Process
In December 2020, the board approved updates to our corporate governance guidelines and the charter of the compensation and HR committee to provide that, beginning in 2021, (i) our board would assess the Company’s corporate performance and (ii) our compensation and HR committee would recommend, and our board would approve, the compensation determination for our chief executive officer. In determining the compensation of our chief executive officer, the board deliberates and votes on the chief executive officer’s compensation outside of the presence of the chief executive officer, and the chief executive officer and any other non-independent directors abstain from such determination.
 
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In January 2023, our board met and, following the recusal of non-independent directors, our board approved our corporate goal achievement for 2022. Following the board’s corporate goal assessment, our compensation and HR committee evaluated the performance of our executive officers (other than Mr. McCourt), including performance against goals and objectives relevant to such executive officers’ compensation, and then approved salary increases, 2022 cash incentive bonuses and 2023 cash incentive bonus targets and equity awards for 2023 for these executives. The compensation and HR committee similarly evaluated Mr. McCourt’s performance and made a recommendation to the board relating to Mr. McCourt’s bonus for 2022 performance and his annual equity award, base salary and target bonus percentage for 2023. In making these compensation-related decisions or recommendations for 2022 performance, our compensation and HR committee considered the competitive assessment prepared by Aon, as described in more detail below, as well as the other factors described in this Compensation Discussion and Analysis.
At its meeting in March 2023, the board approved Mr. McCourt’s 2022 bonus, salary increase, equity awards and target bonus percentage for 2023; Mr. McCourt was not present for the board’s deliberation and determination on these compensation items.
The compensation and HR committee also reviews our bonus pool, which is calibrated based on corporate performance, and approves our equity pools, which are calibrated for competitive market practice, and assigns a portion of each of these pools to all of our employees other than our executive officers. Allocation decisions of these portions are made by members of senior management designated by our compensation and HR committee.
Our compensation and HR committee also evaluates our compensation policies annually, taking into consideration our results of operations, our long and short-term goals, individual goals, market data, the competitive market for our executive officers and general economic factors. Additionally, our compensation and HR committee or board (in the case of the determinations relating to chief executive officer compensation) may recommend or decide, as appropriate, to modify the mix or amount of base salary, bonus, and long-term incentives to best fit an executive officer’s specific circumstances or, if warranted by competitive market conditions, to grant retention or additional equity awards to attract, retain and motivate skilled personnel. We believe that this discretion and flexibility allows our compensation and HR committee and board (in the case of determinations of our chief executive officer’s compensation) to better achieve our compensation objectives.
Executive Officer Stock Ownership Guidelines
Following a competitive assessment of market data related to executive officer stock ownership requirements provided by Aon and guidance published by Investor Advisory Service, in October 2020, our compensation and HR committee recommended, and, in December 2020, our board approved, Executive Officer Stock Ownership Guidelines. In February 2022, our compensation and HR amended and restated our Executive Officer Stock Ownership Guidelines to exclude the value of vested “in the money” stock options towards satisfying our executive officer stock ownership requirements. We believe our Executive Officer Stock Ownership Guidelines further align the interests of our executive officers with those of our stockholders and also incentivize executive officers to focus on maximizing long-term value.
Our Executive Officer Stock Ownership Guidelines, as amended, provide that our chief executive officer is required to hold shares of the Company’s Class A common stock with a value equal to at least four (4) times his or her annual base salary and that each executive officer is required to hold shares of the Company’s Class A common stock with a value equal to one (1) times his or her annual base salary. Executive officers are required to achieve the applicable level of ownership by the later of December 2025 (five years from the date of adoption of the Executive Officer Stock Ownership Guidelines in December 2020) or the fifth anniversary of the date a person was initially designated as an executive officer of the Company. Shares that count towards satisfaction of the Executive Officer Stock Ownership Guidelines include, among other forms of ownership, shares held outright by the executive officer or a member of his or her immediate family and unvested RSUs net of applicable taxes. Vested “in the money” stock options and unearned performance-based awards do not count towards satisfaction of these ownership requirements.
Compliance with the stock ownership requirements will be measured on the date of the annual meeting of stockholders of the company each year based on the annualized salary then in effect for each officer. Failure to comply with the
 
2023 Proxy Statement   47

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Executive Officer Stock Ownership Guidelines will (among other things, as may be determined by the compensation and HR committee) require executive officers to retain at least 100% of the shares, net of applicable tax withholding and the payment of any exercise or purchase price (if applicable), received upon the vesting or settlement of equity awards or the exercise of stock options. As of March 31, 2023, each of our executive officers was in compliance with our Executive Officer Stock Ownership Guidelines.
Role of the Compensation and HR Committee
As set forth in its written charter, our compensation and HR committee has the responsibility for evaluating the performance of our executive officers, taking into account the determination of our board with respect to our corporate performance; reviewing and approving the compensation of our executive officers (other than our chief executive officer); reviewing and recommending to the board our chief executive officer’s compensation; recommending to the board the adoption of new compensation plans; administering our existing plans; reviewing and recommending director and committee compensation to the board; reviewing and overseeing our Executive Officer Stock Ownership Guidelines; overseeing succession planning for our senior management; reviewing risks associated with our compensation policies and practices; and overseeing our strategies and policies related to human capital management, including with respect to matters such as diversity and inclusion, workplace environment and culture, and talent development and retention. In addition, our compensation and HR committee is responsible for ensuring that our compensation policies are aligned with our compensation philosophy and guiding principles.
In 2022, our compensation and HR committee made all of the compensation determinations with respect to each of our named executive officers, other than Mr. McCourt.
In making its determinations relating to compensation for performance in 2022, our compensation and HR committee took into account the feedback and recommendations from Mr. McCourt, including the feedback Mr. McCourt received from the named executive officer’s direct reports and other members of our management team.
Role of the Compensation Consultant: Benchmarking and Peer Group Analysis
Our compensation and HR committee has the authority to select and retain independent advisors and consultants to assist it with carrying out its responsibilities, and we are required to pay any related expenses approved by the committee. In 2022, our compensation and HR committee exercised such authority and engaged Aon as its compensation consultant. Aon reported directly to our compensation and HR committee throughout the period of its engagement.
Other than the purchase of certain benefits surveys and employee compensation benchmarking data from Aon in 2022 and certain other accounting and consulting services requested by the company related to equity plan matters, including forfeiture rate analysis, PSU award design, and 2022 rTSR PSU valuations, Aon did not provide us with services in 2022 other than those requested by our compensation and HR committee and the review of this Compensation Discussion and Analysis for conformance with best practices. Based on the scope of our compensation and HR committee’s engagements with Aon, it was determined that Aon did not have a conflict of interest in its role as compensation consultant under applicable rules.
In order to assist our compensation and HR committee in setting 2022 and 2023 compensation, respectively, Aon conducted competitive assessments of 2021 and 2022 target compensation for our named executive officers, with a focus on the following components of our named executive officer compensation:

base salary;

target total cash compensation (which is base salary plus the target bonus);

long-term equity incentives (which are valued based on grant date fair value); and

target total direct compensation (which is target total cash compensation plus the grant date value of the most recent long-term incentive grant).
In conducting this assessment, Aon analyzed the components of our named executive officer compensation listed above, in each case measured against the 25th, 50th and 75th percentiles of our executive compensation peer group.
 
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Our peer group is reviewed at least annually by our compensation and HR committee. In setting our peer group, our compensation and HR committee applies a qualitative lens to help focus the potential group on the companies with which we are competing for talent. Our compensation and HR committee first identifies a potential pool of peer companies from a number of sources, including the companies listing Ironwood in their peer groups and the other companies listed in such peer companies’ peer groups, as well as companies included in third party peer group assessments. Our compensation and HR committee then considers certain size filters including market capitalization, revenue, and number of employees, as well as certain business model filters including commercial focus, and growth. The peer group that Aon proposed and that the compensation and HR committee used as a reference point in connection with 2022 compensation decisions is composed of the following 16 companies, which at the time they were designated as our peer group had a median 30-day average market capitalization of approximately $2.6 billion, median revenue of approximately $340 million, a median of 498 employees, and a commercial drug or drug candidate in later stage development:
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ACADIA Pharmaceuticals, Inc. (Nasdaq: ACAD)
Halozyme Therapeutics, Inc. (Nasdaq: HALO)
Agios Pharmaceuticals, Inc. (Nasdaq: AGIO)
Intercept Pharmaceuticals, Inc. (Nasdaq: ICPT)
Alkermes plc (Nasdaq: ALKS)
Ligand Pharmaceuticals Incorporated (Nasdaq: LGND)
Amicus Therapeutics, Inc. (Nasdaq: FOLD)
Pacira BioSciences, Inc. (Nasdaq: PCRX)
bluebird bio, Inc. (Nasdaq: BLUE)
PTC Therapeutics, Inc. (Nasdaq: PTCT)
Blueprint Medicines Corporation (Nasdaq: BPMC)
Radius Health, Inc. (Nasdaq: RDUS)
Coherus BioSciences, Inc. (Nasdaq: CHRS)
Supernus Pharmaceuticals, Inc. (Nasdaq: SUPN)
Corcept Therapeutics Incorporated (Nasdaq: CORT)
Vanda Pharmaceuticals Inc. (Nasdaq: VNDA)
In assisting our compensation and HR committee in setting 2022 compensation, Aon presented proxy peer data as well as results from the Radford Global Life Sciences Survey, or Radford Survey, which was comprised of companies that represent a broader market perspective and similar employee population to us, and a Market Composite, which combined the peer group data and data from the Radford Survey by weighting each source equally. Although this competitive assessment was not used to mandate any specific compensation decisions, our compensation and HR committee considered the results of this assessment when making base salary, cash bonus and long-term equity incentive award determinations with respect to our named executive officers in early 2022.
In June 2022, our compensation and HR committee approved a new peer group, which Aon used as a reference point in advising our compensation and HR committee regarding compensation decisions made beginning in the fourth quarter of 2022. Aon recommended that two companies from our existing peer group be removed because they no longer met the revenue screening criterium (Agios Pharmaceuticals, Inc. and bluebird bio, Inc.), and identified three potential companies (Dynavax Technologies Corporation, Organogenesis Holdings Inc. and Ultragenyx Pharmaceutical Inc.) to replace the two companies that were recommended to be removed from the prior peer group. This updated peer group is comprised of the following 17 companies, which at the time of approval by our compensation and HR committee had a median 30-day average market capitalization of approximately $2.1 billion, median revenue of approximately $380 million, a median of 495 employees and a commercial drug or drug candidate in later stage development:
 
2023 Proxy Statement   49

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ACADIA Pharmaceuticals, Inc. (Nasdaq: ACAD)
Ligand Pharmaceuticals Incorporated (Nasdaq: LGND)
Alkermes plc (Nasdaq: ALKS)
Organogenesis Holdings Inc. (Nasdaq: ORGO)
Amicus Therapeutics, Inc. (Nasdaq: FOLD)
Pacira BioSciences, Inc. (Nasdaq: PCRX)
Dynavax Technologies Corporation (Nasdaq: DVAX)
PTC Therapeutics, Inc. (Nasdaq: PTCT)
Blueprint Medicines Corporation (Nasdaq: BPMC)
Radius Health, Inc. (Nasdaq: RDUS)
Coherus BioSciences, Inc. (Nasdaq: CHRS)
Supernus Pharmaceuticals, Inc. (Nasdaq: SUPN)
Corcept Therapeutics Incorporated (Nasdaq: CORT)
Vanda Pharmaceuticals Inc. (Nasdaq: VNDA)
Halozyme Therapeutics, Inc. (Nasdaq: HALO)
Ultragenyx Pharmaceutical Inc. (Nasdaq: RARE)
Intercept Pharmaceuticals, Inc. (Nasdaq: ICPT)
Tax and Accounting Considerations
While our compensation and HR committee may consider the tax and accounting implications of its executive compensation decisions, neither element was a material consideration in the compensation awarded to our named executive officers in 2022.
Executive Compensation Risk Assessment
Our compensation and HR committee engaged Aon to conduct a formal compensation risk assessment in December 2022. The compensation and HR committee then reviewed our 2022 compensation policies as generally applicable to our employees and determined that our policies did not encourage excessive and unnecessary risk-taking, and that the level of risk that they did encourage was not reasonably likely to have a material adverse effect on the Company. Our compensation and HR committee considered the following, among other factors, in reviewing our compensation policies related to 2022 compensation:

our use of different types of compensation vehicles provided a balance of long and short-term incentives with fixed and variable components;

we granted equity-based awards consisting of a mixed balance of time-based vesting and performance-based awards, which encouraged participants to look to long-term appreciation in equity values;

our annual bonus determinations for each employee were dependent on achievement of a diverse set of company-level goals, which we believe promoted long-term value; and

our system of internal control over financial reporting and code of business conduct and ethics, among other things, reduced the likelihood of manipulation of our financial performance to enhance payments under any of our incentive plans.
 
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Compensation Committee Report
We have:
1.
reviewed and discussed with management the Compensation Discussion and Analysis found herein; and
2.
based on the review and discussions referred to in paragraph (1) above, we recommended to the board of directors that the Compensation Discussion and Analysis be included in the company’s proxy statement on Schedule 14A for filing with the SEC.
By the Compensation and HR Committee,
Andrew Dreyfus, Chair
Mark Currie, Ph.D.
Jon Duane
Marla Kessler
 
2023 Proxy Statement   51

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Compensation Tables
Summary Compensation Table
The following table sets forth information regarding the compensation paid or accrued to, or earned by, each of our named executive officers during the years ended December 31, 2022, 2021 and 2020, or such shorter period of the named executive officer’s service.
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Name and Principal Position*
Year
Salary
($)(1)
Bonus
($)
Stock
Awards
($)(2)
Option
Awards
($)(2)
Non-Equity
Incentive
Plan 
Compensation
($)(3)
All Other
Compensation
($)(4)
Total
($)
Thomas McCourt
Chief Executive Officer
2022 805,404 143,300(5) 6,473,069(6) 453,375 18,118 7,893,266
2021 732,053 143,300 7,236,498 680,063 18,090 8,810,004
2020 576,120 2,465,327 357,409 11,040 3,409,896
Sravan Emany
Senior Vice President, Chief
Financial Officer
2022 500,000 (7) 198,750 13,612 712,362
2021 28,846 200,000 2,300,100 46 2,528,992
2020
John Minardo
Senior Vice President, Chief
Legal Officer and Secretary
2022 493,635 1,734,155(8) 166,725 15,525 2,410,040
2021 191,827 250,000 2,595,002 105,037 6,427 3,148,293
2020
Jason Rickard
Senior Vice President, Chief
Operating Officer
2022 519,615 121,050(5) 2,312,209(9) 209,625 19,156 3,181,655
2021 492,589 121,050 2,519,901 327,600 18,090 3,479,230
2020 473,314 1,479,191 258,338 11,040 2,221,883
Michael Shetzline
Senior Vice President, Chief
Medical Officer, and Head of
Research and Drug
Development
2022 512,482 121,000(5) 2,080,982(10) 188,735 15,525 2,918,724
2021 483,447 121,000 1,727,931 285,405 18,090 2,635,873
2020 464,681 100,000 1,121,001 194,588 11,040 1,891,310
*
Messrs. Minardo and Emany joined the company in August 2021 and December 2021, respectively, and were therefore not named executive officers in 2020.
(1)
Salaries reported for 2022, 2021 and 2020 reflect amounts actually paid in 2022, 2021 and 2020, respectively (as opposed to annual base salary rates). Fiscal year 2020 included one more pay date than fiscal years 2022 and 2021.
(2)
Reflects the fair value of time-based RSU, PSU and stock option awards on the date of grant calculated in accordance with ASC 718. For a discussion of the assumptions used in the valuation of awards made in 2022, see Note 12 to our consolidated financial statements for the year ended December 31, 2022 included in our Annual Report on Form 10-K that we filed with the SEC on February 16, 2023. All values reported exclude the effects of potential forfeitures. With respect to the rTSR PSUs granted to the named executive officers in 2022, the aggregate grant date fair value was determined based on the probable outcome of the performance conditions associated with such awards (target) at the date of grant. Assuming the maximum level of performance (200%) is achieved, the aggregate grant date fair value of the PSUs granted in 2022 is as follows: $7,286,855 for Mr. McCourt, $1,987,321 for Mr. Minardo, $2,649,752 for Mr. Rickard, and $2,384,768 for Dr. Shetzline.
(3)
Consists of payments made under our annual cash bonus program for performance in the relevant year. For a description of bonuses paid in 2023 for performance in 2022, see the disclosure included elsewhere in this proxy statement under the caption Annual Cash Incentive Program for 2022 Performance.
(4)
For each executive officer, consists of matching contributions made under our 401(k) plan, as well as an amount attributable to remote work and fitness stipends. The 401(k) matching contributions for each named executive officer are as follows: $13,725 for Mr. McCourt, $11,813 for Mr. Emany, $13,725 for Mr. Minardo, $13,725 for Mr. Rickard, and $13,725 for Dr. Shetzline. Amounts for Messrs. McCourt and Rickard also include $2,593 and $3,632, respectively, for the incremental cost of gifts, spousal travel and attendance at certain Ironwood-sponsored events and meetings where the executives’ attendance was requested by the Company, as well as the value of gifts received; these amounts are inclusive of tax gross-ups of $1,150 and $1,610 paid to Messrs. McCourt and Rickard, respectively.
(5)
Reflects the portion of the cash retention bonus paid in 2022, pursuant to a cash retention program approved in March 2021, as described in our 2022 proxy statement, whereby 50% of the cash retention bonus was paid in September 2021 and 50% of the cash retention bonus was paid in June 2022, in each case, subject to continued employment.
(6)
Includes the aggregate grant date fair value of 248,869 RSUs and 248,868 PSUs awarded to Mr. McCourt in March 2022, in connection with annual equity awards.
 
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(7)
Mr. Emany was not eligible to receive an annual equity award as part of the company’s 2021 performance review cycle due to the substantial completion of fiscal year 2021 when he joined Ironwood in December 2021.
(8)
Includes the aggregate grant date fair value of 67,873 RSUs and 67,873 PSUs awarded to Mr. Minardo in March 2022, in connection with annual equity awards.
(9)
Includes the aggregate grant date fair value of 90,498 RSUs and 90,497 PSUs awarded to Mr. Rickard in March 2022, in connection with annual equity awards.
(10)
Includes the aggregate grant date fair value of 81,448 RSUs and 81,447 PSUs awarded to Dr. Shetzline in March 2022, in connection with annual equity awards.
 
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Grants of Plan-Based Awards
The following table sets forth information regarding non-equity and equity awards granted to each of our named executive officers during the year ended December 31, 2022. All non-equity incentive plan awards were made pursuant to our cash bonus program described in more detail elsewhere in this proxy statement under the caption Annual Cash Incentive Program for 2022 Performance.
We granted annual RSUs and PSUs to Messrs. McCourt, Minardo, Rickard and Dr. Shetzline in March 2022. Mr. Emany was not eligible to receive an annual equity award as part of the company’s 2021 performance review cycle due to the substantial completion of fiscal year 2021 when he joined Ironwood in December 2021.
All RSUs and PSUs granted in 2022 represented the right to receive shares of our Class A common stock upon the vesting of such awards. The vesting schedule of each such award included in the following table is described in the footnotes to the Outstanding Equity Awards at Fiscal Year-End table.
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Name
Grant Date
Estimated
Future Payouts
Under Non-Equity
Incentive Plan
Awards(1)
Target ($)
Estimated Future Payouts Under
Equity Incentive Plan Awards(2)(#)
All Other
Stock Awards:
Number of
Shares of
Stock or Units
(#)(3)
Grant Date
Fair Value of
Stock Awards
($)(4)
Threshold
Target
Maximum
Thomas McCourt
3/8/2022 248,869 $ 2,829,641
3/8/2022