Juno 2015 Annual Report Download - page 26

Table of Contents
Risk Assessment of Executive Officer Compensation
The Compensation Committee believes the various components of the total compensation package of the executive officers, as discussed above, are
appropriately balanced so as to avoid any excessive risk taking by such individuals. First, long-term equity awards tied to the market price of our common
stock represent a significant component of executive officer compensation and promote a commonality of interest between the executive officers and our
stockholders in increasing stockholder value. In addition, a portion of the equity awards made over the last several years has been in the form of restricted
stock units. The use of such restricted stock units mitigates the potential risk that stock options might otherwise pose to risk taking in the short term.
Restricted stock units provide varying levels of compensation as the market price of our common stock fluctuates over time, and they are less likely to
contribute to excessive risk taking. Furthermore, the equity awards, whether in the form of stock options or restricted stock unit awards, generally will vest
over a period of years, and that vesting element encourages the award recipients to focus on sustaining our long-term performance. Additionally, because
equity awards are typically made on an annual basis, the executive officers always have unvested awards outstanding that could decrease significantly in
value if our business is not managed to achieve its long-term goals.
Secondly, under the 2015 Bonus Plan, an individual target bonus amount is established for each executive officer at each level of potential goal
attainment. Accordingly, at all levels of performance goal attainment, there are limits in place for the potential bonus payout. In addition, a percentage of the
potential bonus payable under the 2015 Bonus Plan is tied to a set of individual performance goals. Lastly, a maximum bonus amount is established for each
participant such that no participant may earn more than a fixed percentage of his or her base salary.
Accordingly, our overall compensation structure is not overly-weighted toward short-term incentives, and the Compensation Committee has taken
what it believes are reasonable steps to protect against the potential of disproportionately large short-term incentives that might encourage excessive risk
taking.
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Our Insider Trading Policy prohibits, among other things, short-term or speculative transactions in our securities by our directors, officers and
employees, including, but not limited to, short sales of our stock and transactions in puts, calls or other derivative securities. The policy also prohibits our
directors, officers and employees from holding our securities in a margin account or pledging our securities as collateral for a loan. In addition, the policy
prohibits certain forms of hedging or monetization transactions, including through the use of financial instruments such as zero-cost collars and forward sale
contracts that are designed to hedge or offset any decrease in the market value of the Company’s securities.
In April 2015, the Board adopted stock ownership guidelines for the Chief Executive Officer, our other executive officers and our non-employee
directors. The stock ownership guidelines provide that executive officers and directors be meaningfully invested in the Company’s stock, and therefore be
personally invested in the Company’s performance to ensure strong alignment with stockholder interests. The executive officers and directors have five years
to come in to compliance with the stock ownership guidelines. The following table shows the applicable ownership amount under the stock ownership
guidelines:
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

Chief Executive Officer 2x annual base salary
Other executive officers 1x annual base salary
Non-employee directors 3x annual cash retainer(1)
(1) Excluding extra compensation for Chairman or Committee service.
Tax and Accounting Considerations
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Section 162(m) of the Code disallows a tax deduction to publicly-held companies for compensation paid to certain of their executive officers to the
extent such compensation exceeds $1.0 million per covered officer in any year. The limitation applies only to compensation that is not considered to be
performance-based under the terms of Section 162(m) of the Code.
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