Company: LGNZZ
Filing Date: 2025-04-22
Form Type: DEF 14A
Source: 0000886163-25-000025
Chunk: 42

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-04-22
Form: DEF 14A
Chunk 42
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 Equity Vehicles
We provide equity compensation to our named executive officers through grants of stock options, RSUs and PSUs. For 2024 annual award purposes, these equity vehicles were weighted at 40%, 27% and 33%, respectively.

• Time-based stock options granted to our named executive officers generally have a four-year vesting schedule designed to provide an incentive for continued employment, with a six-month vesting cliff and vesting in equal monthly increments thereafter. Options have a ten-year term and an exercise price equal to 100% of the fair market value of the underlying stock on the date of grant. Accordingly, options will provide a return to the executive officer only if the market price of the shares appreciates over the option term.

• Time-based restricted stock units generally vest in equal annual installments over three years.

• Performance stock units are a significant component of our annual long-term equity incentive awards for our named executive officers that vest based on key corporate and financial objectives over multi-year performance periods. At the time of grant, our Human Capital Management and Compensation Committee conducts a review of the performance measures and associated payout levels, the rigor of the performance goals and their alignment with performance. Our PSUs are structured with two staggered performance periods to provide our Human Capital Management and Compensation Committee the ability to design performance objectives that are tailored to specifically drive long-term stockholder value creation over varying time horizons. This staggered performance period design results in PSUs from two awards vesting each year and facilitates more diversity in performance objectives.

The Human Capital Management and Compensation Committee views granting equity awards as both a valuable retention device and a means to effectively align the interests of our named executive officers with our long-term objectives and stockholder interests. In line with the retention benefits of our equity awards, the Human Capital Management and Compensation Committee therefore also reviews the status of vesting and number of vested versus unvested awards at the time of grant. Guidelines for the number of equity awards granted to each executive officer are determined using a procedure approved by the Human Capital Management and Compensation Committee based upon several factors, including the executive officer’s level of responsibility, performance, retention power of previously granted equity awards, and the value of the equity awards at the time of grant. We emphasize long-term equity incentive compensation within our named executive officers' total target compensation opportunity. While we do not set target equity compensation at a specific level relative to our peer group, annual target equity opportunities may exceed the median of executive officers performing similar job functions at companies in our peer groups if the