Drug discovery and development across a portfolio of many
drugs (currently 38 for Isis) is a long process that spans many years,
where decisions we make today can have a positive or negative
consequence five years, ten years, and even further into the future.
As such, it is essential we set goals that incentivize our employees
to execute our long-term strategy, because we believe our long-term
strategy should continue to reward our stockholders into the future.
For us to retain our technology leadership and effectively manage the technical complexity and broad scope
of our development pipeline, our most senior executives must advance multiple drug strategies and collaborative
partnerships in parallel and consistently over many years, versus emphasizing one or two at the expense of others
that deserve attention. As a result, other than stock price, we do not use financial-based metrics as objectives,
such as earnings per share, because financial metrics typically overly emphasize two or three annual business
metrics and ignore the complexity of the tasks we are undertaking. By taking this approach, we avoid the
temptation to deviate from creating fundamental long-term value to meet a short-termmetric.
We structure our corporate objectives so they are results driven rather than task driven. We typically include
a number of objectives that are based on achieving positive data in the clinic. For example, in 2014 we had a
corporate objective to advance our pipeline with one of the measures being to achieve positive data from three
Phase 2 studies. This type of objective only rewards our executives if the data are positive - we do this to
encourage the prudent spending of stockholder money on development decisions. In other words, we want to
structure our objectives to reward success based on judgment, rather than the making of ‘‘bad bets.’’
At the beginning of each year, we set aggressive corporate objectives that our Board approves. On at least a
quarterly basis, the Board evaluates our progress in achieving these objectives. We define excellent performance
as a year in which we have met most of our objectives.
Importance of Tenure; Our Investment in Knowledge-Rich Employees
It takes a significant period of time and a substantial investment to recruit and develop executives who
possess the experience and talent necessary to lead at Isis given our innovative technology, innovative business
strategy and complex drug development pipeline. Senior executives must have experience with all aspects of our
business to be effective leaders. Our drug technology is a ‘‘platform technology’’, which means the more
knowledge and experience an employee has with our technology platform, the better equipped she or he is to
create value at Isis. Given the uniqueness and complexity of our technology, it is critical to retain the knowledge
and experience of outstanding long service employees. The experience and seniority of our employees is critical
to our future success. For these reasons, it is our objective to attract and retain the best talent available and to
invest in those individuals who deliver long-term productivity.
•
Long tenure among a dedicated and highly skilled workforce, combined with the highest performance
standards, contributes to our leadership in the industry and serves the interests of stockholders.
•
Our focus on retention is coupled to a strong belief that executive talent most often should be
developed and promoted fromwithin Isis.
•
The long tenure of high-performing executive officers reflects this strategy at all levels of the
organization.
•
Our named executive officers, or NEOs, who served in 2014 have tenures at Isis ranging from
14 years to 26 years.
•
Our other officers who served in 2014 have on average 12 years of tenure at Isis.
•
Each of the executive officers has been carefully evaluated and selected through a rigorous performance
assessment process over a long career. In their current assignments, they remain subject to a
challenging annual performance assessment in which they must continue to meet the highest standards
or be reassigned or separated from the Company.
Given the uniqueness and
complexity of our technology, it is
critical to retain the knowledge
and experience of outstanding
long service employees.
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