Form 4: Xilio CEO's Options Repriced, New Grant Issued

Sentiment:

Insider Transaction Report 25 November 2025 4:10 PM

📋All filings for Xilio Therapeutics, INC

Xilio Therapeutics' CEO Rene Russo received a significant option repricing and a new stock option grant following stockholder approval of the 2025 Stock Incentive Plan.

Worse than expectedThe necessity of repricing a substantial number of stock options from original exercise prices as high as $16.00 down to $1.50 strongly indicates that the company's stock performance has been significantly worse than anticipated, causing previous incentive grants to lose their value.

Summary

Rene Russo, President and CEO of Xilio Therapeutics, Inc. (XLO), was granted 2,075,000 stock options with an exercise price of $0.841 per share.
These new options vest in 36 equal monthly installments over three years, beginning December 21, 2025, subject to continued service.
Additionally, a one-time option repricing, effective November 21, 2025, reduced the exercise price of 2,198,212 existing stock options to $1.50 per share.
The original exercise prices for these repriced options ranged from $2.69 to $16.00 per share.
The repricing applies unless an option is exercised prior to November 21, 2026, in which case the original exercise price must be paid.
The total number of derivative securities beneficially owned by Rene Russo following these transactions is 4,273,212 stock options.
The 2025 Stock Incentive Plan, under which the new options were granted and the repricing occurred, was approved by stockholders on November 21, 2025.

Sentiment

Score: 3

Explanation: The repricing of options from significantly higher strike prices to $1.50, along with a new grant at $0.841, reflects a substantial decline in the company's stock value. While it re-incentivizes the CEO, it signals poor past performance and potential dilution, which is generally negative for existing shareholders.

Positives

The CEO received a new grant of 2,075,000 stock options at a low exercise price of $0.841, providing significant potential upside.
Existing stock options totaling 2,198,212 shares were repriced to a lower exercise price of $1.50, significantly improving their in-the-money potential and re-incentivizing the CEO.
The repricing and new grant serve to re-align executive incentives with future stock performance, potentially aiding in retention of key leadership.

Negatives

The necessity of repricing options from significantly higher strike prices (up to $16.00) to $1.50 indicates a substantial decline in the company's stock value over time.
The issuance of new options and the repricing of existing ones could lead to increased potential dilution for existing shareholders if these options are exercised.

Future Outlook

The newly granted stock options will vest in 36 equal monthly installments over a three-year period beginning December 21, 2025, contingent on the CEO's continued service. The repriced options maintain their original vesting and expiration terms, with the new exercise price effective immediately, unless exercised before November 21, 2026.

Industry Context

Option repricing is a common strategy in the biotechnology and pharmaceutical industries, particularly for companies whose stock price has significantly underperformed, leading to 'underwater' options. This action aims to re-incentivize key executives and retain talent by restoring the motivational value of their equity compensation, aligning their interests with future stock appreciation.

Comparison to Industry Standards

Option repricing, while often viewed critically by investors, is a recognized mechanism in the biotech sector to address executive retention and motivation when stock prices decline significantly, rendering existing options worthless as incentives.
Many early-stage biotech companies, similar to Xilio Therapeutics, face volatile stock performance, making such compensation adjustments a recurring theme to maintain competitive executive packages against peers who may also be struggling or offering more attractive equity.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
New Incentive Plan Adoption	The Xilio Therapeutics, Inc. 2025 Stock Incentive Plan was approved by the Board of Directors on October 8, 2025, and subsequently by stockholders on November 21, 2025.	11/21/2025	This new plan provides the framework for future equity compensation, enabling the company to grant new options and adjust existing ones to incentivize and retain key personnel, particularly in response to market conditions affecting stock price.

Stakeholder Impact

Shareholders: Potential for future dilution from the exercise of new and repriced options. However, re-incentivized management could lead to improved future performance.
CEO (Rene Russo): Significantly enhanced potential compensation through lower exercise prices on existing options and a new grant at a very low strike price, improving motivation and retention.

Next Steps

The newly granted options will begin vesting in 36 equal monthly installments starting December 21, 2025.
The repriced options will continue to vest according to their original schedules, with the new $1.50 exercise price applicable unless exercised before November 21, 2026.

Key Dates

Date	Description
07/22/2030	Expiration date for certain repriced stock options.
03/10/2031	Expiration date for certain repriced stock options.
08/22/2031	Expiration date for certain repriced stock options.
10/20/2031	Expiration date for certain repriced stock options.
12/21/2031	Expiration date for certain repriced stock options; original grant date for 100,000 options was December 22, 2021, with vesting through December 1, 2025.
02/21/2031	Expiration date for certain repriced stock options; original grant date for 150,000 options was February 22, 2022, with vesting through February 1, 2026.
12/31/2032	Expiration date for certain repriced stock options; original grant date for 350,000 options was January 1, 2023, with vesting through January 1, 2027.
08/15/2033	Expiration date for certain repriced stock options.
10/08/2025	Board of Directors approved the adoption of the 2025 Stock Incentive Plan and Compensation Committee granted 2,075,000 options to the Reporting Person, subject to stockholder approval.
11/21/2025	Date of earliest transaction, effective date of option repricing, and date stockholders approved the adoption of the 2025 Stock Incentive Plan.
11/25/2025	Signature date of the reporting person's attorney-in-fact.
12/21/2025	Start date for the 36 equal monthly vesting installments for the newly granted 2,075,000 stock options.
11/21/2026	Date before which repriced options must be exercised at their original exercise price.
10/07/2035	Expiration date for the newly granted 2,075,000 stock options.

Recommendation

hold

The option repricing and new grant for the CEO present a mixed signal. While it reflects past stock underperformance, it's a strategic move to re-incentivize leadership and retain talent, which is crucial for future success in the biotech sector. Without further information on the company's pipeline, clinical progress, or financial health, a 'hold' recommendation is appropriate, acknowledging both the past challenges and the renewed executive alignment.

Keywords

Xilio Therapeutics, XLO, Rene Russo, Stock Option, Option Repricing, Executive Compensation, Incentive Plan, SEC Form 4, Beneficial Ownership

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