Form 4: Zymeworks COO Reports Equity Transactions

Zymeworks Inc.'s EVP & Chief Operating Officer, Mark Hollywood, reported the vesting of restricted stock units and the acquisition of new stock options and performance stock units, alongside a tax-related stock sale.

Summary

• Mark Hollywood, EVP & Chief Operating Officer of Zymeworks Inc., reported equity transactions on January 12, 2026.
• Hollywood acquired 17,666 shares of common stock upon the vesting of restricted stock units (RSUs) granted on January 10, 2025.
• He disposed of 6,120 shares of common stock at a weighted average price of $22.6735 to cover tax withholding obligations and other fees related to the RSU vesting.
• The sale was not a discretionary decision but a mandatory 'sell to cover' provision.
• Following these transactions, Hollywood beneficially owns 132,913 shares of common stock.
• Hollywood also acquired 70,000 stock options with an exercise price of $23.16, expiring on January 11, 2036.
• Additionally, he acquired 47,000 new Restricted Stock Units (RSUs) and 66,000 Performance Stock Units (PSUs).
• The 66,000 PSUs represent the maximum number that may be earned, with a target of 33,000, based on cumulative total shareholder return (TSR) goals over a three-year performance period ending January 12, 2029.

Sentiment

Score: 5

Explanation: The filing reports routine executive equity transactions, including vesting, a tax-related sale, and new grants, which are standard compensation practices and do not inherently indicate positive or negative company performance.

Positives

• The acquisition of 70,000 new stock options, 47,000 new Restricted Stock Units (RSUs), and 66,000 Performance Stock Units (PSUs) aligns the executive's interests with long-term shareholder value.
• The vesting of 17,666 RSUs demonstrates the realization of previously granted equity compensation.

Negatives

• The disposition of 6,120 shares, even for tax purposes, reduces the executive's direct beneficial ownership in the company.

Risks

• The Performance Stock Units (PSUs) are contingent on the achievement of certain cumulative total shareholder return (TSR) goals over a three-year performance period ending January 12, 2029, introducing performance-related risk.
• Vesting of PSUs is also contingent on the Reporting Person's continued service to the Company through the performance period and board certification of TSR goals, except in limited cases.

Future Outlook

The executive's equity awards include future vesting schedules for Restricted Stock Units (RSUs) and stock options, extending over several years. Performance Stock Units (PSUs) are tied to the company's total shareholder return (TSR) goals over a three-year period ending January 12, 2029, indicating a long-term performance incentive.

Management Comments

• The sale of 6,120 shares of common stock was solely to cover tax withholding obligations and other applicable fees in connection with the vesting of RSUs, pursuant to mandatory 'sell to cover' provisions, and does not represent a discretionary sale.

Industry Context

Executive compensation in the biotechnology industry frequently incorporates equity awards such as stock options, restricted stock units, and performance stock units. These instruments are designed to align the interests of management with those of shareholders by linking compensation to company performance and long-term value creation.

Corporate Governance

Stakeholder Impact

• Shareholders: Provides transparency regarding executive equity holdings and compensation, aligning executive incentives with shareholder value through performance-based awards.
• Employees: Reflects the company's compensation philosophy for senior management, which may influence broader compensation strategies.

Next Steps

• Continued vesting of the newly granted 47,000 RSUs in four equal annual installments beginning on the first anniversary of the grant date.
• Continued vesting of the 70,000 stock options, with 25% vesting on the first anniversary of the grant date and the remainder in 36 equal monthly installments.
• Assessment of the achievement of cumulative total shareholder return (TSR) goals for the 66,000 Performance Stock Units (PSUs) at the end of the three-year performance period on January 12, 2029.

Key Dates

Keywords

Zymeworks, ZYME, Form 4, Insider Transaction, Executive Compensation, Restricted Stock Units, Performance Stock Units, Stock Options, Equity Awards, Mark Hollywood