Registered Number 11185179 (England & Wales)

Annual Report and Accounts

for the year ended 31 December 2021

for

Autolus Therapeutics plc

AUTOLUS THERAPEUTICS PLC

Introduction and Contents

Autolus Therapeutics plc (the “Company”, “Group” or “Parent Company”) is a public limited company incorporated under the laws of England and Wales and is listed on the Nasdaq Global Select Market (“NASDAQ”). The Company is a “quoted company” for the purposes of the Companies Act 2006 (the “Companies Act”).

This document (the “Annual Report and Accounts”) is comprised of the reports and consolidated financial statements listed below and the Annual Report on Form 20-F (the “Form 20-F”) filed with the United States Securities and Exchange Commission (the “SEC”) on 10 March 2022. For purposes of this Annual Report and Accounts, the exhibits to the Form 20-F are not incorporated by reference.

In this Annual Report and Accounts, unless the context otherwise indicates, references to the “Group”, “Autolus”, “we”, “us” or “our” include the Company and its wholly owned subsidiaries.

 

Company Information			3
Strategic Report			4
Directors’ Report			14
Directors’ Remuneration Report			22
Independent auditor’s report to the members of Autolus Therapeutics plc			48
Consolidated Income Statement and Other Comprehensive Loss			60
Consolidated Balance Sheet			61
Consolidated Statement of Changes in Equity			63
Consolidated Cash Flow Statement			64
Notes to the Consolidated Financial Statements			65
Parent Company Balance Sheet			117
Parent Company Statement of Changes in Equity			118
Notes to the Parent Company Financial Statements			119

 

2

AUTOLUS THERAPEUTICS PLC

 

Company Information

 

Directors		John Johnson, Chairman of the Board of Directors
		Christian Itin, Executive Director and CEO
		Joseph Anderson
		Jay Backstrom
		Linda Bain
		John Berriman
		Cynthia Butitta
		Kapil Dhingra
		Martin Murphy
		William Young
Secretary		Alex Driggs
Registered Office		The MediaWorks
		191 Wood Lane
		London W12 7FP
		United Kingdom
Registered Number		11185179
Auditors		Ernst & Young LLP
		R+
		Blagrave Street
		Reading RG1 1AZ
		United Kingdom
Bankers		Barclays Bank
		1 Church Street
		Peterborough PE1 1XE
		United Kingdom
Solicitors		Cooley (UK) LLP
		22 Bishopsgate
		London EC2N 4BQ
		United Kingdom

 

3

AUTOLUS THERAPEUTICS PLC

Strategic Report

For the 12 months ended 31 December 2021

 

Strategic Review Note

The directors (“Directors”) present their strategic report on the affairs of the Group (the “Strategic Report”), together with the financial statements for the 12 months ended 31 December 2021.

Principal Activity

We are a biopharmaceutical company developing next generation programmed T cell therapies for the treatment of cancer. Using our broad suite of proprietary and modular T cell programming technologies, we are engineering precisely targeted, controlled and highly active T cell therapies that are designed to better recognise cancer cells, break down their defence mechanisms and eliminate these cells. We believe our programmed T cell therapies have the potential to be best-in-class and offer cancer patients substantial benefits over the existing standard of care, including the potential for cure in some patients.

We are registered with the Registrar of Companies in England and Wales under number 11185179, and our registered office is at The MediaWorks, 191 Wood Lane, White City, London W12 7FP, United Kingdom.

Development of the Group

Autolus Therapeutics plc is a public limited company under the laws of England and Wales, originally incorporated under the laws of England and Wales in February 2018 as a private limited company called Autolus Therapeutics Limited. Autolus Limited was originally incorporated under the laws of England and Wales in July 2014. Pursuant to the terms of our corporate reorganisation, the shareholders of Autolus Limited exchanged each of the shares held by them in Autolus Limited for the same number and class of newly issued shares of Autolus Therapeutics Limited and, as a result, Autolus Limited became a wholly owned subsidiary of Autolus Therapeutics Limited. On 18 June 2018, Autolus Therapeutics Limited re-registered as a public limited company and was renamed Autolus Therapeutics plc. On 22 June 2018, our outstanding preferred and ordinary shares were converted into a single class of ordinary shares and various classes of deferred shares, and we completed our initial public offering of American Depositary Shares (“ADS’”), each representing one of our ordinary shares, on NASDAQ. On 25 April 2019, the Company changed its accounting reference date from 30 September to

31 December.    

The Company is not and has not been listed or had any securities listed in the U.K. or the European Union. To meet US reporting requirements, the Group is required to file periodic reports, including an annual report on Form 20-F (“20-F”) with the United States Securities and Exchange Commission (“SEC”). The financial statements included in the 20-F are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). These US GAAP financial statements have a reporting currency of U.S. Dollars.    

To meet United Kingdom (“UK”) statutory reporting requirements, the Company is required to file this Annual Report and Accounts with Companies House in the UK. The financial statements, which are included in this Annual Report and Accounts, are prepared in accordance with UK-adopted International Financial Reporting Standards (“IFRS”) using the functional and reporting currency of Pounds sterling. Due to the fact that much of the information required for the 20-F, which is filed with the SEC, and Annual Report and Accounts are the same, where the requirements of the Strategic Report and the Directors’ Report in accordance with the Companies Act have been met in the 20-F, details of this have been provided in table below and referenced to the 20-F accordingly. Additional requirements which are not met by the 20-F have been disclosed separately in each of the sections of this Annual Report and Accounts. The prior year’s 20-F, which includes a full set of financial statements for the comparative period of 1 January 2020 to 31 December 2020, was filed with the SEC on 4 March 2021. The current year 20-F, which included a full set of financial statements for the 12 months ending 31 December 2021, was filed with the SEC on 10 March 2022 and is included in Appendix 1.    

 

4

AUTOLUS THERAPEUTICS PLC

Strategic Report

For the 12 months ended 31 December 2021

 

The following table provides a guide to the 20-F content used for this report:

 

Required item in the Strategic Report		Where the information can be found in the 20-F
A fair review of the Group’s business, including the use of key performance indicators (“KPI’s”)		Part I: Item 4. Information on the Company Part I: Item 5. Operating and Financial Review and Prospects
		The Company has not utilised traditional KPI’s as there were no sales, an immaterial amount of out-licensing revenue, and no production of products for commercial sale in the 12 months ended 31 December 2021. The financial information reported in our 20-F is prepared in accordance with US GAAP and is the primary information reported to shareholders. Whilst different to the audited financial information reported in accordance with UK-adopted International Financial Reporting Standards included in this Annual Report and Accounts, we believe the information to be helpful as the Board use the US GAAP information when communicating with shareholders, other stakeholders and the market generally.
A description of the principal risks and uncertainties		Part I: Item 3D. Risks A summary of the principal risks is included below under the principal risk heading on page 11.
Description of the Group’s strategy		Part I: Item 4B. Business overview, and in particular:
		•  Development Strategy for Adult ALL
		•  Development Strategy for paediatric ALL
		•  Development Strategy for AUTO4
		•  Clinical Development Strategy of AUTO6NG
Description of the Group’s business model		Part I: Item 4B. Business Overview Part I: Item 4C. Organizational Structure
Main trends and factors likely to affect future development, performance and position of the Group’s business		Part I: Item 4B. Business Overview Part I: Item 5A. Operating Results Part I: Item 5B. Liquidity and Capital Resources See also the Financial review section below
Finance Review		See disclosure below
Corporate governance		Part I: Item 6C. Composition of Our Board of Directors
Information on environmental, diversity, equality, and human rights		See disclosures below
Principal risks and mitigations related to COVID-19		See disclosures below

 

5

AUTOLUS THERAPEUTICS PLC

Strategic Report

For the 12 months ended 31 December 2021

 

Financial review

Since our inception in July 2014, we have devoted substantially all our resources to conducting preclinical studies and clinical trials, organizing and staffing our company, business planning, raising capital and establishing our intellectual property portfolio. We do not have any products approved for sale and have not generated any revenue from product sales. We have funded our operations to date primarily with sales of our equity securities. As of 31 December 2021, we had received net proceeds of £567.4 million from sales of our equity securities, including a private placement of 17,985,611 ADSs representing 17,985,611 ordinary shares, at a private placement price of $5.56 per ADS to BXLS V—Autobahn L.P., or Blackstone, resulting in gross proceeds of $100 million and aggregate net proceeds of £72.6 million ($98.0 million), after offering expenses. We also received net proceeds of £36.6 million ($49.4 million), after allocated transaction costs, from strategic financing arising from the Blackstone Strategic Collaboration and Financing Agreement.

In September 2020, we entered into an Open Market Sale AgreementSM, or the “Sales Agreement”, with Jefferies LLC, or Jefferies, where we may offer and sell ADSs having an aggregate offering price of up to $100 million from time to time through Jefferies, acting as sales agent. As of the date of this Annual Report, we have sold an aggregate of 3,787,972 of our ADSs resulting in net proceeds of £21.6 million ($29.6 million). Further, in February 2021, we closed an underwritten public offering of 16,428,572 ADSs, including the exercise in full by the underwriters of their option to purchase an additional 2,142,857 ADSs, at a public offering price of $7.00 per ADS. We received net proceeds of £77.4 million ($106.9 million) after underwriting discounts. We do not expect to generate significant revenue unless and until we obtain marketing approval for and commercialise one of our product candidates.

Since our inception, we have incurred significant operating losses. For the 12 months ended 31 December 2021 and the 12 months ended 31 December 2020, we incurred net losses of £102.3 million and £113.1 million, respectively. As of 31 December 2021, we had a retained loss of £165.0 million.

Our £1.1 million of license revenue for the year ended 31 December 2021 relates to the grant of a license to ModernaTX Inc. during the year, compared to £0.2 million in license revenue relating to the grant of a license to an investee company of Syncona, our principal shareholder, for the year ended 31 December 2020.

Research and development expenses were £96.1 million for the 12 months ended 31 December 2021 as compared to £103.6 million for the 12 months period ended 31 December 2020, a decrease of £7.5 million.

The decrease is mainly related to decreases relating to:

 

•

£5.7 million in employee and compensation costs due to a combination of a reduction in workforce implemented in January 2021 and a lower share-based payment expense as a result of a lower fair value of options recognized during the period,

 

•

£5.3 million in clinical trial costs,

 

•

£1.6 million in legal, consulting and professional fees,

offset by increases of:

 

•

£1.2 million in purchased consumables used in the manufacturing of obe-cel in the FELIX study,

 

•

£1.4 million in facilities costs related to the continued scaling of manufacturing operations,

 

•

£2.5 million in depreciation and amortisation expense.

 

6

AUTOLUS THERAPEUTICS PLC

Strategic Report

For the 12 months ended 31 December 2021

 

Administrative expenses were £23.5 million for the 12 months ended 31 December 2021 as compared to £27.6 million for the 12 months ended 31 December 2020, a decrease of £4.1 million. The decrease is mainly related to decreases relating to:

 

•

£2.3 million in employee and compensation costs due to a combination of a reduction in workforce implemented in January 2021 and a lower share-based payment expense as a result of a lower fair value of options recognized during the period.

 

•

£1.2 million in depreciation and amortisation expense,

 

•

£0.7 million in commercial preparation costs,

 

•

£0.3 million in facility and related costs mainly due to the termination and exit of two of our leases during the year, • offset by an increase in director and officer insurance in IT infrastructure and support for information systems amounting to £0.4 million.

Other operating income has increased primarily due to gains on termination of leases amounting to £2.6 million and £1.5 million lease termination fees received during the year ended 31 December 2021, arising from the termination and exit of two our leases. These gains on termination of leases have been offset by a reduction in grant income compared to the twelve-months ended 31 December 2020.

Other operating expense has increased by £2.3 million primarily due to disposals of property, plant and equipment linked to the termination and exit of two of our leases.

We expect to continue to incur significant expenses for the foreseeable future as we advance our product candidates through preclinical and clinical development, seek regulatory approval and pursue commercialisation of any approved product candidates. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialisation expenses related to product manufacturing, marketing, sales and distribution. In addition, we may incur expenses in connection with the in-licence or acquisition of additional product candidates. Furthermore, we have incurred and expect to continue to incur, additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favourable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialisation of one or more of our drug candidates or delay our pursuit of potential in-licences or acquisitions.

As of 31 December 2021, the Group had cash and cash equivalents of £229.7 million and net current assets of £230.6 million. The Group did not generate positive operational cash flow which was largely due to the continuing focus on the research, preclinical and clinical development, as well as supportive activities to advance the programs within the Group’s pipeline. The Group’s operations are financed primarily through sales of equity securities, reimbursable U.K. research and development tax credits and receipts from the U.K. government, and more recently through strategic financing. During the year ended 31 December 2021, the Group raised aggregated net proceeds of £171.6 million, £36.6 million and £18.1 million from the sale of equity securities, strategic financing and reimbursable U.K. research and development tax credits and receipts from the U.K. government, respectively.

 

7

AUTOLUS THERAPEUTICS PLC

Strategic Report

For the 12 months ended 31 December 2021

 

In assessing the going concern assumptions, the Board has undertaken a rigorous assessment of the detailed cash flow forecasts covering a going concern period up to 31 May 2023. The Board has also considered the Group’s objectives and strategy, its principal risks and uncertainties in achieving its objectives and its review of business performance and financial position.

The Board prepare its budgets on an annual basis, based on a 12-month period, and monitor the budget throughout this period by trueing up and reforecasting in two cycles. The budget which forms the basis of the going concern assessment is built on forecasted costs, with the biggest constituent being development spend related to the Group’s ongoing Phase 2 FELIX study including the manufacturing capabilities thereof and associated headcount costs. These types of costs are, in the most part, known and relatively predictable. Within the going concern period, the Board have assumed certain forecasted cash receipts in the shape of development and regulatory milestones and receipt of a U.K. research and development tax credit, which contribute to the Group’s base assumptions on the Company’s expected cash runway.

For prudence, the Board have also considered certain risk factors related to the Company’s base budgetary assumptions. These risk factors, which were factored into a sensitivity analysis for a reasonable worst case downside scenario, include a clinical program delay, inflationary increases in forecasted costs and also non-receipt of forecasted milestone payments and the expected reimbursable U.K. research and development tax credits. Under each of these scenarios the business remained a going concern. In addition, there are certain countermeasures and levers have been identified such as headcount cost reductions, cost delay initiatives and utilisation of available capital funding, which could be implemented to give flexibility in managing the Company’s cash runway. All scenarios result in a sufficient coverage above the twelve-month horizon from the date of issuance of the financial statements.

As part of considering the scenarios and downside risks, the Board has assessed the impact of the ongoing coronavirus 2019 (‘‘COVID-19’’) pandemic. Whilst it is difficult to estimate the impact of COVID-19 pandemic due to the rapidly changing nature of the pandemic the Board has concluded that it will not have a significant negative impact on the cash outflows of the Group over the period assessed for going concern purposes. The Board also performed a detailed impact assessment the war in Ukraine and sanctions imposed on Russia may have on the Group’s operations. No significant impact has been identified on the Group’s operations.

Consequently, the Board concluded that with its existing cash of £229.7 million it can fund operations for at least until 31 May 2023 and as such has prepared the consolidated financial statements on the going concern basis. As the Group continues to incur losses, the transition to profitability is dependent upon the successful development, approval and commercialisation of its product candidates and achieving a level of revenues adequate to support its cost structure.

Further details regarding the risks to the Group can be found in the Strategic Report (including the Finance Review and Principal risks).

Business Update

Program Prioritization and Corporate Adjustments

In January 2021, we announced the restructuring of our R&D strategy to prioritize the obe-cel (AUTO1) program. We also announced an adjustment of our workforce and infrastructure footprint during the first quarter of 2021, which involved an overall reduction in headcount of approximately 20%.

 

8

AUTOLUS THERAPEUTICS PLC

Strategic Report

For the 12 months ended 31 December 2021

 

Blackstone Agreements

On 6 November 2021, the Group concurrently entered into a (i) Strategic Collaboration and Financing Agreement, (the “Blackstone Collaboration Agreement”), (ii) Securities Purchase Agreement (the “Blackstone Securities Purchase Agreement”), and (iii) Warrant Agreement (the “Blackstone Warrant”) and (iv) a Registration Rights Agreement (the “Blackstone Registration Rights Agreement”), collectively called the “Blackstone Agreements”, with BXLS V - Autobahn L.P, (“Blackstone”). The Blackstone Agreements were entered into and in contemplation of one another and, accordingly, the Group assessed the accounting for these agreements in the aggregate.

Blackstone Collaboration Agreement

Pursuant to the Blackstone Collaboration Agreement, Blackstone agreed to pay us up to $150 million to support the continued development of the Group’s CD19 CAR T cell investigational therapy product candidate, obecabtagene autoleucel (obe-cel), as well as next generation product therapies of obe-cel in B-cell malignancies. The first $50 million has been paid by Blackstone as an upfront payment and the remainder (up to $100 million) will be payable based on certain specified clinical, manufacturing and regulatory milestones (each such payment, a “Blackstone Development Payment” and collectively, the “Blackstone Development Payments”). For further details of the Blackstone Collaboration Agreement, refer to Note 20, “Liability related to future sale of royalties and sales milestones, net”.

Blackstone Securities Purchase Agreement

Pursuant to the Blackstone Securities Purchase Agreement, the Group sold 17,985,611 ADSs representing 17,985,611 ordinary shares, at a private placement price of $5.56 per ADS to Blackstone resulting in gross proceeds of $100 million. The Group received aggregate net proceeds of £72.6 million, ($98.0 million), after offering expenses. Pursuant to the Blackstone Registration Rights Agreement, the Group filed a registration statement with the Securities and Exchange Commission (the “SEC”) that became effective on 28 April 2022.

Blackstone Warrant Agreement

Pursuant to the Blackstone Warrant, the Group issued Blackstone a warrant to purchase up to 3,265,306 ADSs representing 3,265,306 of the Group’s ordinary shares, at an exercise price of $7.35 per ADS. The Blackstone Warrant is exercisable in whole or in part until 6 November 2026. For further details on the Warrant Agreement, refer to Note 21, “Warrants derivative liability”.

Impact of COVID-19 Pandemic

While the Group has not experienced any significant financial impact to date, as a result of the ongoing coronavirus 2019 (“COVID-19”) pandemic, the overall disruption caused by the COVID-19 pandemic on global healthcare systems, and the other risks and uncertainties associated with the pandemic, could cause its business, financial condition, results of operations and growth prospects to be materially adversely affected.

The Group implemented a COVID-19 surveillance testing program available to Group staff who work on-site at the Group’s U.K. facility to minimize the spread of COVID-19 pandemic within the Group. The Group continues to track COVID-19 developments in Europe and the United States closely for their potential impact on the Group’s clinical trial sites, contract research organizations, logistics and supply chain to ensure it can continue to maintain clinical trial conduct and data integrity. As the patients in the Group’s clinical trials are severely immune suppressed as a consequence of their underlying disease and the treatment they receive in the trials, the Group is also monitoring other transmissible infectious diseases, including influenza.

 

9

AUTOLUS THERAPEUTICS PLC

Strategic Report

For the 12 months ended 31 December 2021

 

The Group is not aware of any specific event or circumstance that has impacted its operations in a manner which would require the Group to update its estimates, judgments or revise the carrying value of its assets or liabilities during the twelve-months ended 31 December 2021. However, these estimates may change, as new events occur and additional information is obtained, relating to the COVID-19 pandemic or otherwise. Changes in estimates would be recognized in the unaudited condensed consolidated financial statements as soon as they become known.

Impact of war in Ukraine and sanctions imposed on Russia

The Group has performed a detailed impact assessment the war in Ukraine and sanctions imposed on Russia may have on the Group’s operations. No significant impact has been identified on the Group’s operations.

Corporate governance; Section 172(1) Statement

Section 172 of the Companies Act 2006 requires directors to act in the way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of shareholders as a whole, with regard (amongst other matters) to:

 

•

the likely consequences of any decision in the long-term;

 

•

the interests of the Company’s employees;

 

•

the need to foster the Company’s business relationships with suppliers, customers and others;

 

•

the impact of the Company’s operations on the community and the environment;

 

•

the desirability of the Company maintaining a reputation for high standards of business conduct; and

 

•

the need to act fairly towards all shareholders of the Company.

Our directors are advised and updated on their responsibilities under Section 172 by our Company Secretary and our external legal advisors, each of whom regularly attend meetings of the Board. The Board is responsible for the Group’s corporate governance policies and recognises the importance of this in sustaining and growing the business. The Board is committed to listening to and communicating openly with our shareholders to ensure our strategy and performance are clearly understood. Understanding what investors and analysts think about us and helping them to understand our business is a key part of driving our business forward. We engage with our shareholders through quarterly earnings calls and our Annual General Meeting, as well as through private meetings with institutional holders. Shareholders are encouraged to contact our Investor Relations team, whose contact information is included on each press release, to provide feedback on the Group’s strategy, governance and implementation. Shareholder opinions are regularly taken into consideration by the Group’s directors.

Our directors provide strategic insight and guidance regarding key corporate decisions, taking into account the factors described above. Everything we do in the Group, from the break room to the boardroom, is driven by our Autolus values, described in the section of the Directors’ Report entitled “Employee engagement culture and values”. These core principles—Focus, Respect, Integrity and Breakthrough—inform and support our directors as they provide guidance and oversight to our efforts to bring innovative, safe and effective therapies to cancer patients.

Throughout the year, our directors embodied these key values in the performance of their duties, by considering the interests of a range of stakeholders and tailoring their recommendations accordingly. For example, in connection with our negotiation and execution of the Collaboration and Financing Agreement and Securities Purchase Agreement with Blackstone, the directors evaluated, amongst other matters, the dilutive effects of the sale on existing shareholders, the long-term benefits to shareholders of establishing a collaborative partnership with Blackstone, and the positive impact on additional patients whose participation in clinical trials would be enabled by the incoming funds.

 

10

AUTOLUS THERAPEUTICS PLC

Strategic Report

For the 12 months ended 31 December 2021

 

When assessing our facility needs—including our expanding footprint in the Stevenage, UK area—the directors considered input from our interactions with local government officials, representing one of the communities where we operate, and employees.

The section of the Directors’ Report entitled “Engagement with suppliers, customers and others” provides additional information on our directors’ consideration of those stakeholders.

Environmental matters

The Group leases all its facilities, manufactures its own products for clinical studies, and stores manufacturing consumable products. The Group also complies with all applicable environmental laws and regulations. We take positive steps to reduce our carbon footprint, where possible, and make efforts to be a responsible member of the communities in which we work. For a full report on the carbon emissions for the Group please see “Carbon Emissions” in the Directors’ Report.

Climate change has been identified as an emerging risk area requiring greater analysis. The directors are in the process of introducing a sustainability strategy which will includes climate change. The further analysis of climate change will take into account potential impact on our business and supply chain.

Building a healthy, high performing organisation

During 2021, we extended the support we provide to employees in our ambition to build a healthy, high performing organisation consistent with our purpose and values. The pandemic has challenged personal resilience and we plan to focus on energising and fully engaging the organisation to support the achievement of our business objectives. Our commitment is to the development of each and every individual, our teams and the organisation as a whole. Initiatives conducted during 2021 included the following:

 

•

Individual Development: We extended and enhanced the Autolus webinar programme, informed by a Training Needs Analysis conducted in December 2020, and increased the targeted use of online learning.

 

•

Team Development: In March 2021 we launched our first Leadership Development & Management programme and delivered further programmes in the second half of the year. We have invested in resilience coaching and have already started delivering team resilience sessions using the Workplace Resilience & Well-being (WRAW) psychometric instrument.

 

•

Organisation Development: In June 2021 we conducted an organisation-wide resilience and well-being assessment to identify pressure points and hotspots where support may be needed. We continue to further embed and reinforce the Autolus values in all that we do and ensuring that all employees understand how Autolus functions and project teams work together to deliver value to our patients.

Diversity & Equality

Diversity and Inclusion is integral to our growth strategy and aligns with the Group’s values of integrity and respect. The Group recognises that by valuing and promoting a culture of diversity and inclusion, it enables employees to contribute their unique perspectives and fully leverages their individual talents. This allows employees to fully engage in their work and helps generate the innovative thinking that is needed for the Group to fulfil its mission.

The Group strives to ensure that we offer a great place to work, grow and succeed. We recognise that to attract and retain talented colleagues we need to promote equal opportunity and a harmonious working environment.

 

11

AUTOLUS THERAPEUTICS PLC

Strategic Report

For the 12 months ended 31 December 2021

 

Our Diversity, Inclusion and Belonging employee resource group has reviewed and contributed to the Group-wide diversity, equality and dignity at work policy, and the Group aims to enhance this culture by training and awareness in the principles of diversity and inclusion.

Aligned with our open and transparent culture comprised of diverse teams and reflective of the global community we continue to support our first employee-led networking group called Diverse Individuals Celebrating Equality (D.I.C.E.) and welcome other groups to form.

Appointments within the Group are made on merit according to the balance of skills and experience offered by prospective candidates. Whilst acknowledging the benefits of diversity, individual appointments are made irrespective of personal characteristics such as race, disability, gender, sexual orientation, religion or age.

A breakdown of the employment statistics as of 31 December 2021 is as follows:

 

Position		Male				Female				Total
Non-executive Directors of the Group			7				2				9
Senior managers of the Group			14				6				20
All employees of the Group			162				142				304
Total Employees			183				150				333

Anti-bribery

The Group has made a commitment to carry out its business fairly, honestly and openly. Accordingly, our Anti-Bribery Policy mandates zero tolerance of bribery or corruption by any Group personnel or intermediaries and requires compliance with our various internal controls. We have established secure, anonymous means for our employees to report actual or suspected violations of this important policy.

Principal risks

Our business is subject to a number of risks and uncertainties, including those risks discussed at-length in the section titled “Risk Factors” of our Annual Report on Form 20-F filed with the SEC. These risks include, among others, the following:

 

•

The ongoing COVID-19 pandemic has impacted, and could materially and adversely affect, our business, results of operations and financial condition.

 

•

The ongoing conflict in Ukraine and sanctions imposed on Russia could materially and adversely affect, our business, results of operations and financial condition.

 

•

We have incurred significant losses in every year since our inception. We expect to continue to incur losses over the next several years and may never achieve or maintain profitability.

 

•

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

 

•

We will need additional funding to complete the development of our product candidates, which may not be available on acceptable terms, if at all.

 

•

All of our product candidates are in clinical development or in preclinical development. If we are unable to advance our product candidates through clinical development, obtain regulatory approval and ultimately commercialise our product candidates, or experience significant delays in doing so, our business will be materially harmed.

 

•

Our proprietary, next-generation T cell programming technologies, our modular approach for engineering T cells and our manufacturing platform for our programmed T cell product candidates, represent emerging approaches to cancer treatment that face significant challenges and hurdles.

 

12

AUTOLUS THERAPEUTICS PLC

Strategic Report

For the 12 months ended 31 December 2021

 

•

Our future success is highly dependent on the regulatory approval of our current clinical-stage programmed T cell product candidates and our preclinical programs. All of our product candidates will require significant clinical or preclinical testing before we can seek regulatory approval for and launch a product commercially.

 

•

Adverse side effects or other safety risks associated with our product candidates could delay or preclude approval, cause us to suspend or discontinue clinical trials, cause us to abandon product candidates, could limit the commercial profile of an approved label, or could result in significant negative consequences following any potential marketing approval.

 

•

If the clinical trials of any of our product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA, the EMA or other comparable regulatory authorities, or do not otherwise produce favourable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialisation of our product candidates.

 

•

We may not be able to successfully create our own manufacturing infrastructure for supply of our requirements of programmed T cell product candidates for use in clinical trials and for commercial sale.

 

•

Our product candidates are biologics and the manufacture of our product candidates is complex and we may encounter difficulties in production, particularly with respect to process development or scaling-out of our manufacturing capabilities. If we encounter such difficulties, our ability to provide supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or stopped.

 

•

We operate in a rapidly changing industry and face significant competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

 

•

If we are unable to obtain and maintain patent protection for our T cell programming technologies and product candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialise technology and biologics similar or identical to ours, and our ability to successfully commercialise our technology and product candidates may be impaired.

 

•

As an English public limited company, certain capital structure decisions will require shareholder approval, which may limit our flexibility to manage our capital structure.

Approved by the Board and signed on its behalf by:

 

/s/ Christian Itin

Christian Itin – Director and CEO

 

Date: 30 May 2022

Registered Office: The MediaWorks, 191 Wood Lane, London W12 7FP, United Kingdom

 

13

AUTOLUS THERAPEUTICS PLC

Directors’ Report

For the 12 months ended 31 December 2021

 

The Directors present their report for the 12-month period ended 31 December 2021 (the “Directors’ Report”). Autolus Therapeutics plc is a public limited company under the laws of England and Wales, originally incorporated under the laws of England and Wales in February 2018 as a private limited company called Autolus Therapeutics Limited. Autolus Limited was originally incorporated under the laws of England and Wales in July 2014. Pursuant to the terms of our corporate reorganisation, the shareholders of Autolus Limited exchanged each of the shares held by them in Autolus Limited for the same number and class of newly issued shares of Autolus Therapeutics Limited and, as a result, Autolus Limited became a wholly owned subsidiary of Autolus Therapeutics Limited. On 18 June 2018, Autolus Therapeutics Limited re-registered as a public limited company and was renamed Autolus Therapeutics plc. On 22 June 2018, our outstanding preferred and ordinary shares were converted into a single class of ordinary shares and various classes of deferred shares, and we completed our initial public offering of ADS’, each representing one of our ordinary shares, on NASDAQ. On 25 April 2019, the Company changed its accounting reference date from 30 September to 31 December.

As noted under “Development of the Group” from within the Strategic Report, where the requirements of the Directors’ Report in accordance with the Companies Act have been met in the 20-F, details of this have been provided in tables and referenced to the 20-F accordingly. Additional requirements which are not met by the 20-F have been disclosed separately in this Directors’ Report. The prior year’s 20-F, which includes a full set of financial statements for the comparative period of 1 January 2020 to 31 December 2020, was filed with the SEC on 4 March 2021. The current year 20-F, which includes a full set of financial statements for the 12 months ending 31 December 2021, was filed with the SEC on 10 March 2022 and is included in Appendix 1.    

The following table provides a guide to the 20-F content used for this report:

 

Required item in the Directors’ Report		Group response and where the information can be found in the 20-F, as applicable
Describe the principal activities of the Group		Part I: Item 4. Information on the Company
Indication of likely future developments of the Group’s business		Part I: Item 4B. Business Overview Part I: Item 5A. Operating Results Part I: Item 5B. Liquidity and Capital Resources
The amount (if any) of recommended dividend		Part I: Item 8. Dividend Policy Not applicable – the Directors do not recommend the payment of a dividend
Indication of the Group’s research and development activities		Part I: Item 4B. Business overview Part I: Item 5A. Components of Our Results of Operations: Operating Expenses – Research and Development Expenses
		Part I: Item 5C. Research and development, patents and licenses, etc.
Disclosure on purchases of own shares		Part III: Item 17. Consolidated Statement of Changes in Equity of the Group Not applicable – there have been no purchases of own shares in the 12-month period ended 31 December 2021
Important post balance sheet events requiring disclosure		Part III: Item 17 Note 18 Subsequent Events See also Note 28 to the financial statements.
Particulars of any political donations and political expenditure		Not applicable – no political donations were made, and no political expenditure was incurred, by the Group in the 12-month period ended 31 December 2021
Statements on any non-EU political party contribution		Not applicable – no contributions were made to any non-EU political party by the Group in the 12-month period ended 31 December 2021

 

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AUTOLUS THERAPEUTICS PLC

Directors’ Report

For the 12 months ended 31 December 2021

 

Required item in the Directors’ Report		Group response and where the information can be found in the 20-F, as applicable
The financial risk management objectives and policies for the Group, including the policy for hedging each major type of forecasted transaction for which hedge accounting is used.		Part I: Item 5B. Liquidity and Capital Resources Part I: Item 11. Quantitative and Qualitative Disclosures about Market Risk   The Group does not hedge any type of forecasted transaction and does not apply hedge accounting
Price risk exposure		Part I: Item 3D. Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters – Our product candidates are subject to government price controls in certain jurisdictions that may affect our revenue Part I: Item 3D. Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters – Risks Related to Ownership of Our Securities and Our Status as a Public Company   Part I: Item 3D. Risks Related to Regulatory approval of Our Product Candidates and Other Legal Compliance Matters - Recently enacted and future legislation in the United States and other countries may affect the prices we may obtain for our product candidates and increase the difficulty and cost for us to commercialise our product candidates
Credit risk exposure		Part III: Notes to the Consolidated Financial Statements: Note 2. Summary of Significant Accounting Policies – Concentration of Credit Risk
		See also Note 23 to the financial statements
Liquidity risk exposure		Part I: Item 5B. Liquidity and Capital Resources
Exchange rate and cash flow risk		Part I: Item 3D. Risks Related to Our Financial Position and Need for Capital: Exchange rate fluctuations may materially affect our results of operations and financial condition.
		Part I: Item 11. Foreign Exchange Currency Risk
		Part III: Notes to the Consolidated Financial Statements: Note 2. Summary of Significant Accounting Policies – Foreign Currency Translation
Branches outside the UK		Part I: Item 4C. Organizational Structure
Names of all directors		Part I: Item 6A. Directors and Senior Management
		Also disclosed below
Going Concern		See disclosure below
The quantity of emissions of carbon dioxide equivalent from activities for which the group is responsible		See disclosure below
Information about actions taken during the year to keep employees informed, regularly consulted, involved in performance through share schemes or other means, and aware of financial and economic factors affecting the company.		See disclosure below

 

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AUTOLUS THERAPEUTICS PLC

Directors’ Report

For the 12 months ended 31 December 2021

 

Required item in the Directors’ Report		Group response and where the information can be found in the 20-F, as applicable
State how directors have engaged with employees, and the effect of their regard for employee interests on principal decisions taken by the company.		See disclosure below
Directors’ indemnities		The Company has made qualifying third-party indemnity provisions for the benefit of its Directors which remain in force at the date of this Directors’ Report
Annual General Meeting		The AGM will be held on 28 June 2022. Further details will be provided in due course
Disclosure of information to auditors and appointment of auditors		See disclosure below

Directors

The directors who served during the year were as follows:

 

Christian Martin Itin		Appointed 15th June 2018
Joseph Anderson		Appointed 15th June 2018
Jay Backstrom		Appointed 1st August 2020
Linda Catharina Bain		Appointed 15th June 2018
John Berriman		Appointed 15th June 2018
Cynthia Marie Butitta		Appointed 15th June 2018
Kapil Dhingra		Appointed 15th June 2018
Martin Patrick Murphy		Appointed 14th June 2018
John Johnson		Appointed 15th September 2021
William Young		Appointed 6th November 2021

Going Concern

As of 31 December 2021, the Group had cash and cash equivalents of £229.7 million and net current assets of £230.6 million. The Group did not generate positive operational cash flow which was largely due to the continuing focus on the research, preclinical and clinical development, as well as supportive activities to advance the programs within the Group’s pipeline. The Group’s operations are financed primarily through sales of equity securities, reimbursable U.K. research and development tax credits and receipts from the U.K. government, and more recently through strategic financing. During the year ended 31 December 2021, the Group raised aggregated net proceeds of £171.6 million, £36.6 million and £18.1 million from the sale of equity securities, strategic financing and reimbursable U.K. research and development tax credits and receipts from the U.K. government, respectively.

In assessing the going concern assumptions, the Board has undertaken a rigorous assessment of the detailed cash flow forecasts covering a going concern period up to 31 May 2023. The Board has also considered the Group’s objectives and strategy, its principal risks and uncertainties in achieving its objectives and its review of business performance and financial position.

 

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AUTOLUS THERAPEUTICS PLC

Directors’ Report

For the 12 months ended 31 December 2021

 

The Board prepare its budgets on an annual basis, based on a 12-month period, and monitor the budget throughout this period by trueing up and reforecasting in two cycles. The budget which forms the basis of the going concern assessment is built on forecasted costs, with the biggest constituent being development spend related to the Group’s ongoing Phase 2 FELIX study including the manufacturing capabilities thereof and associated headcount costs. These types of costs are, in the most part, known and relatively predictable. Within the going concern period, the Board have assumed certain forecasted cash receipts in the shape of development and regulatory milestones and receipt of a U.K. research and development tax credit, which contribute to the Group’s base assumptions on the Company’s expected cash runway.

For prudence, the Board have also considered certain risk factors related to the Group’s base budgetary assumptions. These risk factors, which were factored into a sensitivity analysis for a reasonable worst case downside scenario, include a clinical program delay, inflationary increases in forecasted costs and also non-receipt of forecasted milestone payments and the expected reimbursable U.K. research and development tax credits. Under each of these scenarios the business remained a going concern.

In addition, there are certain countermeasures and levers have been identified such as headcount cost reductions, cost delay initiatives and utilisation of available capital funding, which could be implemented to give flexibility in managing the Company’s cash runway. All scenarios result in a sufficient coverage above the twelve-month horizon from the date of issuance of the financial statements.

As part of considering the scenarios and downside risks, the Board has assessed the impact of the ongoing coronavirus 2019 (‘‘COVID-19’’) pandemic. Whilst it is difficult to estimate the impact of COVID-19 pandemic due to the rapidly changing nature of the pandemic the Board has concluded that it will not have a significant negative impact on the cash outflows of the Group over the period assessed for going concern purposes. The Board also performed a detailed impact assessment the war in Ukraine and sanctions imposed on Russia may have on the Group’s operations. No significant impact has been identified on the Group’s operations.

Consequently, the Board concluded that with its existing cash of £229.7 million it can fund operations for at least until 31 May 2023 and as such has prepared the consolidated financial statements on the going concern basis. As the Group continues to incur losses, the transition to profitability is dependent upon the successful development, approval and commercialisation of its product candidates and achieving a level of revenues adequate to support its cost structure.

Further details regarding the risks to the Group can be found in the Strategic Report (including the Finance Review and Principal risks).

Carbon Emissions

This annual report for the 12 months ended 31 December 2021 is the third annual report in which the Group is reporting its carbon emissions footprint.

The carbon footprint for the Group for the 12 months ended 31 December 2021 and the 12 months ended

31 December 2020 is as follows:

 

		12 months ended 31 December 2021								12 months ended 31 December 2020
Scope		KgCO2e				% Total Emissions				KgCO2e				% Total Emissions
Scope 1			9,613				1	%			4,531				1	%
Scope 2			406,637				42	%			221,727				49	%
Scope 3			544,783				57	%			223,496				50	%
Total			961,033				100	%			449,754				100	%

 

17

AUTOLUS THERAPEUTICS PLC

Directors’ Report

For the 12 months ended 31 December 2021

 

		12 months ended 31 December 2021								12 months ended 31 December 2020
Scope		KgCO2e				% Total Emissions				KgCO2e				% Total Emissions
Scope 1			9,613				1	%			4,531				1	%
Scope 2			406,637				42	%			221,727				49	%
Scope 3			544,783				57	%			223,496				50	%
Total			961,033				100	%			449,754				100	%

For the 12 months ended 31 December 2021, the split of emissions by geography is as follows:

 

Scope		Location		Emissions Source				Emissions (kgCO2e)
Scope 1		UK			9,613				1	%
		UK			316,194				33	%
Scope 2		US			90,443				9	%
		UK			357,115				37	%
Scope 3		US			187,668				20	%
Total					961,033				100	%

For clarity, scope 1 emissions are direct emissions produced by the burning of fuels. Scope 2 emissions are indirect emissions related to the generation of the electricity consumed and purchased by Autolus. Scope 3 emissions are indirect emissions produced by Autolus activity, but these emissions are not owned or controlled by the Group. For Autolus, the majority of scope 3 emissions relate to business travel.

The organisational footprint of the Group is calculated in accordance with the Green House Gas protocol for corporate accounting using an organisational control approach. Scope 2 emissions are calculated using the location-based methodology. Scope 3 emissions are calculated for Business Travel only, in accordance with the Green House Gas protocol for corporate accounting using a distance-based method.

The directors are in the process of introducing a sustainability strategy which will include strategies how to reduce our energy consumption and thereby reducing our carbon footprint.

Employee engagement, culture and values

A strong internal communications programme has been launched and will continue to be developed to support and enhance employee engagement. This programme includes the following activities:

 

•

Maintenance of company intranet

 

•

Continued focus on CEO-led employee meetings for managers

 

•

Lunch and learns

 

•

All company meetings

 

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AUTOLUS THERAPEUTICS PLC

Directors’ Report

For the 12 months ended 31 December 2021

 

Our Autolus values and purpose are embedded into our processes including talent acquisition, performance management and development activities.

 

The Company has set up various methods to positively engage with staff at all its locations, and employee surveys have been introduced across some areas of the business to look at ways of working and optimising team building. One such area that has been addressed regards employee recognition. During 2020 the framework and structure of an all-employee recognition programme was agreed. The awards range from on-the-spot individual awards for consistent over performance to team awards when important project team KPIs are achieved. The programme launched in March 2021.

Talent Acquisition: delivering capability

Talent Acquisition

During 2021, 125 hires were completed. The primary focus for 2021 was right-sizing manufacturing capacity to support the Phase 2 pivotal Obe-cel trial, whilst also resourcing the start of the build-out of the new Nucleus manufacturing facility. Additionally in the second half of 2022, a number of leadership hires were expedited within the Development functions to ensure BLA readiness.

Early engagement with candidates was achieved through a direct sourcing strategy with 4 out of 5 hires being identified directly by our in-house function and with an average time to hire of 44 days, well below market average. Notable leadership hires included:

 

•

Chief Development Officer

 

•

Head of Clinical Development

 

•

Head of Cell Process Development

 

•

Head of Vector Development

 

•

Head of CMC Process Development

Underpinning all of the above activities is a comprehensive employee benefits offering. The programmes are bespoke to each jurisdiction and based on market practice. Employees are offered participation in retirement plans as well as medical and life insurance. Levels of benefit are continually benchmarked to ensure they offer optimal value for money for both the organisation and our employees.

 

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AUTOLUS THERAPEUTICS PLC

Directors’ Report

For the 12 months ended 31 December 2021

 

Disabled employees

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment with the Group continues and that appropriate training and accommodations, depending on the disability, are arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical with that of other employees.

Engagement with suppliers, customers and others

In addition to ensuring engagement with our shareholders, the Group is committed to engaging with its other principal stakeholders: patients and their caregivers, employees and suppliers. All concerns or opinions of these stakeholders are discussed at the Board and management level and by direct engagement with stakeholders themselves.

For example, our medical affairs strategy involves discussing the cancer treatment landscape with practitioners and other experts to forge a mutual understanding of how our product candidates could address unmet medical needs. We maintain a number of key, long-term relationships with our suppliers of equipment, manufacturing services and clinical trial support. These relationships with our suppliers are maintained as partnerships, in order to work effectively and efficiently. Our Directors receive regular updates regarding these mission-critical partnerships and approve any material changes to them.

Every decision we make is taken with our stakeholders in mind and what is the best for the relationship in the long term. Opinions and feedback from these external stakeholders are encouraged and are taken into consideration when discussing strategy and performance.

Auditors

In accordance with Section 489 of the Companies Act 2006, a resolution for the re-appointment of Ernst & Young LLP as auditor of the Group is to be proposed at the forthcoming Annual General Meeting.

Statement of Directors Responsibilities

The Directors are responsible for preparing the Strategic Report and Directors’ Report and the Group and Parent Company financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial period. Under that law, the Directors have prepared the Group financial statements in accordance with IFRS as adopted by the United Kingdom and elected to prepare the Parent company financial statements in accordance with the United Kingdom Generally Accepted Accounting Practice, including FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (UK Accounting Standards and applicable law). Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

 

•

select suitable accounting policies and then apply them consistently;

 

•

make judgements and accounting estimates that are reasonable and prudent;

 

•

for the Group financial statements, state whether they have been prepared in accordance with International Accounting Standards in compliance with the requirements of the Companies Act 2006;

 

•

for the Company financial statements, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Company financial statements;

 

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AUTOLUS THERAPEUTICS PLC

Directors’ Report

For the 12 months ended 31 December 2021

 

•

assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

 

•

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. The Directors are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing directors’ responsibilities may differ from legislation in other jurisdictions.

Directors’ confirmations

Each of the persons who is a Director at the date of approval of this Annual Report and Accounts confirms that: so far as the Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and the Director has taken all the steps that he ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act.

Approved by the Board and signed on its behalf by:

/s/ Christian Itin                                                 

Christian Itin – Director and CEO

Date: 30 May 2022

 

Registered Office: The MediaWorks, 191 Wood Lane, London W12 7FP, United Kingdom

 

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AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

Annual Statement from the Chair of the Compensation Committee

Dear Shareholder,

As the Chair of the Compensation Committee (the “Committee”), I am pleased to present, on behalf of the board of directors (the “Board”) of Autolus Therapeutics plc (the “Company” or “Autolus” or “Group”), the Directors’ remuneration report for the year ended 31 December 2021 (the “Directors’ Remuneration Report”).

The Company’s Annual Report and Accounts, along with the Directors’ Remuneration Report, will be subject to an advisory vote at the forthcoming Annual General Meeting on 28 June 2022 (the “AGM”). The Directors’ Remuneration Policy will be subject to approval at the AGM.

Introduction

During the period covered by this Directors’ Remuneration Report, we maintained the remuneration programs and policies that the Committee established during the financial year 2020 and implemented strategic compensation initiatives designed to incentivise and retain key employees in the Company.

As we continue the Company’s operations, the Committee’s role will be to ensure that Directors and senior executives at Autolus are appropriately compensated and incentivised to deliver growth to shareholders in a long-term and sustainable manner. The Committee seeks to accomplish this by establishing remuneration programs that are grounded in market practice, are effective at driving proper management behaviours, clearly link pay and performance and are cost efficient overall. Key considerations guiding our Remuneration Policy are discussed further on page 25.

Corporate Governance Standards

As a public company, we are subject to corporate governance standards and regulations applicable in the United States and the United Kingdom; however, the UK Corporate Governance Code does not apply to us because our securities are listed solely on NASDAQ. For example, in order to conform to director independence standards applicable in the United States, our Chief Executive Officer (“CEO”) is the only executive director of the Company, and we currently intend to add only non-executive directors to our Board. As such, the Directors’ Remuneration Report and the Remuneration Policy as they relate to executive directors address only the compensation of our CEO, who also served as our Chairman until 15 April 2021.    

The Global Marketplace for Talent

Autolus is a biopharmaceutical company with operations in Europe and the United States. The Company plans to expand its operations in both geographic regions in line with the growth of its clinical and manufacturing activities and its plans to commercialise its products in these geographies. Given that the market for experienced directors and biopharmaceutical executive management talent, particularly in the United States, is very competitive, the Committee references the US market as the leading indicator for remuneration levels and practices. This will help attract and retain directors and motivate the superior executive management talent needed to successfully manage the Company’s complex global operations. Being consistent in this market view of the United States as the primary benchmark for remuneration practices for directors and the CEO (as our sole executive director) is key for the Company as it builds its global operations in a manner designed to deliver sustainable long-term growth and shareholder value.    

 

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AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

During the 2021 financial year, the Committee undertook a benchmarking review for director and executive director compensation, which included a review of compensation practices of comparable companies to Autolus in the US and Europe, and referred to this analysis in calibrating its decisions and recommendations with respect to director and non-executive director compensation. In taking any actions, the Committee is mindful of the general UK compensation framework, including investor bodies’ guidance, and the UK Corporate Governance Code, and has incorporated these into its remuneration programs, policies and decisions where it believes they best serve the long-term interests of shareholders.

Remuneration Program Highlights

While I recommend that you carefully read the disclosure on our programs and policies that follows this letter to help with the understanding of our approach to director compensation, I want to highlight the following aspects of our program below:

 

•

Pay for Performance – We believe that a significant portion of remuneration of our directors and our CEO (as our sole executive director) should be based on achieving objectives designed to create inherent value in the Company, and ultimately on achieving value creation for our shareholders. In line with this belief, the compensation of our CEO includes a significant performance-based cash bonus opportunity and a large equity incentive component, and our directors receive equity incentives designed to reward long-term value creation for our shareholders.

 

•

Shareholding requirements for Executive Directors – We believe having these requirements encourages executive directors to build meaningful shareholding positions and furthers alignment of their interests with those of shareholders. Executive directors are required to build and retain a shareholding equivalent to at least 200% of their salary within a period of five years following appointment.

 

•

Recovery Policy – To further embed the linkage between pay and performance, any annual bonus and Equity Incentive Plan awards for the CEO as our sole executive director are subject to recovery and withholding provisions which permit the Board, in its discretion, to reduce the size of any awards in the event of a material misstatement of financial results, a miscalculation or error in assessing the performance condition applying to the award, or in the event of serious misconduct committed by the employee.

 

•

2021 Remuneration Outcome – As outlined above, a core principle in Autolus’ remuneration program is the linkage between pay and performance. In financial year 2021, the annual bonus of Christian Itin, our CEO and sole executive director, was based entirely on corporate objectives. At a meeting on 15 December 2021, the Compensation Committee of the Board determined that the Company achieved 85% of its annual corporate objectives, which resulted in a total bonus pay out to the CEO of 51% of his base salary for financial year 2021. This bonus was paid in March 2022. This outcome was based on achievements versus goals in the following key areas: Obe-cel, Financial and Pipeline. Not all goals were achieved in full, resulting in the overall below target outcome. The Compensation Committee exercised discretion in the evaluation of partial achievement of certain criteria and the establishment, during the year, of additional corporate objectives reflecting developments during the year. Please see page 41 for additional details on this bonus outcome and the pay for performance linkage.

 

•

Major Decisions and Substantial Changes regarding Directors’ Remuneration – During financial year 2021, the Compensation Committee performed a benchmarking analysis of directors’ remuneration based on the Company’s peer group. Based on this analysis, in September 2021, in connection with the retention of a non-executive director to serve as Chair of the Board, the Board approved the following revisions to the Company’s Non-Employee Director Compensation Policy, or Policy: (i) an increase in the annual stipend payable to the Chair from £42,000 to £50,000, (ii) an initial, one-time equity award of options to purchase

 

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AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

25,000 of our ADSs on the date of a non-executive director’s appointment as Chair. In December 2021, as part of the Committee’s regular benchmarking of non-executive director compensation, the Committee approved the following revisions to equity awards to non-executive directors under the Policy: (i) the initial grant was increased from 25,000 to 40,000 share options, and (ii) the annual grant was increased from 12,500 to 20,000 share options. The Board and Committee, respectively applied discretion in setting such amounts, based on the benchmarking analysis conducted by the Committee’s independent compensation consultant and the workload associated with the position of Chair.

Conclusion

The Committee believes the proposals put forth in this report will properly motivate our directors and our CEO to deliver sustainable growth and shareholder value over the long term and do so in a responsible and cost-efficient manner.    

I hope that you find the information in this report helpful, and look forward to the AGM, where we hope to have your support.

 

Yours sincerely

/s/ John Berriman

John Berriman

Chair of the Compensation Committee   30 May 2022

 

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AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

Remuneration Policy

This part of the Directors’ Remuneration Report sets out the Remuneration Policy for the Company’s directors and executive directors and has been prepared in accordance with the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. The Remuneration Policy was approved by the Shareholders at the AGM on 28 March 2019 and remains in effect from the date of approval for a period of three years, or until a revised policy is approved by shareholders. Accordingly, the Remuneration Policy will be submitted for approval by the Shareholders at the 2022 AGM.

The scenario charts have been updated to reflect the intended application of the policy for the 2022 financial year. A copy of the shareholder-approved policy (including the scenario charts for the 2019 financial year) is in the Annual Report and Financial Statements for the year ended 30 September 2018, which is available on the Company’s website.

Key considerations when determining the Remuneration Policy

The Committee designed the Remuneration Policy with a number of specific objectives in mind. The Remuneration Policy should:

 

•

enable the Company to attract, retain and motivate high calibre directors and the CEO who is currently the sole executive director, and focus them on the delivery of the Company’s strategic and business objectives;

 

•

encourage a corporate culture that promotes the highest level of integrity, teamwork and ethical standards;

 

•

be competitive against appropriate market benchmarks (being predominantly the US biotech sector) and have a strong link to performance, providing the ability to earn above-market rewards for strong performance;

 

•

encourage equity ownership by directors and the CEO to motivate and align them with the overall interests of shareholders and the Company;

 

•

be simple and understandable, both internally and externally; and

 

•

take due account of good governance and promote the long-term success of the Company.

In seeking to achieve the above objectives, the Committee is mindful of the views of a broad range of stakeholders in the business and accordingly takes account of a number of factors when setting remuneration including: market conditions; pay and benefits in relevant comparator organisations; terms and conditions of employment across the Company; the Company’s risk appetite; the expectations of institutional shareholders; and any specific feedback received from shareholders and other stakeholders.

The Remuneration Policy applicable to executive directors is designed to provide the Committee with the parameters within which to set the specific individual compensation during the upcoming 3-year period. In making its decisions, the Committee will seek to apply a compensation philosophy that provides competitive compensation and employment terms aligned with the 50th percentile of the Company’s peer group of similarly situated companies, which is selected by the Committee annually based on a proposal from its independent compensation consultant. The Committee may vary from this general philosophy where special circumstances apply or where recruitment or retention of a particular executive director is required.

 

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AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

Executive Director Remuneration Policy Table

The table below sets out, for each element of pay, a summary of how remuneration of executive directors is structured and how it supports the Company’s strategy.    

 

Executive Directors
Purpose and link to strategy		Operation		Maximum opportunity		Performance metrics
Base salary
To recruit and retain executive directors of the highest calibre who are capable of delivering on the Company’s strategic objectives, reflecting the individual’s experience and role within the Company. Base salary is designed to provide an appropriate level of fixed income to avoid any over-reliance on variable pay elements that could encourage excessive risk taking.		Salaries are normally reviewed annually, and changes are generally effective from the start of the Company’s financial year. The annual salary review for executive directors takes a number of factors into consideration, including:   •  business performance;   •  salary increases awarded to the overall employee population;   •  skills and experience of the individual over time;   •  scope of the individual’s responsibilities;   •  changes in the size and complexity of the Company;   •  market competitiveness assessed by periodic benchmarking; and   •  the underlying rate of inflation.		Whilst there is no prescribed formulaic maximum, any increases to base salary will take into account prevailing market and economic conditions and the approach to employee pay throughout the organisation.   Base salary increases are awarded at the discretion of the Committee based on the factors outlined in this table (see column “Operation”).		Executive Directors’ performance is a factor considered when determining any base salary increases.
Benefits
Reasonable benefits-in-kind are provided to support executive directors in carrying out their duties and assist with retention and recruitment.		The Company aims to offer benefits that are in line with market practice. The benefits currently available to our executive director include death in service insurance, permanent health insurance, an allowance for health insurance, a housing allowance and an allowance for tax advice.   The Committee retains discretion to offer the following additional benefits: life and disability insurance, private medical insurance, temporary living and transportation expenses, relocation assistance, and tax equalisation to allow flexibility in employing a foreign national, all with or without tax gross-up.		The value of each benefit is not predetermined and is typically based upon the cost to the Company of providing such benefit.		Not performance related.

 

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AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

Executive Directors
Purpose and link to strategy		Operation		Maximum opportunity		Performance metrics
		Travel and any reasonable business-related expenses (including tax thereon) may be reimbursed on a gross–of-tax basis.   Executive Directors may become eligible for other benefits in the future where the Committee deems it appropriate. Where additional benefits are introduced for the wider workforce, executive directors may participate on broadly similar terms.
Pensions
The Company aims to provide a contribution towards life in retirement.		Executive Directors are eligible to receive employer contributions to fulfil statutory pension requirements or a salary supplement in lieu of pension benefits, or a mixture of both.		Up to 10% of base salary.		Not performance related.
Annual bonus
The annual bonus scheme rewards the achievement of objectives that support the Company’s corporate goals and delivery of the business strategy in the short term.		Bonuses are determined based on measures, targets and stretch targets that are agreed by the Committee at the start of each financial year. However, the Committee retains the discretion to include achievements that have not been established as corporate goals at the beginning of the year.		The target bonus opportunity for executive directors ranging from 60% to 120% of salary, with a maximum bonus opportunity of up to 200% of the target bonus based on achievement pre-defined stretch targets.		Performance measures are determined by the Committee each year and may vary to ensure that they promote the Company’s business strategy and shareholder value. The annual bonus will be based on corporate measures, including financial and/or strategic measures. Bonus measures are reviewed annually, and the Committee has the discretion to vary the mix of measures or to introduce new

 

27

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

Executive Directors
Purpose and link to strategy		Operation		Maximum opportunity		Performance metrics
						The Committee may alter the bonus outcome if it considers that the level of pay-out is inconsistent with overall Company performance, taking account of any factors it considers relevant. This will help ensure that pay outs reflect overall Company performance during the period. Bonus payments are subject
Equity Incentive Plan (EIP)
The EIP is designed to incentivise the successful execution of business strategy over the longer term, to provide long-term retention, and to increase alignment of interests with shareholders.   The EIP facilitates share ownership to provide further alignment with shareholders.		Awards will typically be granted annually, in the form of options, share appreciation rights, restricted shares/units or performance shares/units that normally vest over a period of up to four years.   At the discretion of the Committee, participants may also be entitled to receive the value of dividends paid between grant and vesting on vested shares. The payment may be in cash or shares and may assume dividend reinvestment.   EIP awards are not subject to any holding period.		There is no maximum opportunity under the EIP. However, the Committee will generally work within the benchmarking guidelines provided by our compensation consultants. We seek to establish equity-based remuneration competitive to that offered by a set of comparable companies with whom we may compete for executive talent.		The Committee will select the most appropriate form of EIP award each year. Awards are subject to recovery and withholding provisions.
All-employee share schemes
Encourages employee share ownership and therefore increases alignment of interests with shareholders.		The Company may, from time to time, operate tax-approved share plans (such as HM Revenue & Customs (“HMRC”)-approved Save As You Earn Option Plan and Share Incentive Plan) for which executive directors would be eligible on the same basis as all other employees.		The schemes are subject to the limits set by HMRC.		Not performance related.

 

28

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

Share ownership guidelines
Encourages executive directors to build a meaningful shareholding so as to further align their interests with those of shareholders.		Shares owned outright by the executive director, or a connected person are included. Vested share awards and vested in-the-money share option awards are included on a net of tax basis.		Executive Directors are required to build and retain a shareholding equivalent to at least 200% of their salary within a period of five years following appointment.		Not performance related.

Notes to the Remuneration Policy Table

Legacy arrangements

For the duration of this Remuneration Policy, the Company will honour any commitments made in respect of current or former Directors before the date on which either: (i) the Remuneration Policy becomes effective; or (ii) an individual becomes a Director, even where not consistent with the Remuneration Policy set out in this report or prevailing at the time such commitment is fulfilled. For the avoidance of doubt, all outstanding historic awards that were granted in connection with, or prior to, listing remain eligible to vest based on their original or modified terms.

Recovery and withholding

Awards under the annual bonus and the EIP are subject to recovery and withholding provisions which permit the Committee, in its discretion, to reduce the size (including to zero) of any future bonus or share award granted to the executive director, to reduce the size (including to zero) of any granted but unvested share award, or to require the executive director to make a cash payment to the Company. The circumstances in which the Company may apply the recovery and withholding provisions are the discovery of a material misstatement of financial results, a miscalculation or error in assessing the performance condition applying to the award, or in the event of serious misconduct committed by the executive director.    

In respect of cash bonus payments, the recovery and withholding provisions apply for one year from the date of payment of the bonus (or, if later, the date of publication of the Company’s financial results for the year following the relevant year over which the bonus was earned).

In respect of share awards under the annual bonus plan and the EIP, recovery and withholding provisions apply up until the first anniversary of the date on which the relevant award vests, although the Committee may extend this period for a further two years if there is an ongoing investigation into the circumstances of any event that, if determined to have occurred, would permit the Committee to operate the recovery and withholding provisions.

Performance conditions

The choice of annual bonus performance metrics reflects the Committee’s belief that any incentive-based remuneration should be appropriately challenging and tied to the delivery of key financial and strategic targets intended to ensure that executive directors are incentivised to deliver across a range of objectives for which they are accountable. The Committee has retained some flexibility on the specific measures which will be used to ensure that any measures are fully aligned with the strategic imperatives prevailing at the time they are set.

 

29

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

The targets for the bonus scheme for the forthcoming year will be set out in general terms, subject to limitations with regards to commercial sensitivity. Additional details of the targets will be disclosed when they are no longer considered to be commercially sensitive, usually following the end of the relevant financial year in the Directors’ Remuneration Report.

Where used, performance conditions applicable to EIP awards will be aligned with the Company’s objective of delivering meaningful increases in long-term value to shareholders. Prior to each award, the Committee has flexibility to select measures that are fully aligned with the strategy prevailing at the time awards are granted.    

Notwithstanding this, the Committee would, if appropriate, seek to consult with major shareholders in advance of any material change to the choice or weighting of performance measures.

The Committee will review the calibration of targets applicable to the annual bonus, and the EIP in years where performance measures apply, annually to ensure they remain appropriate and sufficiently challenging, taking into account the Company’s strategic objectives and the interests of shareholders.

Differences in remuneration policy between executive directors and other employees

The overall approach to reward for employees across the workforce is a key reference point when setting the remuneration of the executive directors. When reviewing the salaries of the executive directors, the Committee pays close attention to pay and employment conditions across the companies in our US and European peer groups.

The key difference between the remuneration of executive directors and that of our other employees is that, overall, at senior levels, remuneration is increasingly long-term, and ‘at risk’ with an emphasis on performance-related pay linked to business performance and share-based remuneration. This ensures that remuneration at senior levels will increase or decrease in line with business performance and provides alignment between the interests of executive directors, the Company and shareholders.

Committee discretion in operation of variable pay schemes

The Committee operates under the powers it has been delegated by the Board. In addition, it complies with rules that are either subject to shareholder approval or by approval from the Board. These rules provide the Committee with certain discretions which serve to ensure that the implementation of the Remuneration Policy is fair, both to the individual director and to the shareholders. The Committee also has discretions to set components of remuneration within a range, from time to time. The extent of such discretions is set out in the relevant rules, the maximum opportunity or the performance metrics section of the policy table above. To ensure the efficient administration of the variable incentive plans outlined above, the Committee will apply certain operational discretions.

These include the following:

 

•

selecting the participants in the plans;

 

•

determining the timing of grants of awards and/or payments;

 

•

determining the quantum of awards and/or payments (within the limits set out in the policy table above);

 

•

determining the choice (and adjustment) of performance measures and targets for each incentive plan in accordance with the policy set out above and the rules of each plan;

 

•

determining the extent of vesting based on the assessment of performance and discretion relating to measurement of performance in certain events such as a change of control or reconstruction;

 

•

determining whether awards would be granted over and/or satisfied with ordinary shares and/or ADS’ and/or cash;

 

•

whether the “malus and clawback principles” shall be applied to any award in the relevant circumstances and, if so, the extent to which it shall be applied;

 

30

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

•

making the appropriate adjustments required in certain circumstances, for instance for changes in capital structure;

 

•

determining “good leaver” status for incentive plan purposes and applying the appropriate treatment; and

 

•

undertaking the annual review of weighting of performance measures and setting targets for the annual bonus plan and other incentive schemes, where applicable, from year to year.

If an event occurs which results in the annual bonus plan or EIP performance conditions and/or targets being deemed no longer appropriate (e.g., material acquisition or divestment), the Committee will have the ability to make appropriate adjustments to the measures and/or targets and alter weightings, provided that the revised conditions are not materially less challenging that the original conditions. Any use of the above discretion would, where relevant, be explained in the Annual Report on Remuneration and may, as appropriate, be the subject of consultation with the Company’s major shareholders.

Shareholder views

The Board is committed to dialogue with shareholders. The Committee will consider shareholder feedback received following the AGM, as well as any additional feedback and guidance received from time to time. This feedback will be considered by the Committee as it develops the Company’s remuneration framework and practices going forward. Assisted by its independent adviser, the Committee also actively monitors developments in the expectations of institutional investors and their representative bodies.

Employment conditions

The Committee is regularly updated throughout the year on pay and conditions applying to Company employees. Where significant changes are proposed to employment conditions elsewhere in the Company, these are highlighted for the attention of the Committee.    

The Remuneration Policy for executive directors supports the business needs of the Company, ensuring it promotes long-term success whilst enabling it to attract, retain and motivate executive directors of a high calibre. The Committee consulted with members of senior management regarding the Remuneration Policy but did not seek input from the larger employee base. The Committee is satisfied that the Remuneration Policy supports the Company’s strategy of growing long-term shareholder value and appropriately balances fixed and variable remuneration. With a high proportion of reward delivered in the form of equity, this ensures that executive directors have a strong alignment with shareholders through the Company’s share price.

Other remuneration policies

Remuneration for new appointments

Where it is necessary to appoint or replace an executive director, the Committee’s approach when considering the overall remuneration arrangements in the recruitment of a new executive director is to take account of the calibre, expertise and responsibilities of the individual, his or her remuneration package in their prior role and the prevailing market rate for similar roles. Remuneration will be in line with our policy and the Committee will not pay more than is necessary for a successful recruitment.

 

31

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

The remuneration package for a new executive director will be set in accordance with the terms of the Company’s approved Remuneration Policy in force at the time of appointment. Further details are provided below:

 

Salary		The Committee will set a base salary appropriate to the calibre, experience and responsibilities of the new appointee. In arriving at a salary, the Committee may take into account, amongst other things, the market rate for the role and internal relativities. The Committee has the flexibility to set the salary of a new executive director at a lower level initially, with a series of planned increases implemented over the following few years to bring the salary to the desired positioning, subject to individual performance.
Benefits		Benefits will be consistent with the principles of the Remuneration Policy. The Company may award certain additional benefits and other allowances including, but not limited to, those to assist with relocation support, temporary living and transportation expenses, educational costs for children and tax equalisation to allow flexibility in employing a foreign national.
Pension benefits		A maximum pension contribution of 10% consistent with the Remuneration Policy. For an internal appointment, his or her existing pension arrangements may continue to operate. Any new executive director based outside the UK will be eligible to participate in pension or pension allowance, insurance and other benefit programs in line with local practice.
Annual bonus		The maximum bonus opportunity for new appointments is 200% of salary consistent with the Remuneration Policy.
Equity Incentive Plan		No maximum opportunity for new executive director appointments.
Buy-out awards		In addition to the above, the Committee may offer additional cash and/or share-based elements in order to ‘buy out’ remuneration relinquished on leaving a former employer.   In the event that such a buy-out is necessary to secure the services of an executive director then the structure of any award or payment will mirror, as far as is possible, the arrangements in place at the incoming executive director’s previous employer, including the vehicle, structure, vesting periods, expected value and performance conditions.   Any share awards made in this regard may have no performance conditions, or different performance conditions, or a shorter vesting period compared to the Company’s existing plans, as appropriate.   Shareholders will be informed of any buy-out arrangements at the time of the executive director’s appointment.

Depending on the timing and responsibilities of the appointment, it may be necessary to set different annual bonus/EIP performance measures and targets as applicable to other executive directors.    

Service contracts and termination policy

The Company’s policy on remuneration for executive directors who leave the Company is set out below. As a matter of policy, Executive Directors should have contracts with an indefinite term providing for a maximum of up to 3 months’ notice. The Committee will exercise its discretion when determining amounts that should be paid to leavers, taking into account the facts and circumstances of each case. Generally, in the event of termination, the executive directors’ service contracts may provide for payment of basic salary and benefits over the notice period. The Company may elect to make a payment in lieu of notice equivalent in value to basic salary for any unexpired portion of the notice period.

 

32

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

The service contracts of executive directors may include additional payments within the parameters outlined below. In setting the specific terms for an executive director, the Committee will seek to apply a compensation philosophy that provides competitive compensation and employment terms aligned with the 50th percentile of the Company’s peer group of similarly situated companies, which is selected by the Committee annually based on a proposal from its independent compensation consultant. The Committee may vary from this general philosophy where special circumstances apply or where recruitment or retention of a particular executive director is required.

 

		Termination without cause or for cause by participant1		Termination for cause1		Termination in connection with change of control
Salary		A payment up to 18 months’ salary payable as a lump sum or on a monthly basis.		No payment.		A payment up to 24 months’ salary payable as a lump sum or on a monthly basis.
Annual bonus		A bonus up to one year’s target bonus, or a higher bonus at the discretion of the Committee, payable as a lump sum or on a monthly basis.		No bonus payable.		A bonus up to 24 months’ target bonus, or a higher bonus at the discretion of the Committee, payable as a lump sum or on a monthly basis.
		Termination without cause or for cause by participant1		Termination for cause1		Termination in connection with change of control
Equity Incentive Awards		Acceleration of vesting of up to 12 months is permissible; however, awards may vest at the normal time or be accelerated at the Committee’s discretion, or to the extent that any performance conditions have been achieved. The Committee has discretion to determine that awards will vest early, on the date of cessation. Awards which are granted as market value options or share appreciation rights, and which have vested may remain exercisable for up to twelve months at the discretion of the Committee or as prescribed in the equity incentive plan or employment agreement.		All outstanding awards, including those which have vested but are unexercised, will lapse immediately upon cessation of employment, unless the Committee determines otherwise.		Full vesting on termination within 6 months prior to or 24 months after the date of Change of Control.   Exceptionally, the Committee may provide that, on the occurrence of a Change of Control, awards will: lapse in full; vest in full (in cash, shares or other property); be replaced with other rights or property; or be adjusted as to the number or type of shares over which they are granted.

 

1

Circumstances in which the executive director may be terminated for cause include failure to carry out employment duties or lawful directions, criminal conviction, fraud, embezzlement, misappropriation, misconduct or breach of fiduciary duties or such other circumstances as further described in the employment agreement. Circumstances in which the executive director may terminate for cause include a unilateral reduction by the Company of the executive director’s salary or responsibilities, failure to pay an earned bonus, and a material breach of the service agreement by the Company or such other circumstances as further described in the employment agreement.

 

33

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

The Company is unequivocally against rewards for failure; the circumstances of any departure, including the individual’s performance, would be taken into account in every case. Statutory redundancy payments may be made, as appropriate. Service agreements may be terminated summarily without notice (or on shorter notice periods) and without payment in lieu of notice in certain circumstances, such as gross misconduct or any other material breach of the obligations under their employment agreement, or such other circumstances as further described in the employment agreement. The Company may require the individual to work during their notice period or may place them on garden leave during which they would be entitled to base salary and benefits.

Except in the case of gross misconduct or resignation, the Company may, at its absolute discretion, reimburse any reasonable professional fees relating to the termination of employment and, where an executive director has been required to relocate, pay reasonable repatriation costs, including possible tax exposure costs. This includes any statutory entitlements or sums to settle or compromise claims in connection with a termination (including, at the discretion of the Committee, reimbursement for legal advice and provision of outplacement services).

Policy on external appointments

The Board believes that it may be beneficial to the Company for executive directors to hold non-executive directorships outside the Company. Any such appointments are subject to approval by the Board and the executive director may retain any fees received at the discretion of the Board. The Company’s sole executive director served until April 2021 as a non-executive director of Kymab Group Ltd., a privately held biopharmaceutical company.

Employment Terms and Remuneration Scenarios for Executive Directors

The Company’s CEO and currently its sole executive director has a rolling service agreement which may be terminated in accordance with the terms set forth therein. The service agreement is available for inspection at the Company’s registered office during normal business hours. The termination notice period is listed in the table below:

 

Name		Date of service contract		Notice period
Christian Itin, Ph.D.		2 June 2019		Three months for either party

Upon termination by the Company without cause or by the executive director for cause, the executive director is entitled to receive 12 months’ cash severance and a bonus pro-rated for the time served during the applicable financial year. If such termination occurs during a period starting 3 months prior to a change of control of the Company to 12 months after such change of control, the executive director is entitled to receive an additional 6 months’ cash severance.

The charts below show an estimate of the 2022 remuneration package for the Company’s CEO and sole executive director, under three assumed performance scenarios, based upon the Remuneration Policy set out above.

 

34

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

The scenarios are defined as follows:

Below Target (comprising fixed pay only):

 

•

Base salary as at 1 January 2022: £415,000

 

•

Benefits: estimated value of the various benefits

Target:

 

•

Fixed pay as set out above

 

•

Assumes bonus pay-out for 2022 bonus for on-target performance (60% of salary)

Maximum:

 

•

Fixed pay as set out above

 

•

Assumes maximum bonus pay-out for 2022 bonus, i.e. bonus of 90% of base salary payable for achievement of all base and stretch corporate goals

The bar chart below does not include any value for equity-based award remuneration. We do not believe it is possible to reasonably quantify the value that might result from outstanding options and other equity-based awards.

All amounts listed in GBP (£).

 

 

35

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

Non-Executive Director Remuneration Policy Table

The table below sets out, for each element of pay, a summary of how remuneration of non-executive directors is structured and how it supports the Company’s strategy.

 

Non-Executive Directors
Purpose and link to strategy		Operation		Maximum opportunity		Performance metrics
Fees
To attract Non-Executive Directors who have a broad range of experience and skills to provide independent judgement on issues of strategy, performance, resources and standards of conduct.		Non-Executive Directors receive an annual retainer paid in cash, comprising a base fee plus additional fees for additional responsibilities, such as a Committee Chairmanship or membership and the role of Lead Independent Director or Chairperson. These fees are determined by the full Board of Directors, upon recommendation of the Compensation Committee. When reviewing fee levels, account is taken of market movements in fee levels, Board committee responsibilities, ongoing time commitments and the general economic environment. In exceptional circumstances, if there is a temporary yet material increase in the time commitments for Non-Executive Directors, the Board may pay additional fees to recognise that additional workload. Non-executive directors ordinarily do not participate in any pension, bonus or performance-based share incentive plans. Travel, accommodation and other business-related expenses incurred in carrying out the role will be paid or reimbursed by the Company including, if relevant, any gross-up for tax.		Actual fee levels are disclosed in the annual Directors’ Remuneration Report for the relevant financial year.		Not performance related.

 

36

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

Non-Executive Directors
Purpose and link to strategy		Operation		Maximum opportunity		Performance metrics
Equity Incentive Awards
To facilitate share ownership and provide alignment with shareholders.		Non-Executive Directors may receive an equity incentive award in the form of options, share appreciation rights, restricted shares / units or performance shares / units or such other form permitted in the EIP.   New Non-Executive Directors receive an initial equity incentive award upon appointment or election. In addition, Non-Executive Directors receive annual equity incentive awards at the time of the annual meeting.   The initial equity award normally vests over three years. The annual equity awards normally vest over 12 months.   The size of the equity incentive awards is determined by the Committee.   When reviewing award levels, account is taken of market movements in equity incentive awards, Board committee responsibilities, ongoing time commitments and the general economic environment.		There is no maximum number of equity incentive awards that may be awarded to individuals each year.		Not performance related.

Non-Executive Directors’ terms of engagement

Each of the non-executive directors is engaged under a non-executive director appointment letter. The terms of appointment for a non-executive director would be in accordance with the Remuneration Policy for non-executive directors as set out in the policy table. Newly appointed non-executive directors receive an initial, one-time equity award of options to purchase 40,000 of our ADSs on the date of such appointment to the Board, which will vest in equal monthly instalments through the third anniversary of the grant date. In addition, a non-executive director who is initially appointed to serve as Chair of the Board receives an option to purchase 25,000 of our ADSs on the date of such appointment to chair, which will vest in equal monthly instalments through the third anniversary of the grant date. However, the Committee may decide to grant a higher or lower amount as appropriate.

 

37

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

On the date of each of our annual meetings of shareholders, each non-executive director that continues to serve will be granted an option to purchase 20,000 of our ADSs or ordinary shares, which will vest in equal monthly instalments through the first anniversary of the grant date.

In any event, each appointment is terminable by either party on not less than 30 days’ written notice. Our Board is classified, meaning that each of our Directors is designated to one of three classes and is elected to serve a three-year term. Non-executive Directors are only entitled to fees accrued to the date of termination. The dates of appointment of each of the non-executive Directors serving at 31 December 2021 are summarised in the table below.

 

Non-Executive Directors		Date of contract or date of appointment
Martin Murphy, Ph.D.		14 June 2018
Joe Anderson, Ph.D.		15 June 2018
Jay Backstrom, M.D., MPH		1 August 2020
Linda Bain		15 June 2018
John Berriman		15 June 2018
Cynthia Butitta		15 June 2018
Kapil Dhingra, M.D.		15 June 2018
John Johnson		15 September 2021
William Young, Ph.D.		6 November 2021

Non-executive Directors’ letters of appointment are available for inspection at the Company’s registered office during normal business hours and will be available for inspection at the AGM.

Annual Report on Remuneration

This part of the Directors’ Remuneration Report has been prepared in accordance with Part 3 of The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. The Annual Report on Remuneration and the Annual Statement by the Chairman of the Committee will be put to a single advisory shareholder vote at the AGM on 28 June 2022. The information in this part of the report has been audited where required under the foregoing regulations and is indicated as audited where applicable.

Compensation Committee

The current members of the Committee, who are all independent, are John Berriman (Chair), Cynthia M. Butitta and Dr. Martin Murphy.

Members of management, including the CEO, and the Company Secretary, are invited to attend meetings where appropriate. The Company Secretary acts as the secretary to the Committee. No Director or employee is involved in any decisions and are not present for any discussions regarding their own remuneration.

No conflicts of interest have arisen during the period and none of the members of the Committee has any personal financial interest in the matters discussed, other than as shareholders. The fees of the non-executive Directors are approved by the Board on the recommendation of the Committee.

 

38

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

Meetings attendance (between 1 January 2021 and 31 December 2021)

The Committee convenes at regularly scheduled meetings in connection with quarterly Board meetings. In addition, the Committee meets on an as-needed basis, or approves matters in the form of resolutions by written consent. The table below shows the attendance at scheduled meetings in 2021.

 

		Attendance
John Berriman		7 of 7
Cynthia M. Butitta		6 of 7
Martin Murphy, Ph.D.		7 of 7

Independent advisors

Wholly independent advice on director remuneration is received from time to time from the executive compensation practice of Aon plc. Aon is a member of the Remuneration Consultants Group and is a signatory to its Code of Conduct. During the period covered by this Directors’ Remuneration Report, Aon advised the Committee on the Company’s remuneration programs and policies, benchmarking remuneration for new hires, and other related matters. During the year, £93,000 in fees were charged by Aon for year ended 31 December 2021 for advice to the Committee.

Activity in the period

The Committee’s principal function is to support the Company’s strategy by ensuring that those individuals responsible for delivering the strategy are appropriately incentivised and rewarded through the operation of the Remuneration Policy. In determining the Remuneration Policy, and in constructing the remuneration arrangements for directors, executive directors and senior employees, the Board, advised by the Committee, aims to provide remuneration packages that are competitive and designed to attract, retain and motivate such individuals of the highest calibre.

The Committee is responsible for and considered during the period:

 

•

evaluating the efficacy of the Company’s Remuneration Policy and strategy;

 

•

reviewing and determining remuneration to be paid to the Company’s executive directors, including setting the Remuneration Policy;

 

•

reviewing and making recommendations to the Board regarding remuneration for non-executive directors, including the approval of the Non-Executive Director Compensation Policy;

 

•

establishing the design and performance targets of all share incentive plans;

 

•

assessing the appropriateness and subsequent achievement of the performance targets related incentive plans;

 

•

preparing any report on executive remuneration required by the rules and regulations of the US SEC, NASDAQ and as required under English law;

 

•

reviewing, evaluating, and approving employment agreements, service contracts, severance agreements, change-of-control protections, corporate performance goals and objectives, and other compensatory arrangements of the executive officers and other senior management and adjusting remuneration, as appropriate;

 

•

evaluating and approving remuneration plans and programs and establishing equity remuneration policies;

 

•

reviewing remuneration practices and trends to assess the adequacy and competitiveness of the executive remuneration programs as compared to industry peers, and determining the appropriate levels and types of remuneration to be paid;

 

•

approving any loans by the Company to employees;

 

39

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

•

reviewing and approving remuneration arrangements for any executive officer involving any subsidiary, special purpose or similar entity, with consideration of the potential for conflicts of interest;

 

•

reviewing the Company’s practices and policies of employee remuneration as they relate to risk management and risk-taking incentives; and

 

•

reviewing the Directors’ Remuneration Report.

The Committee is formally constituted and operates on written terms of reference, which are available on the Company’s website, https://www.autolus.com/investor-relations/corporate-governance/documents-charters

Single total figure of Directors’ remuneration – 12 months ended 31 December 2021 (audited)

The total remuneration of the individual Directors who served during the 12-month period is shown below, along with the comparative 12 months ended 31 December 2020. Total remuneration is the sum of emoluments plus company pension contributions.

 

£ thousands		Period				Base salary/ fees				Taxable Benefits				Pension				Bonus2				LTIP1				Other2				Total remuneration
Executive Directors
Christian Itin, Ph.D.			2021			£	401.7				—				—			£	204.1				—			£	2.7			£	608.5
			2020			£	381.6				—				—			£	120.5				—			£	9.4			£	511.5
Non-Executive Directors
John Johnson			2021			£	14.8				—				—				—				—				—			£	14.8
Cynthia M. Butitta			2021			£	40.5				—				—				—				—				—			£	40.5
			2020			£	38.5				—				—				—				—				—			£	38.5
Jay Backstrom, M.D, MPH			2021			£	38.5				—				—				—				—				—			£	38.5
			2020			£	16.5				—				—				—				—				—			£	16.5
John Berriman			2021			£	47.5				—				—				—				—				—			£	47.5
			2020			£	48.5				—				—				—				—				—			£	48.5
Joe Anderson, Ph.D.			2021			£	39.0				—				—				—				—				—			£	39.0
			2020			£	37.1				—				—				—				—				—			£	37.1
Kapil Dhingra, M.D.			2021			£	45.5				—				—				—				—				—			£	45.5
			2020			£	45.6				—				—				—				—				—			£	45.6
Linda Bain			2021			£	45.0				—				—				—				—				—			£	45.0
			2020			£	42.8				—				—				—				—				—			£	42.8
Martin Murphy, Ph.D.			2021			£	39.5				—				—				—				—				—			£	39.5
			2020			£	32.8				—				—				—				—				—			£	32.8
William Young			2021			£	4.4				—				—				—				—				—			£	4.4
Total			2021			£	716.4			£	—			£	—			£	204.1			£	—			£	2.7			£	923.2
			2020			£	643.4			£	—			£	—			£	120.5			£	—			£	9.4			£	773.3

 

40

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

 

1

There were no performance obligations linked to the equity-based awards, except for two performance-based awards to Dr. Itin described below in the section entitled “Long Term Incentive Plan — Awards granted in the year”. The value of non-performance-based equity-based awards in the table is based on the market value of underlying shares at the date of grant, less the applicable exercise price, which is nil because the exercise price is equal to the market value of the underlying shares at the date of grant. The value of performance-based awards in the table is based on the market value of underlying shares at the date of vesting, which is nil due to the vesting conditions not having been met during the period covered by the table.

2	All remuneration in the table is fixed remuneration with the exception of Bonus and Other, which are variable remuneration.

2021 Annual bonus (audited)

In 2021, the CEO’s annual bonus was based entirely on corporate objectives. The outcomes were as follows:

 

Objectives and Targets		Relative weighting				Achievement				Achievement Percentage
Clinical Development: Progress of FELIX clinical study (obe-cel)			40	%			Partial				20	%
Treatment Delivery: Performance metrics for FELIX clinical study (obe-cel)			10	%			Achieved				10	%
Finance: Maintain strong capital position			35	%			Partially achieved; new objective fully achieved (see below)				40	%
Pipeline: Advance AUTO4 in clinic; publications & presentations			15	%			Achieved				15	%
							TOTAL				85	%

As noted in the Annual Statement of the Chair of the Committee, during the year the Committee added a new goal relating to the consummation of the financing and collaboration arrangement with Blackstone, which had not been contemplated when the 2021 corporate goals were originally established. This new objective was achieved in full in November 2021. The overall bonus outcome of 85% of target (out of a maximum of 160%) resulted in a total bonus pay out for the CEO of 51% of salary for the 2021 financial year (being 85% of his target bonus). This bonus was paid in March 2022.

Long-term incentive plan

Awards vesting based on performance ending in the 12 months ended 31 December 2021 (audited)

There were no long-term incentive awards capable of vesting in relation to performance in the year.

 

41

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

Awards granted in the year

The CEO received the following awards of options or other equity-based awards during the 12-month period:

 

Director		Form of award		Date of grant		Number of awards				Exercise price				Face value at date of grant				Fair value at date of grant				Expiry date
Christian Itin, Ph.D.		Fair market value performance-based options		15 January 2021			150,000			$	9.02			$	1,353,000			$	934,500				15 January 2031
		Fair market value performance based restrictive		15 January 2021			50,000			$	—			$	451,000			$	451,000				15 January 2031
		Fair market value share options		15 December 2021			400,000			$	5.44			$	2,176,000			$	1,511,975				15 December 2031

Non-Executive Directors received the following option awards during the 12-month period, each vesting based on continued engagement only. These awards vest fully after one year, in 12 equal monthly instalments.

 

Non-Executive Director		Form of award		Date of grant		Number of awards				Exercise price				Face value at date of grant				Fair value at date of grant				Expiry date
John Johnson		Fair market value share options		15 September 2021			50,000			$	6.60			$	330,000			$	224,500				15 September 2031
Cynthia M. Butitta		Fair market value share options		18 June 2021			12,500			$	7.57			$	94,625			$	61,563				18 June 2031
Jay Backstrom, M.D., MPH		Fair market value share options		18 June 2021			12,500			$	7.57			$	94,625			$	61,563				18 June 2031
John Berriman		Fair market value share options		18 June 2021			12,500			$	7.57			$	94,625			$	61,563				18 June 2031
Joseph Anderson, Ph.D.		Fair market value share options		18 June 2021			12,500			$	7.57			$	94,625			$	61,563				18 June 2031
Kapil Dhingra, M.D.		Fair market value share options		18 June 2021			12,500			$	7.57			$	94,625			$	61,563				18 June 2031
Linda Bain		Fair market value share options		18 June 2021			12,500			$	7.57			$	94,625			$	61,563				18 June 2031
Martin Murphy, Ph.D.		Fair market value share options		18 June 2021			12,500			$	7.57			$	94,625			$	61,563				18 June 2031
William Young, Ph.D.		Fair market value share options		6 November 2021			25,000			$	5.56			$	139,000			$	94,502				6 November 2031

 

42

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

The exercise price of all these share options and restrictive stock units was the market value of our ADSs at the date of grant.    

Payments to former Directors and for loss of office (audited)

No payments were made to former directors of the Company or in relation to loss of office during the year.

External directorships of executive directors

Until April 2021, the CEO served as a non-executive director for Kymab Group Ltd., a privately held biopharmaceutical company.

Statement of Directors’ shareholding and share interests (audited)

The share interests of each Director as at 31 December 2021 (together with interests held by his or her connected persons) are set out in the table below. As a direct link between executive remuneration and the interests of shareholders, the Committee has implemented shareholding guidelines for executive directors. The guidelines require that executive directors build up and maintain an interest in the ordinary shares of the Company that is 200% of their salary within five years from appointment.

Shareholdings for Directors who have held office as of 31 December 2021 are set out in the table below, including, in the case of our executive director, as a percentage of salary or fees.

 

						Ordinary shares								Options
		Beneficially owned ordinary shares as at 31 December 2021				Unvested without performance conditions				Unvested with performance conditions				Vested but unexercised				Unvested without performance conditions				Unvested with performance conditions				Current shareholding (% of salary)				Shareholding requirement met?
Executive Directors
Christian Itin, Ph.D.2			1,582,381				—				50,000				516,372				635,496				150,000				1,019	%			Yes
Non-Executive Directors
John Johnson			4,167				—				—				4,167				45,833				—				n/a				n/a
Cynthia M. Butitta			97,900				—				—				87,900				9,195				—				n/a				n/a
Jay Backstrom, M.D., MPH			17,360				—				—				17,360				20,140				—				n/a				n/a
John Berriman			195,123				—				—				58,792				6,906				—				n/a				n/a
Joseph Anderson, Ph.D.			43,749				—				—				43,749				6,251				—				n/a				n/a
Kapil Dhingra, M.D.			132,329				—				—				58,792				6,906				—				n/a				n/a
Linda Bain			71,221				—				—				71,221				10,176				—				n/a				n/a
Martin Murphy, Ph.D.1			19,570,911				—				—				43,749				6,251				—				n/a				n/a
William Young, Ph.D.			694				—				—				694				24,306				—				n/a				n/a

 

1

The information shown is based, in part, upon disclosures filed on a Schedule 13G/A on 11 February 2022 by Syncona Portfolio Limited. Dr Murphy is the chief executive officer of Syncona Investment Management Limited. The number reported consists of (i) 43,749 ordinary shares underlying options that are vested and exercisable as of 31 December 2021, and (ii) the following securities held by Syncona Portfolio Limited: 12,180,333 ordinary shares and 7,346,829 ADSs. The shares are owned directly by Syncona Portfolio Limited (“Syncona Portfolio”) and indirectly by Syncona Holdings Limited (“Syncona Holdings”), Syncona Limited (“Syncona Limited”), Martin Murphy and Chris Hollowood. Syncona Portfolio is a wholly owned subsidiary of Syncona Holdings, and Syncona Holdings is a wholly controlled subsidiary of Syncona Limited, a publicly listed company. Investment and voting decisions with respect to these shares are made by Syncona Portfolio, acting upon the recommendation of Martin Murphy and Chris Hollowood, who comprise the investment committee of Syncona Investment Management Limited, also a subsidiary of Syncona Holdings. Each of these entities disclaims beneficial ownership except to the extent of its pecuniary interest therein, if any. Dr Murphy disclaims beneficial ownership of the securities referred to in clause (ii) above except to the extent of his pecuniary interest in such securities.

2	The calculation is based on Dr. Christian Itin’s 1,066,009 ordinary shares owned multiplied by the closing price of Autolus Therapeutics plc’s ADSs of £3.84 ($5.19) on 31 December 2021, divided by his base salary of £401,700.

 

43

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

Performance graph

The chart below shows the Company’s Total Shareholder Return performance compared with that of the NASDAQ Biotechnology Index (“NBI”) over the period from the Initial public offering to 31 December 2021. The NBI has been chosen as an appropriate comparator as it comprises similar companies to Autolus from the pharmaceuticals and biotechnology sectors. TSR is defined as the return on investment obtained from holding a company’s shares over a period. It includes dividends paid, the change in the capital value of the shares and any other payments made to or by shareholders within the period.

 

Aligning pay with performance

The total remuneration figure for the CEO during the year ended 31 December 2021 is shown in the table below, along with the value of bonuses paid, and LTIP vesting, as a percentage of the maximum opportunity.

 

CEO		Year ended 2021
Total remuneration (£’000)		£	608.5
Actual bonus (% of the maximum)			85	%
LTIP vesting (% of the maximum)			N/A	(1)

 

(1)	No performance-based long-term incentive awards were eligible to vest over the period. The CEO received awards of market-value options in 2021 which are eligible to vest in tranches starting from 1 year from grant date and onwards; however, these are subject to continued employment.

Percentage change in remuneration of directors and employees

The table below illustrates the increase in salary, benefits and annual bonus for the non-executive directors as a whole and that of the Company’s employees as a whole as between the financial years ended 31 December 2020 and 2021, respectively. For the 12 months ended 31 December 2021, the base salary of the CEO was maintained at £401,700.    

 

		Base salary				Annual bonus				Taxable benefits
CEO			5.3	%			69.4	%			—	%
Non-Executive Directors1			10.7	%			—	%			—	%
Average percentage change of all employees2			(7.0	)%			86.0	%			(20.0	)%

 

(1)	The change in percentage of base salary for non-executive directors is due to the addition of 2 directors.

(2)	The change in percentage of base salary for all employees is primarily due to a 20% reduction in workforce which was implemented in January 2021.

(3)	Average percentage change of all employees is calculated based on the number of employees at 31 December 2020 and 2021, respectively.

 

44

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

CEO pay ratio

The 2021 financial year is the second year in respect of which the Company is required to disclose this information under the applicable regulations.

 

Year

Methodology

25th Percentile

50th Percentile

75th Percentile

2020

Option A

14.00:1

11.64:1

7.84:1

2021

Option A

14.55:1

11.10:1

6.91:1

The pay ratios above are calculated using actual earnings for the CEO and UK employees. The CEO total single figure remuneration of £608.5 is given on page 40 of this Report.

Total remuneration for all UK full-time equivalent employees of the Group on 31 December 2020 and 2021 has been calculated in line with the single figure methodology and reflects their actual earnings received for the applicable year (including performance bonuses accrued in a year, and paid in the following year), which were used to produce the percentile calculation under Option A of the applicable regulations. The Group believes that Option A is the most comprehensive and accurate way to calculate these ratios.

The Committee believes that the median pay ratio is consistent with the pay, reward and progression policies for the Group’s UK employees taken as a whole. The base salary for all employees, including our CEO, are determined based on similar factors: market practice, experience and complexity of the role.

Set out in the table below is the base salary, and total pay and benefits for each of the percentiles included in the table above for the year ended 31 December 2021.

 

£		25th Percentile				50th Percentile				75th Percentile
Salary			36,988				47,000				73,500
Total pay and benefits			41,713				54,682				87,876

Relative importance of spend on pay

The table below illustrates the Company’s expenditure on pay, in comparison to distributions to shareholders by way of dividend payments.

 

		12 months to 31 December 2021				12 months to 31 December 2020				% Change
Distributions to shareholders		£	0			£	0				0	%
Total employee pay expenditure		£	37.6m			£	50.7m				(25.8	)%

Statement of Implementation of Remuneration Policy in 2022

There have been no significant changes in the way that the remuneration policy will be implemented in the 2022 financial year compared to how it was implemented in the 2021 financial year. There have been no deviations from the procedure for the implementation of the remuneration policy set out in that policy.

 

45

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

Annual base salary

For the 2022 financial year, the CEO’s salary was increased by 3.3% to £415,000.    

 

		Base salary 2021				Base salary 2022 (effective from 1 Jan 2022)
Executive Directors
Christian Itin, Ph.D.		£	401,700			£	415,000

Benefits and pension

In April 2019, the CEO opted out of the pension contribution scheme. While the CEO has opted out of the scheme, he remains eligible for 5% contribution under the terms of his contract.

Bonus

The 2022 annual bonus target opportunity for the CEO is 60% of his base salary. The executive director remuneration policy would allow the Committee to provide the CEO with the opportunity to receive 200% of the target bonus upon achievement of specified stretch targets. However, as of the date of this Report, no stretch targets have been specified for the 2022 financial year. Bonuses will be paid entirely in cash and will be based entirely on the achievement of corporate financial, operational and strategic objectives.

Specific targets are commercially sensitive and therefore are not disclosed in advance. However, a general description of the targets and performance against them will be disclosed in next year’s Annual Report and Accounts.

Long-term incentive plan

In 12 months ended 31 December 2021, the CEO received the following equity awards: (i) in January 2021, an award of 50,000 restricted share units and 150,000 fair market value stock options; these awards vest solely upon the achievement of corporate performance objectives within specified time frames; and (ii) in December 2021, an option to purchase 400,000 ADSs with an exercise price as at the grant date; this option has the Company’s standard 4-year vesting period, with 25% vesting on the first anniversary of the grant date and the balance remaining vesting in equal monthly instalments thereafter.

The Committee may consider other vehicles for the CEO under the EIP at a future date where appropriate.

Non-Executive Directors’ fees

Non-Executive Directors will receive the following annual retainers for the 2022 financial year, which will be paid in cash:

 

Base fee:
Chair of the board of directors ¹		£	50,000
Board member		£	30,000
Additional fees:
Audit Committee Chair		£	12,000
Audit Committee member		£	6,000
Compensation Committee Chair		£	9,000
Compensation Committee member		£	4,500
Nomination & Corporate Governance Committee Chair		£	6,000
Nomination & Corporate Governance Committee member		£	3,000
Research & Development Committee Chair		£	12,000
Research & Development Committee member		£	6,000

 

1	As of 15 May 2022, our Chairman of the Board of Directors is J. Johnson, a non-executive director.

 

46

AUTOLUS THERAPEUTICS PLC

Directors’ Remuneration Report

For the 12 months ended 31 December 2021

 

An annual award of 20,000 fair market value stock options will be made to non-executive directors on the date of the AGM. The Committee acknowledges that awards of stock options to non-executive directors is not in line with UK practice. However, given the Company’s NASDAQ listing, the Committee believes it is necessary to attract and retain the highest quality directors from the United States, UK and global markets. Non-executive directors will not be eligible to participate in any performance-based incentive plans.

Each non-executive director will also be entitled to reimbursement of reasonable expenses.

Shareholder voting on remuneration matters at AGM

The table below sets out the previous votes cast at our AGM in June 2021 in respect of the Annual Remuneration Report.

 

		For				% For				Against				% Against				Votes Total				% of ISC Voted				Withheld
Annual Remuneration report (Resolution 2)			49,042,234				99.73	%			134,370				0.27	%			49,176,604				—	%			13,741

Withheld votes are not counted when calculating voting outcomes.

On behalf of the Board,

 

/s/ John Berriman

John Berriman

Chair of the Compensation Committee   30 May 2022

 

47

Independent Auditor’s Report to the Members of Autolus Therapeutics plc

For the 12 months ended 31 December 2021

 

Opinion

In our opinion:

 

•

Autolus Therapeutics plc’s group financial statements and parent company financial statements (the “financial statements”) give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2021 and of the group’s loss for the year then ended;

 

•

the group financial statements have been properly prepared in accordance with UK adopted international accounting standards;

 

•

the parent company financial statements have been properly prepared in accordance with FRS 102, United Kingdom Generally Accepted Accounting Practice; and

 

•

the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Autolus Therapeutics plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended 31 December 2021 which comprise:

 

Group		Parent company
Consolidated balance sheet as at 31 December 2021		Balance sheet as at 31 December 2021
Consolidated income statement and other comprehensive loss for the year ended 31 December 2021		Statement of changes in equity for the year ended 31 December 2021
Consolidated cash flow statement for the year ended 31 December 2021		Related notes 1 to 10 to the financial statements including a summary of significant accounting policies
Consolidated statement of changes in equity for the year ended 31 December 2021
Related notes 1 to 28 to the financial statements, including a summary of significant accounting policies

The financial reporting framework that has been applied in their preparation of the group financial statements is applicable law and UK adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

 

48