Cempra Pharmaceuticals (NASDAQ:CEMP) CEO Prabhavathi Fernandes is getting rewarded for her stewardship of the antibiotics developer.
The Chapel Hill company is giving Fernandes a 14.2 percent raise and for the first time, formally establishing her compensation with an employment contract. The contract sets her annual base salary at $447,200 with a bonus opportunity of not less than 50 percent of her salary.
Fernandes received $391,356 base pay in 2012 but she – like other Cempra executives and employees– worked as an at-will employee; she could leave the company with short notice and go to a competitor.
The employment contract locks in Fernandes for five years, with one-year extensions by mutual agreement by Fernandes and Cempra’s board of directors. Perhaps most important to Cempra, the contract has a non-compete clause for the duration of the agreement and for 18 months after.
Besides leading Cempra to an initial public stock offering last year, Fernandes has secured several wins for the company. In May, the Biomedical Advanced Research and Development Authority awarded Cempra a five-year contract valued at up to $58 million to develop its antibiotic candidate solithromycin to treat infections in children and also as a treatment for bioterror infections. That contract followed a $70 million licensing deal with Japan’s Toyama Chemical Co. for solithromycin.