DEF 14A 1 lnvta2022_def14a.htm INVITAE CORP - DEF 14A INVITAE CORPORATION - DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

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INVITAE CORPORATION

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Invitae Corporation

1400 16^thStreet
San Francisco, California 94103
(415) 374-7782

April 21, 2022

Dear Stockholder:

From the discovery of the DNA double stranded helix to the Human Genome project, which provided a blueprint of our biology, we are now engaged in a race to define a new means of understanding and improving health and medicine. Over the past decade, medical genetics has informed and improved the lives of millions of patients, but the next 10 years is expected to usher in a new age of healthcare innovation and practice in which nearly every person will benefit from the understanding of that blueprint to foresee and act upon their risks, specifically address their conditions and improve their health outlook.

The development of hundreds of genomic tests has been an important stepping-stone toward this new era, but those tests on their own represent only the raw inputs of where genomic medicine is going, and Invitae is doing the important work to connect personal and population-based genetic data to every aspect of medicine and the healthcare ecosystem, ushering in the genomic medicine era - today.

Our platform of tests, information, decision support and workflow tools is designed to inform and empower healthcare providers everywhere and enable billions of people to understand and act on the most fundamental of health information that makes them unique. Integral to our mission is that each patient owns and controls their data and can choose to apply that information to benefit their families and the healthcare ecosystem. Applied broadly, this information will inform lifestyle and treatment decisions, improve outcomes, speed medical innovation and reduce costs among all global healthcare systems.

The pace of change has been astonishing, and yet it is only accelerating. Please join us as we launch a new genomic platform for healthcare, explore the full potential of our collective health and reap the rewards of truly personal health for patients, our partners, our company and society.

You are cordially invited to attend the 2022 Annual Meeting of Stockholders of Invitae Corporation, which will be held at 4:00 p.m., Pacific Time, on Monday, June 6, 2022. In light of the ongoing COVID-19 pandemic and to protect the health of our employees, stockholders and the community, the Annual Meeting will be a completely virtual meeting of stockholders conducted via live audio webcast. You will be able to attend the Annual Meeting by visiting www.virtualshareholdermeeting. com/NVTA2022 and using the 16-digit control number included in your proxy materials. We currently expect to return to an in person meeting for our 2023 annual meeting of stockholders.

The formal notice of the Annual Meeting and the Proxy Statement have been made a part of this invitation.

Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. After reading the Proxy Statement, please promptly vote. Your shares cannot be voted unless you vote by Internet or telephone, vote as instructed by your broker, or vote your shares electronically at the Annual Meeting.

We look forward to seeing you at the meeting.

Sincerely,

Sean E. George, Ph.D.

President and Chief Executive Officer

INVITAE CORPORATION • 2022 Proxy Statement 1

Notice of Annual Meeting of Stockholders

To Be Held on Monday,
June 6, 2022

To Our Stockholders:

Invitae Corporation will hold its 2022 Annual Meeting of Stockholders at 4:00 p.m., Pacific Time, on Monday, June 6, 2022. In light of the ongoing COVID-19 pandemic and to protect the health of our employees, stockholders and the community, the Annual Meeting will be a completely virtual meeting of stockholders conducted via live audio webcast. You will be able to attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/NVTA2022 and using the 16-digit control number included in your proxy materials.

We are holding this Annual Meeting:

•

to elect two Class III directors to serve until the 2025 annual meeting of stockholders or until their successors are duly elected and qualified;

•

to approve an amendment to our Amended and Restated Certificate of Incorporation (“Restated Certificate”) to increase the number of authorized shares of our common stock, $0.0001 par value per share, from 400,000,000 shares to 600,000,000 shares;

•

to approve, on a non-binding advisory basis, the compensation paid by us to our named executive officers as disclosed in the attached Proxy Statement;

•

to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2022;

•

to consider a stockholder proposal to elect each director annually, if properly presented at the Annual Meeting; and

•

to transact such other business as may properly come before the Annual Meeting and any adjournments or postponements of the Annual Meeting.

Stockholders of record at the close of business on April 8, 2022 are entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements of the Annual Meeting.

It is important that your shares be represented at this meeting. Whether or not you expect to attend the virtual Annual Meeting, please vote at your earliest convenience by following the instructions in the Notice of Internet Availability of Proxy Materials you received in the mail. Please review the detailed instructions on pages 48 and 49 regarding your voting options.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on June 6, 2022.

The Proxy Statement and Annual Report are available at www.proxyvote.com

By Order of the Board of Directors,

Thomas R. Brida
General Counsel, Chief Compliance Officer and Secretary
San Francisco, California
April 21, 2022

INVITAE CORPORATION • 2022 Proxy Statement 2

Table of Contents

Information Concerning Voting and Solicitation	4

Proposal 1: Election of Directors	5
Directors and Nominees	5
Director Nominations	8
Director Independence	9
Compensation Committee Interlocks and Insider Participation	9
Board Meetings	9
Board Committees	9
Corporate Governance	11
Certain Relationships and Related Transactions	14
Director Compensation	15

Officers	17
Executive Officers	17
Other Section 16 Officer	18

Executive Compensation	19
Compensation Discussion and Analysis	19
Compensation Committee Report	28
Summary Compensation Table	29
Grants of Plan-Based Awards Table	30
Outstanding Equity Awards at Fiscal Year-End Table	31
Potential Payments upon Termination or Change in Control	32
Option Exercises and Stock Vested Table	33
CEO Pay Ratio	34
Equity Compensation Plan Information	34

Security Ownership of Certain Beneficial Owners and Management	35

Report of the Audit Committee	37

Proposal 2: Amendment to our Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock	38
Background	38
Proposed Amendment	38
Reasons for the Amendment	38
Rights of Additional Authorized Shares	39
Potential Effects of the Amendment	39
Effectiveness of the Amendment and Required Vote	40

Proposal 3: Non-Binding Advisory Vote on Executive Compensation	41

Proposal 4: Ratification of Appointment of Independent Registered Public Accounting Firm	42
Principal Accountant Fees and Services	42
Pre-approval Policies and Procedures	42

Proposal 5: Stockholder Proposal to Elect Each Director Annually	43

Delinquent Section 16(a) Reports	46

Stockholder Proposals and Business for the 2023 Annual Meeting	46

Other Matters	47

Questions and Answers About the Proxy Materials and the Annual Meeting	48

Note Regarding Forward-Looking Statements	52

Appendix A	53

INVITAE CORPORATION • 2022 Proxy Statement 3

YOU MAY VOTE IN ONE OF THE FOLLOWING WAYS:
	INTERNET	TELEPHONE	MAIL	AT THE VIRTUAL MEETING
	Stockholders of record may vote online at www. proxyvote.com	Stockholders of record may call toll-free 1-800-690-6903	Follow the instructions in your proxy materials	Visit www.virtualshareholdermeeting.com/NVTA2022 and use the 16-digit control number included in your proxy materials

•	Our Class I directors are Geoffrey S. Crouse and Christine M. Gorjanc and their terms will expire at the 2023 annual meeting of stockholders;
•	Our Class II directors are Kimber D. Lockhart and Chitra Nayak and their terms will expire at the 2024 annual meeting of stockholders; and
•	Our Class III directors are Eric Aguiar and Sean E. George and their terms will expire at the Annual Meeting.

	•	Director Independence. 5 of the 6 individuals currently serving as directors are independent within the meaning of the listing standards of the New York Stock Exchange.
	•	Director Diversity. 50% of our directors identify as female and 33% as an underrepresented minority.
	•	Director Tenure. 66% of our directors have more than 5 years of tenure. The average tenure of our directors is approximately 7.8 years.
	•	Director Age. Average age of our directors is approximately 53 years.
	•	Director Skills. Our directors have the following diverse experiences and perspectives in areas that we believe are critical to the success of our business and to the creation of sustainable stockholder value: technology, biotechnology, finance, human rights and environmental sustainability, operations, risk management, cybersecurity, executive compensation and human capital management, ESG, global leadership, M&A, and public board experience.

•	presides at all meetings of our board of directors, and has the authority to call, and will lead, non-employee director sessions and independent director sessions;
•	approves board meeting agenda items and schedules;
•	helps facilitate communication between senior management and the independent directors;
•	works with committee chairs to oversee coordinated coverage of board responsibilities;
•	serves as an advisor to the Chief Executive Officer;
•	presides over all meetings of stockholders; and
•	participates and provides leadership on Chief Executive Officer performance evaluation and succession planning.

	1.	Healthcare for humanity: Continue to support patients through all stages of life with an affordable, integrated solution of health information, digital solutions and data services that we believe will shape the genomic medicine era.
	2.	Diversity, equity and inclusion: Build a diverse workforce, cultivate a workplace where everyone can be engaged, and advance inclusive research and health equity.
	3.	Environmental stewardship: Make environmental issues such as reducing, reusing, and recycling a priority. Work to reduce the emissions footprint of the company with the eventual goal of achieving carbon neutrality.
	4.	Transparency and trust: Continue to prioritize transparency, trust and corporate governance to hold Invitae accountable, measure success scientifically and ensure our long-term commitments to our patients are met.

	•	As of December 31, 2021, approximately 63% of our U.S. workforce is White, 18% Asian, 8% Hispanic or Latino, 5% Black or African American, 4% two or more races and 2% not known based on our payroll system and individual self-identification. On our management team, 37% are people who identify as non-White.
	•	Our workforce is approximately 55% female, and our management team is 25% female.
	•	20% of employees are members of one or more of our nine active employee resource groups, including InvitASIANS, Latinx, BlackGenX, Rainbow Connection, Women in HealthCare, Vets-in-Genetics, Genetic Counseling at Invitae, Peer Soul Support Team and Women in Tech.
	•	Our Enterprise Crisis Management Team along with our Employee Health and Safety Administrator comprise the Steering Committee for pandemic response responsible for ensuring our COVID-19 policies and practices meet all necessary standards and regulations. We instituted an EH&S Pandemic Plan across our Company. Our production facilities remained operational during the pandemic.

	•	We engaged a third-party expert to complete an in-depth analysis of our 2020 and 2021 emissions, water and waste data. With this insight, we established a baseline from which to facilitate ongoing measuring, managing and reporting of these factors. This foundation better positions us to improve internal tracking systems, launch eco-friendly initiatives, establish normalized / carbon intensity metrics, and set science-based targets to reduce our environmental footprint over time.
	•	We established a Green Ambassadors Program (GAP) to coordinate our facility environmental sustainability-related practices. The role of the GAP is to advance our environmental sustainability programs (including carbon tracking), as well as to educate employees and encourage the use of best practices across sites.

	•	Our board of directors reflects diversity in experience, skills, race, ethnicity, age and gender. As of December 31, 2021, 50% of our board members identify as female and 33% as an underrepresented minority. Our board of directors strives to find directors who are experienced and dedicated individuals with diverse backgrounds, perspectives and skills.
	•	We have ethics and compliance policies and programs, including a Code of Business Conduct and Ethics that applies to each of our directors, officers and employees, and training on these policies, with compliance tracked and overseen by our Chief Compliance Officer.
	•	In January 2022, we adopted a Supplier Code of Conduct, which details our expectations for our suppliers and their subcontractors to comply with applicable laws and to operate their businesses in an ethical and sustainable manner.
	•	We concurrently instituted a Human Rights Policy, which outlines the fundamental rights, freedoms and standards of treatment to which we believe all people are entitled. These rights include respect for labor rights, treating all people with dignity and respect, enabling a healthy and safe work environment, promoting ethical behavior and respecting privacy. We recognize that we are part of the communities in which we operate, and as part of our mission, we believe respect for human rights is integral to our business.
	•	We have a robust privacy and data security program directed by our Chief Privacy Officer (CPO) and our Chief Information Security Officer (CISO). Ensuring that people own and control their genetic data has been one of our core principles from inception. We are committed to the privacy and security of all protected health information we create, receive, use, disclose and transmit. Our privacy practices and policies are posted on our privacy website at www.invitae.com/privacy.
	•	As part of risk oversight, our board of directors oversees patient privacy and data security and receives a quarterly update from the CISO and our General Counsel. Our CPO reports to the General Counsel (who is also our Chief Compliance Officer). The CPO chairs our Data Use Committee (DUC), which is focused on data usage and sharing activities with the lens on privacy and regulatory compliance based on HIPAA, CLIA, GDPR (General Data Protection Regulation), the Common Rule and other such domestic and foreign rules. As a provider of clinical genetic testing services, we are a “covered entity” subject to the HIPAA Privacy Rule, Security Rule and Breach Notification Rule. Our Privacy and Security Compliance Program is subject to inspection by the Secretary of Health and Human Services (HHS) and the Office of Civil Rights (OCR) for the purpose of complaint investigation and monitoring our compliance with these three rules. We take a holistic approach toward information security with an equal focus on both its critical components—the people and the computing environment—to safeguard and protect customer data.

•	compliance with laws, rules and regulations;
•	confidentiality;
•	conflicts of interest;
•	corporate opportunities;
•	competition and fair dealing;
•	payments or gifts from others;
•	health and safety;
•	insider trading;
•	protection and proper use of company assets; and
•	record keeping.

Name	Fees earned or paid in cash ($)	Stock awards ($)	Option awards ($)	⁽¹⁾	All other compensation ($)	Total ($)
Eric Aguiar, M.D.	75,250	401,350	132,516		—	609,116
Geoffrey S. Crouse	55,000	296,650	98,825		—	450,475
Christine M. Gorjanc	60,000	296,650	98,825		—	455,475
Kimber D. Lockhart	42,500	296,650	98,825		—	437,975
Chitra Nayak	38,750	296,650	98,825		—	433,225

(1)	Amounts represent the aggregate fair value of the option awards computed as of the grant date of each award in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC 718) for financial reporting purposes, rather than amounts paid to or realized by the named individual. See the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of assumptions made in determining the grant date fair value and compensation expense of our stock options. There can be no assurance that option awards will be exercised (in which case no value will be realized by the individual) or that the value on exercise will approximate the fair value as computed in accordance with ASC 718.
	The following table sets forth the aggregate number of shares of common stock underlying option awards outstanding on December 31, 2021:

	Name	Number of shares
	Eric Aguiar, M.D.	37,400
	Geoffrey S. Crouse	85,400
	Christine M. Gorjanc	87,900
	Kimber D. Lockhart	30,900
	Chitra Nayak	60,400

Name	Age	Position
Sean E. George, Ph.D.	48	President, Chief Executive Officer, Director and Co-Founder
Yafei (Roxi) Wen	49	Chief Financial Officer
Thomas R. Brida	51	General Counsel, Chief Compliance Officer and Secretary
Kenneth D. Knight	61	Chief Operating Officer
Robert L. Nussbaum, M.D.	72	Chief Medical Officer

Table of Contents

Compensation Discussion and Analysis		19
Executive Summary		20
Compensation Philosophy		23
Compensation Components		23
Fiscal 2021 Compensation		24
Compensation Governance Components		27
Compensation Process		27

Compensation Committee Report		28

•	the needs of our customers;
•	motivating our employees to serve our customers; and
•	our long-term stockholder value.

(1)	The grant date value of the annual equity grants in 2021 was based on a stock price of $34.90 on April 30, 2021.
(2)	The grant date value of the annual equity grants in 2020 based on a stock price of $16.17 on June 12, 2020 and $34.33 on September 3, 2020.
(3)	The value of the PRSUs earned for 2021 based on the closing stock price of $7.26 on March 12, 2022, the effective date of the compensation committee’s certification of the number of 2021 PRSUs that were earned.
(4)	The value of the PRSUs earned for 2020 based on the closing stock price of $42.70 on March 12, 2021, the effective date of the compensation committee’s certification of the number of 2020 PRSUs that were earned.
(5)	The values reported in the Summary Compensation Table are different than the total earned because they are based on the grant date value of the annual equity awards and the target values of the PRSUs.

What We Do		What We Do Not Do
	Rigorous, objective performance goals		No “golden parachute” gross-ups
	Limited perquisites		No dividends paid on unvested shares
	Clawback policy covering cash incentives and stock awards		No options/SARs granted below fair market value
	Independent compensation consultant and compensation committee		No repricing of options without stockholder approval
	Annual risk assessment of compensation policies and programs		No excessive severance
			No guaranteed salary increases, bonuses, or long-term incentive awards

•	*Base Salary*: A market salary at competitive levels that sufficiently covers a fixed income component the employee can rely on. The fixed salary is set at a level that provides the ability to attract talent and promote long-term retention.
•	*Annual Incentive*: PRSUs are earned based on achieving goals set annually by management and the compensation committee. In 2021, the named executive officers were eligible for the shares based on achievement of certain operating targets.
•	*Time-Based Restricted Stock Unit Awards*: Long-term equity incentive earned based on continued employment over a period of three years.
•	*Option Awards*: Option awards reward our named executive officers with stock price appreciation and are intended to ensure retention of our named executive officers by using longer vesting periods.

	2021 Target Incentive Amounts
Name	PRSU (#)
Sean E. George, Ph.D.	59,700
Yafei (Roxi) Wen	19,900
Kenneth D. Knight	19,900
Thomas R. Brida	19,900
Robert L. Nussbaum, M.D.	19,900
Shelly D. Guyer	—

Annual Incentive Program Performance Goal	% of 2021 Target PRSUs
Revenue	25%
Selling and Marketing Expense as Percent of Revenue*	25%
Accession Volume	25%
Cash Burn (excluding acquisitions)*	25%

Proxy Statement

PROPOSAL 1 Election of Directors

Directors and Nominees

Director Nominations

Director Independence

Compensation Committee Interlocks and Insider Participation

Board Meetings

Board Committees

Corporate Governance

Certain Relationships and Related Transactions

Director Compensation

Officers

Executive Officers

Other Section 16 Officer

Executive Compensation

Compensation Discussion and Analysis

Executive Summary

Compensation Philosophy

Compensation Components

Fiscal 2021 Compensation

Compensation Governance Components

Compensation Process

Compensation Committee Report

Summary Compensation Table

Grants of Plan-Based Awards Table

Outstanding Equity Awards at Fiscal Year-End Table

Potential Payments upon Termination or Change in Control

Option Exercises and Stock Vested Table

CEO Pay Ratio

Equity Compensation Plan Information

Security Ownership of Certain Beneficial Owners and Management

Report of the Audit Committee

PROPOSAL 2

Amendment to our Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock

Background

Proposed Amendment

Reasons for the Amendment

Rights of Additional Authorized Shares

Potential Effects of the Amendment

Effectiveness of the Amendment and Required Vote

PROPOSAL 3

Non-Binding Advisory Vote on Executive Compensation

PROPOSAL 4

Ratification of Appointment of Independent Registered Public Accounting Firm

Principal Accountant Fees and Services

Pre-approval Policies and Procedures

PROPOSAL 5

Stockholder Proposal to Elect Each Director Annually

Delinquent Section 16(a) Reports

Stockholder Proposals and Business for the 2023 Annual Meeting

Other Matters

Questions and Answers About the Proxy Materials and the Annual Meeting

Note Regarding Forward-Looking Statements

Appendix A

PROPOSAL 1
Election of Directors

	Revenue	Payout
2021 Threshold	$371.25 million	75%
2021 Target	$495 million	100%
2021 Maximum	$610 million	123%
2021 Actual	$460.4 million	93%

	Selling and Marketing Expense as Percent of Revenue*	Payout
2021 Threshold	58.75%	75%
2021 Target/Maximum	47%	100%
2021 Actual	44%	100%

	2021 Incentive Plan Payouts
Name	PRSU (#)
Sean E. George, Ph.D.	44,117
Yafei (Roxi) Wen	14,705
Kenneth D. Knight	14,705
Thomas R. Brida	14,705
Robert L. Nussbaum, M.D.	14,705
Shelly D. Guyer	—

Name	RSU (#)
Sean E. George, Ph.D.	134,200
Yafei (Roxi) Wen	125,000
Kenneth D. Knight	44,700
Thomas R. Brida	44,700
Robert L. Nussbaum, M.D.	44,700
Shelly D. Guyer	61,183

	2021 Options
Name	Option (#)
Sean E. George, Ph.D.	69,500
Yafei (Roxi) Wen	–
Kenneth D. Knight	23,200
Thomas R. Brida	23,200
Robert L. Nussbaum, M.D.	23,200
Shelly D. Guyer	–

•	*Insider Trading Policy*: This policy is distributed to all employees, directors and contractors. All employees, directors and contractors are prohibited from buying or selling during predetermined closed window periods. In addition, executive officers and directors are required to obtain pre-clearance from our General Counsel or Chief Financial Officer prior to making any trades or entering into any 10b5-1 trading plans. All directors and executive officers are required to enter into 10b5-1 plans.
•	*Hedging and Pledging*: All executive officers, directors, and employees are prohibited from hedging or pledging stock under our Insider Trading and Communications Policy. We made exceptions to our no-pledging policy for our Chief Executive Officer for real property purchase and construction costs, and for an employee.
•	*Claw-backs*: In April 2020, we adopted a policy pursuant to which compensation paid based on performance, including annual equity compensation, is subject to a “claw-back” policy. This policy enables the compensation committee, if it determines appropriate and subject to applicable laws, to seek reimbursement from executive officers of:

	•	the incremental portion of cash incentive awards paid to executive officers in excess of the awards that would have been paid based on the restated financial results; and
	•	the incremental share of our common stock settled for PRSUs in excess of the shares of our common stock that would have been settled for such PRSUs based on the restated financial results, or the value of such incremental shares to the extent an executive officer sells any incremental shares.

•	our executive compensation is benchmarked by our independent compensation consultant to our peers;
•	bonuses are capped;
•	our bonus plan preserves discretion to permit the compensation committee to elect not to pay otherwise achieved bonus amounts for any reason;
•	a meaningful component of compensation is equity grants with extended vesting periods designed to ensure that our executives value and focus on our long-term performance; and
•	executive compensation is subject to our “claw-back” policy.

10x Genomics*	BioMarin Pharmaceutical*	Natera
ACADIA Pharmaceuticals*	CareDx	Neogen*
Acceleron Pharma*	Exact Sciences*	Nevro
Adaptive Biotechnologies	Guardant Health	Quidel
Alnylam Pharmaceuticals*	Horizon Therapeutics*	Sarepta Therapeutics*
Arrowhead Pharmaceuticals*	iRhythm Technologies	Vir Biotechnology*

•	base salaries;
•	performance bonuses; and
•	the amount and mix of long-term, equity-based incentive awards.

SEC Form DEF 14A filed by Invitae Corporation