Proxy Statement (definitive) (def 14a)

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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. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

INCYTE CORPORATION

(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check all boxes that apply):

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No fee required.

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Fee paid previously with preliminary materials.

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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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Dear Fellow Stockholders,

In 2022, we delivered another year of double-digit revenue growth to reach $3.4 billion (+14% vs FY’21), representing a 5-year CAGR of 17%. This volume-driven sales growth was a result of the sustained strength of Jakafi® (ruxolitinib), as well as new launches within hematology/oncology across Europe and Japan. Most important, however, was the continued success of our first commercialized dermatology product, OpzeluraTM (ruxolitinib) cream, which contributed $129 million in net sales in FY’22, its first full year of commercialization, and is on track to becoming a significant revenue and growth driver for Incyte over the next several years. We also achieved additional regulatory and clinical successes across the portfolio, advancing our pipeline meaningfully at all stages of development.

Our dermatology franchise is entering a high-growth phase with Opzelura now launched in two substantial indications—as the first and only topical JAK inhibitor approved in atopic dermatitis (AD) and as the first FDA approved therapy for repigmentation of vitiligo. Over 190,000 patients have been treated with Opzelura since launch through the end of 2022 and positive patient and physician experiences are driving further adoption. Opzelura was also recently approved by the European Commission for the treatment of nonsegmental vitiligo. Beyond AD and vitiligo, we are further evaluating Opzelura in multiple other indications where there is high unmet need, including in hidradenitis suppurativa (HS), prurigo nodularis, lichen sclerosus and lichen planus. With new method-of-use U.S. patents that extend the protection of Opzelura out to 2040, we have a long runway for growth with this franchise.

We also made significant progress with our pipeline assets in 2022, achieving several important regulatory and clinical milestones across our three therapeutic areas. Within MPNs/GVHD, we presented positive early data from our proof-of concept trials of ruxolitinib in combination with zilurgisertib (ALK2) and INCB57643 (BET). We also disclosed a key new discovery asset, INCA99389 (mutant CALR), during a plenary session at the American Society of Hematology. INCA99389 has the potential to be a disease-modifying therapy for roughly 30% of patients with MF and ET. In hematology/oncology, Pemazyre® (pemigatinib) gained its second approved indication in myeloid/lymphoid neoplasms with FGFR1 rearrangement and we presented updated data from our oral small molecule PD-L1 program. In Dermatology, we presented positive Phase 2 data of povorcitinib in vitiligo and have now initiated two Phase 3 trials in moderate to severe HS following Phase 2 results. Additionally, we acquired Villaris Therapeutics, Inc., and its lead asset auremolimab, an anti-IL-15Rβ monoclonal antibody, which has the potential for durable and long-lasting repigmentation in vitiligo. Through our dedication to science and innovation, we are developing new treatments for patients with hard-to-treat diseases.

Looking ahead, we are focused on executing on our strategy and building on the success we experienced last year. With a robust and advancing pipeline and the successful early launch of Opzelura, we believe that 2023 will be another strong year for Incyte.

We remain committed to engaging with and responding to feedback from you, our stockholders, to constantly improve. Your input is vital to our success, and my fellow Directors and I would like to thank you for your continued support and investment in Incyte.

Solve On.

Hervé Hoppenot
Chairman, President and Chief Executive Officer

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Incyte Corporation
1801 Augustine Cut-Off
Wilmington, Delaware 19803

Notice of Annual Meeting of Stockholders

Wednesday, June 14, 2023

10:00 AM Eastern Daylight Time

1815 Augustine Cut-Off, Wilmington, Delaware 19803*

To the Stockholders of Incyte Corporation:

The Annual Meeting of Stockholders of Incyte Corporation, a Delaware corporation (the “Company”), will be held at the Company’s offices located at 1815 Augustine Cut-Off, Wilmington, Delaware 19803, on Wednesday, June 14, 2023, at 10:00 AM Eastern Daylight Time, for the purposes specified below:

Purposes:

Elect nine directors to serve until the 2024 Annual Meeting of Stockholders and thereafter until their successors are duly elected and qualified;

Approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers;

Approve, on a non-binding, advisory basis, the frequency of future non-binding advisory stockholder votes on the compensation of the Company’s named executive officers;

Approve an amendment to the Company’s Amended and Restated 2010 Stock Incentive Plan;

Approve an amendment to the Company’s 1997 Employee Stock Purchase Plan;

Ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2023; and

Transact such other business as may properly come before the Annual Meeting of Stockholders and any postponement or adjournment of the Annual Meeting.

Record Date:

April 18, 2023—Stockholders of record as of the close of business on April 18, 2023 are entitled to notice of and to vote at the Annual Meeting and any postponement or adjournment thereof.

It is important that your shares be represented at this meeting. Even if you plan to attend the meeting, we hope that you will vote as soon as possible. Voting now will ensure your representation at the Annual Meeting regardless of whether you attend in person. You may vote over the internet, by telephone or by mailing the enclosed proxy card or voting instruction form. Please review the instructions on pages 1 and 86 of the attached Proxy Statement and your proxy card or voting instruction form regarding each of these voting options.

	By Order of the Board of Directors

	Maria E. Pasquale
	Secretary

April 28, 2023

We intend to hold our Annual Meeting in person. However, we continue to monitor the coronavirus (COVID-19) situation and are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. If stockholder attendance is not permitted or we determine that it is not in the best interest of our employees, stockholders and community to permit stockholder attendance, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. If we take this step, we will announce the decision to do so via a press release, and will post details on how to participate on our website and file additional proxy materials with the SEC.

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Table of Contents

1	Proxy Statement Summary
2	Performance Highlights
8	Corporate Governance Highlights
11	Stockholder Engagement
13	Executive Compensation Highlights
15	Global Responsibility
21	Proposal 1 Election of Directors
	26	Board Committees
	29	Compensation of Directors
	32	Corporate Governance
40	Proposal 2 Advisory Vote to Approve Executive Compensation
	41	Executive Compensation
		48	Compensation Discussion and Analysis
		62	Compensation Committee Report
		64	Executive Compensation Tables
	77	CEO Pay Ratio
	78	Pay Versus Performance
	82	Equity Compensation Plan Information
98	Report of the Audit and Finance Committee of the Board
83	Proposal 3 Advisory Vote on Frequency of Future Votes on Executive Compensation
84	Proposal 4 Amendment of Amended and Restated 2010 Stock Incentive Plan
93	Proposal 5 Amendment of 1997 Employee Stock Purchase Plan
96	Proposal 6 Ratification of Independent Registered Public Accounting Firm
99	Security Ownership of Certain Beneficial Owners and Management
101	Other Matters
103	Frequently Asked Questions
A-1	Appendix A: Note Regarding Forward-Looking Statements

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Proxy Statement Summary

Meeting Information

	Time and Date:			10:00 AM EDT, June 14, 2023
	Place:			1815 Augustine Cut-Off* Wilmington, DE 19803
	Record Date:			April 18, 2023
	Admission:			Please follow the instructions contained in this Proxy Statement
	Mail Date:			The Proxy Availability Notice will be mailed to stockholders on or about April 28, 2023

Voting Matters

PROPOSAL		BOARD’S VOTING RECOMMENDATION
1	Election of Directors	FOR each Nominee
2	Advisory Vote to Approve Executive Compensation	FOR
3	Advisory Vote on Frequency of Future Advisory Votes on Executive Compensation	FOR Every Year
4	Approve Amendment of the Amended and Restated 2010 Stock Incentive Plan	FOR
5	Approve Amendment of the 1997 Employee Stock Purchase Plan	FOR
6	Ratification of Independent Registered Public Accounting Firm	FOR

How to Vote

You may vote using any of the following methods:


INTERNET	TELEPHONE	MAIL	IN PERSON
Stockholders of record may vote online at www.envisionreports.com/INCY	Stockholders of record may call toll-free 1-800-652—VOTE (8683)	Follow the instructions in your proxy materials.	You may obtain directions to the Annual Meeting by contacting our Company’s Investor Relations Department at (302) 498-6700.

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Performance Highlights

2022 Financial Performance

Incyte has consistently demonstrated strong financial execution over the past several years and in 2022, delivered another year of double-digit growth in revenues to $3.4 billion. Our product revenues grew 18% to $2.7 billion, driven by our expanding hematology/oncology portfolio and the increasing contribution of Opzelura with the new launches in atopic dermatitis and vitiligo. During the year, we achieved 5 regulatory approvals across the U.S., Europe and Japan for products commercialized by Incyte as well as those commercialized by our partners.

Revenues of Jakafi® (ruxolitinib), our largest product by net sales, grew 13% to reach $2.4 billion for the year, with new patient starts driving performance across our approved indications in myelofibrosis, polycythemia vera and acute and chronic graft-versus-host disease (GVHD).

Other hematology and oncology revenues grew 14% to reach $209 million with the continued uptake of Pemazyre® (pemigatinib) for cholangiocarcinoma in the U.S., Europe and Japan and the ongoing launch of Minjuvi for DLBCL, which has expanded into 4 key European markets and where we continue to seek reimbursement in additional countries.

An important achievement in 2022 was the approval and successful launch of Opzelura™ (ruxolitinib) cream as a treatment for the repigmentation of vitiligo. This approval represented an important milestone for the 1.5 million+ vitiligo patients in the U.S. for whom there were no FDA-approved therapies for repigmentation. This is the second substantial opportunity for Opzelura, following the approval in atopic dermatitis in September 2021. There are an estimated 5.5 million drug-treated patients living with atopic dermatitis in the U.S. Over 190,000 patients have been treated with Opzelura since launch through the end of 2022 and the growth in new patients continues to be strong week over week. Importantly, feedback for Opzelura in both indications continues to be extremely positive from physicians, patients and patient advocacy groups. Recently, Opzelura was approved as the first and only treatment for repigmentation for vitiligo in Europe. Net sales of Opzelura for the full year reached $129 million and were $61 million in the fourth quarter.

In addition to our product revenues, we receive royalties on Jakavi® (ruxolitinib) and Tabrecta® (capmatinib), commercialized by Novartis, and on Olumiant® (baricitinib), commercialized by Eli Lilly and Company. Total royalties decreased 15% in 2022 to $483 million primarily due to negative impacts of unfavorable changes in foreign currency exchange rates and the decrease in net product sales of Olumiant for use as a treatment for COVID-19.

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Performance Highlights

NM = not meaningful; NA = not available

(1)

Monjuvi revenues recognized by MorphoSys and included in our collaboration loss sharing line item on our consolidated statement of operations for the year ended December 31, 2022.

(2)

Totals may not add due to rounding.

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Performance Highlights

2022 and YTD Regulatory and Clinical Achievements

Throughout 2022 and year-to-date, we achieved numerous important milestones. These are summarized in the graphic below and described in more detail thereafter.

MLN= myeloid/lymphoid neoplasms; GVHD = graft-versus-host disease; AA= alopecia areata; NSCLC = non-small cell lung cancer; MCC = Merkel cell carcinoma; HS= hidradenitis suppurativa; LP= lichen planus; LS= lichen sclerosus; ASH= American Society of Hematology

(1)

Retifanlimab licensed from MacroGenics

Myeloproliferative Neoplasms and Graft-versus-Host Disease (MPNs and GVHD)

In late 2022, we were granted pediatric exclusivity, which added six months to the expiration of all ruxolitinib patents then listed in FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book), thereby extending the patent expiry for Jakafi through December 2028.

Our LIMBER (Leadership In MPNs and GVHD BEyond Ruxolitinib) program focuses on developing new therapies to improve and expand upon available therapeutic options for patients living with MPNs and GVHD. Zilurgisertib (ALK2) and INCB57643 (BET) combination trials with ruxolitinib twice-daily (BID) are ongoing. Initial Phase I/II results evaluating zilurgisertib in combination with ruxolitinib were presented at the 64th American Society of Hematology (ASH) Annual Meeting 2022, and demonstrated an observed reduction in post-dose hepcidin and improvements in anemia among patients treated with the combination, suggesting the potential for therapeutic activity. We also presented new research detailing the development and mechanism of action of INCA33989, an Incyte-discovered, investigational novel anti-mutant calreticulin (CALR)-targeted monoclonal antibody, during the Plenary Scientific Session at ASH. INCA33989 binds with high affinity to mutant CALR and inhibits oncogenesis, the process of cells becoming cancerous, in cells expressing this oncoprotein. CALR mutations are responsible for disease development in approximately 25-35% of patients with MF and ET. INCA33989 is currently expected to enter clinical studies in 2023. Following the receipt of a complete response letter in March 2023, we are continuing to work with the FDA on determining the appropriate next steps towards bringing ruxolitinib XR to patients.

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Performance Highlights

pivotal trial evaluating axatilimab monotherapy in patients with chronic GVHD in the third line setting, is ongoing. Additional trials of axatilimab are planned in patients with chronic GVHD, including a Phase II trial in combination with ruxolitinib. In 2022, Syndax announced that axatilimab was granted fast-track designation by the FDA for the treatment of patients with chronic GVHD after failure of two or more lines of systemic therapy.

Dermatology / Inflammation and AutoImmunity (IAI)

In 2022, Opzelura™ (ruxolitinib) cream was approved by the FDA for its second indication, for the treatment of nonsegmental vitiligo in adults and adolescents 12 years of age and older. In April 2023, Opzelura was approved by the European Commission for the treatment of nonsegmental vitiligo with facial involvement in adults and adolescents 12 years of age and older. Opzelura is the first and only approved treatment in the European Union (EU) for repigmentation.

The approval of Opzelura in vitiligo was based on two randomized, double-blind, vehicle-controlled Phase III studies (TRuE-V1 and TRuE-V2) evaluating the safety and efficacy of Opzelura in adolescents and adults with nonsegmental vitiligo. Treatment with 1.5% ruxolitinib cream twice daily (BID) resulted in greater improvement versus vehicle for the primary and all key secondary endpoints in both the TRuE-V1 and TRuE-V2 studies. Results, which were consistent across both studies, showed that 29.9% of patients applying ruxolitinib cream achieved >75% improvement from baseline in the facial Vitiligo Area Scoring Index (F-VASI75) at Week 24, the primary endpoint. At Week 52, approximately 50% of patients achieved F-VASI75. Furthermore, 104-week data were presented at the American Academy of Dermatology (AAD) Annual Meeting 2023, which showed the long-term efficacy and safety data for nonsegmental vitiligo patients treated with Opzelura. The most common (>1%) treatment-emergent adverse reactions in patients treated with OPZELURA were application site acne, application site pruritus, nasopharyngitis, headache, urinary tract infection, application site erythema and pyrexia.

As we work to maximize the opportunity for the dermatology franchise, we have established a broad clinical development program within dermatology that includes multiple new indications for ruxolitinib cream, as well as new products. Ruxolitinib cream is being evaluated in pediatric atopic dermatitis and in 2022, additional Phase II trials were initiated in lichen sclerosus, lichen planus and hidradenitis suppurativa (HS). Two Phase III trials in prurigo nodularis, an intensely pruritic, chronic inflammatory skin disease, were also recently initiated. There is significant potential with each of these indications given the current limited treatment options, or in some cases, lack of any FDA-approved therapies. In late 2022 and early 2023, we received four issued patents to the treatment of atopic dermatitis and to the treatment of vitiligo, with expiration dates of 2040, further broadening the protection of the Opzelura franchise.

Povorcitinib (formerly INCB54707), an oral small molecule selective JAK1 inhibitor, is currently being evaluated in patients with HS, a chronic skin condition where lesions develop as a result of inflammation and infection of the sweat glands. A Phase II study evaluating the efficacy and safety of povorcitinib in adults patients with HS met its primary endpoint, demonstrating significantly greater decreases in abscess and inflammatory nodule count versus placebo at Week 16. At the 12th Conference of the European Hidradenitis Suppurativa Foundation (EHSF) 2023, updated Week 52 results were presented, which showed that longer-term treatment with povorcitinib 75mg resulted in sustained and durable efficacy across all treatment arms. Two Phase III trials (STOP-HS1 and STOP-HS2) evaluating povorcitinib in moderate to severe HS are ongoing. At AAD 2023, we presented positive Phase II results for povorcitinib in vitiligo and a Phase II trial evaluating povorcitinib in patients with prurigo nodularis is ongoing.

In November 2022, we acquired Villaris Therapeutics, Inc., an asset-centric biopharmaceutical company focused on the development of novel antibody therapeutics for vitiligo. Its lead asset, auremolimab (VM6) is a novel, humanized anti-IL-15Rβ monoclonal antibody designed to target and deplete autoreactive resident memory T cells (TRM) that has demonstrated efficacy as a treatment for vitiligo in preclinical models. IND-enabling studies are underway, and clinical development for auremolimab is expected to begin in 2023.

Other Hematology and Oncology

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Performance Highlights

(MLNs) with FGFR1 fusion (also known as 8p11 myeloproliferative syndrome). MLNs with FGFR1 rearrangement are extremely rare and aggressive blood cancers.

Pemigatinib is currently being evaluated in a pivotal study in first-line cholangiocarcinoma. Additionally, based on findings from our solid tumor-agnostic trial (FIGHT-207) evaluating pemigatinib in patients with driver-alterations of FGF/FGFR, we initiated further study of pemigatinib in certain indications, including a Phase II study in glioblastoma (FIGHT-209).

In November 2022, updated safety and preliminary efficacy data for INCB99280 and INCB99318, our oral PD-L1 inhibitors, was presented at the Society for Immunotherapy of Cancer, and we and Mirati Therapeutics, Inc. announced a clinical trial collaboration and supply agreement to investigate the combination of INCB99280 and adagrasib, a KRASG12C selective inhibitor, in patients with KRASG12C-mutated solid tumors. We expect to initiate other combination trials evaluating INCB99280 with CTLA-4 and VEGF later this year.

In March 2023, Zynyz™ (retifanlimab-dlwr), a humanized monoclonal antibody targeting program death receptor-1 (PD-1), was approved by the FDA for the treatment of adults with metastatic or recurrent locally advanced Merkel cell carcinoma (MCC).The Biologics License Application (BLA) for Zynyz in MCC was approved under accelerated approval based on tumor response rate and duration of response (DOR). MCC is a rare and aggressive type of skin cancer that affects less than 1 per 100,000 people in the U.S.

Partnered Programs (Incyte is eligible for royalties and milestone payments)

We participate in multiple collaborative partnerships in which we are eligible to earn milestone payments and royalties on certain Incyte discovered products that we licensed to third parties. Currently, our key commercialized products include Jakavi® (ruxolitinib) and Tabrecta® (capmatinib), which are licensed to Novartis, and Olumiant® (baricitinib), which is licensed to Lilly.

In May 2022, Jakavi (ruxolitinib) was approved in Europe by the European Commission for the treatment of acute or chronic GVHD in patients aged 12 years and older who have inadequate response to corticosteroids or other systemic therapies.

In June 2022, Tabrecta (capmatinib) was approved in Europe by the European Commission as monotherapy treatment of adults with advanced non-small cell lung cancer (NSCLC) harboring alterations leading to mesenchymal-epithelial-transition factor gene (MET) exon 14 (METex14) skipping who require systemic therapy following prior treatment with immunotherapy and/or platinum-based chemotherapy.

In 2022, Olumiant (baricitinib) was approved in the U.S. for the treatment of adults with severe alopecia areata, becoming the first and only systemic treatment in the indication. Olumiant was also approved as a treatment for alopecia areata in Europe and Japan.

Discovery Capabilities

Our approach to drug discovery, driven by our core competencies in medicinal chemistry and cellular and translational biology, has enabled us to bring forth numerous drug candidates into clinical development and through regulatory approval. We have established a focused set of drug discovery capabilities in-house, including target validation, high-throughput screening, medicinal chemistry, computational chemistry, pharmacological and translational sciences, ADME (absorption, distribution, metabolism and excretion) and toxicology assessment. We augment these capabilities through a network of collaborations with academic partners and contract research organizations with relevant expertise. In addition to our established small molecules expertise, we have expanded our drug discovery capabilities to include monoclonal antibody discovery in-house and access to bi-specific antibody discovery capabilities.

Our discovery process is target- and pathway-centric and leverages cross-program knowledge to identify and prosecute novel points of synergy, and our areas of focus are primarily in oncology and inflammation and autoimmunity.

Clinical Development Pipeline

Our pipeline is broad and diverse spanning across multiple mechanisms of action and diseases, all with the same goal of developing therapies that help to address unmet needs of patients and to ultimately be able to make a meaningful difference in the lives of patients and their caregivers.

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Performance Highlights

The chart below highlights some of our clinical programs across each of our therapeutic areas as we continue to prioritize investment in research and development in areas where there is a significant unmet medical need.

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Corporate Governance Highlights

Our Board of Directors

					Committee Membership
Name and Primary Occupation	Director Since	Age	Independent	Other Outside Public Boards	Compensation	Audit and Finance	Nominating and Corporate Governance	Science and Technology
Hervé Hoppenot—Chairman of the Board President and Chief Executive Officer Incyte Corporation	2014	63		1
Julian C. Baker—Lead Independent Director Managing Partner Baker Brothers Investments	2001	56	✓	2
Jean-Jacques Bienaimé Chief Executive Officer BioMarin Pharmaceutical Inc.	2015	69	✓	1
Otis W. Brawley, M.D. Bloomberg Distinguished Professor of Oncology and Epidemiology Johns Hopkins University	2021	63	✓	3
Paul J. Clancy Former Executive Vice President and Chief Financial Officer Alexion Pharmaceuticals, Inc.	2015	61	✓	3
Jacqualyn A. Fouse, Ph.D. Former Chief Executive Officer Agios Pharmaceuticals, Inc.	2017	61	✓	1
Edmund P. Harrigan, M.D. Former Senior Vice President of Worldwide Safety and Regulatory Pfizer Inc.	2019	70	✓	2
Katherine A. High, M.D. Former President, Therapeutics Asklepios Biopharmaceutical, Inc.	2020	71	✓	1
Susanne Schaffert, Ph.D. Former President, Novartis Oncology.	2022	56	✓	0

Committee Chair

Financial Expert

Member

Board Skills and Experience

Our Board is made up of a diverse group of individuals with various pertinent areas of expertise. Continuous refreshment has led to a complementary mix of new, mid-term and seasoned directors. We believe this group of directors collectively has the skills and experience to support Incyte in the achievement of our long-term goals.

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Corporate Governance Highlights

Matrix of Board Nominees

Expertise

Hoppenot

Baker

Bienaimé

Brawley

Clancy

Fouse

Harrigan

High

Schaffert

Biopharma Industry

✓

Operational Leadership

✓

International

✓

Drug Discovery, Development & Regulatory

✓

Commercial

✓

Financial

✓

Gender

Male

✓

Female

✓

Additional Information

PhD/MD

✓

Attendance

100%

89%

100%

94%

93%

100%

Independence

✓

(1)

One member identifies as an underrepresented minority. An underrepresented minority means an individual who self-identifies as one or more of the following: Black or African American, Hispanic or Latinx, Asian, Native American or Alaskan Native, Native Hawaiian or Pacific Islander, or Two or More Races or Ethnicities.

(2)

One member identifies as LGBTQ+

Board Evaluation and Refreshment

At least annually, the Board assesses its composition, taking into consideration: the knowledge, experience and diverse perspectives of its directors; each individual director’s performance and contributions to the Board and its committees; the other time commitments of directors; and other factors the Board deems appropriate, such as independence, absence of conflicts and lack of any reputational risks. The Board weighs these factors with Incyte’s priorities and needs. Our directors serve one-year terms and all continuing directors are subject to our stockholders’ votes every year.

As our Board has done in the past, when it sees a current or future need, it undertakes a thorough search for new directors. In the past five years we have added four new independent directors, with an emphasis on strengthening the Board’s expertise in the areas of drug discovery, clinical development and global commercialization, given Incyte’s extensive development portfolio across hematology/oncology and dermatology. Dr. Schaffert joined our Board in October 2022 and brings significant executive leadership experience across clinical development, marketing and sales, finance and commercialization in the global pharmaceutical and biotechnology industries, with a focus on oncology, immuno-oncology and cell therapy.

Board Diversity

Our Board consists of a diverse group of highly skilled and experienced leaders who bring both different perspectives and areas of expertise, contributing to the overall effectiveness of the Board. Three of our nine Board nominees are women, representing 33% of our Board of Directors. This is in line with the 2022 average among S&P 500 constituents, in which 32% of all Board seats are currently held by women. Three (33%) of our directors were born in Europe, one self-identifies as an underrepresented minority and one self-identifies as LGBTQ+.

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Corporate Governance Highlights

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Stockholder Engagement

Each year, we conduct stockholder outreach to gather direct feedback on our corporate governance, compensation practices and environmental, social and governance (ESG) practices. Since 2018, we have contacted stockholders who represent the top 80% of our shares outstanding.

As a result of our annual stockholder engagement, we have implemented several significant enhancements in our corporate governance, compensation policies, ESG activities and stockholder communication practices. The following changes were made in response to feedback received:

ANNUAL OUTREACH TO
STOCKHOLDERS:

80%

OF SHARES OUTSTANDING

	Action	Year of Implementation
	Governance
✓	Adopted a proxy access bylaw	2021
✓	Adopted equity ownership guidelines	2016, amended 2021
✓	Adopted a director overboarding policy	2020
	Compensation
✓	Adjusted the executive compensation pay mix to include higher percentages of performance shares	Performance Shares added in 2018; increased % of performance shares in 2020 and 2022
✓	Established a three-year performance period for performance shares award to our CEO and other U.S.-based executive officers	2020
✓	Redesigned the director compensation program to be based on a set target value instead of fixed share grants	2019
✓	Eliminated special equity grants to the CEO	2019
✓	Added enhanced disclosure on certain items such as goal achievement	2017
	ESG
✓	Added ESG goals to our Annual Incentive Plan	2022
✓	Disclosed ethnic and racial diversity data for U.S. workforce	2021
✓	Enhanced ESG disclosure	2019

Stockholder feedback in 2022 was largely positive, with investors expressing support for the progress Incyte has made in recent years. Our conversations focused on Board refreshment and diversity, executive compensation and ESG. We continue to progress in each of these areas. Beginning with Board refreshment and diversity, the graphic below highlights our improvements in this area as well as improvements related to outside Board commitments.

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Stockholder Engagement

Average number of outside public board commitments.

Changes to our executive compensation structure have also been well received. We believe that our current compensation structure, as described in more detail in subsequent pages of this Proxy Statement, strikes the right balance of motivation and retention for our executives. The graphic below shows the evolution of our executive compensation structure over the last several years.

Note that stock options and RSUs vest over 4 years while performance shares, if earned, cliff vest after 3 years.

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Executive Compensation Highlights

We have made significant progress in ensuring that our executive compensation reflects our performance. Stockholder feedback has been a significant driver of the evolution of our compensation structure.

Below is a comprehensive list of our compensation policies and policy enhancements made in our continuing effort to be responsive to issues discussed during our stockholder outreach and to address advice provided by stockholder advisory firms.

	What We Do
	✓ We pay for performance, including having a total stockholder return (TSR) component for 2022 performance shares			✓ We have a compensation clawback policy
	✓ 1/3 of executives’ target equity award value is in the form of performance shares			✓ Our Compensation Committee uses an independent compensation consultant, Compensia, and considers peer groups in establishing executive compensation
	✓ Performance shares have a three-year performance period			✓ Robust anti-hedging and anti-speculation policies in place
	✓ Robust stock ownership guidelines for our CEO, executive officers and our directors			✓ Our Compensation Committee is comprised of all independent directors
	✓ Double-trigger equity vesting in the event of a change-in-control			✓ We conduct an annual say-on-pay vote
	✓ Stock Options and RSU award have a minimum vesting period of 12 months with a vesting period over 4 years			✓ We engage proactively with our stockholders throughout the year
	✓ Performance share awards cliff vest after 3 years			✓ We require executives to plan any stock trading in advance through the use of 10b5-1 plans

	What We Don’t Do
	✗ We do not reprice stock options			✗ We do not provide golden parachute excise tax gross-ups
	✗ We do not provide single-trigger equity vesting in the event of a change-in-control			✗ We do not provide excessive perquisites for executives

Executive compensation at Incyte comprises both salary and an annual cash bonus opportunity, as well as a long-term equity compensation program that is allocated among restricted stock units, performance shares and stock options.

In early 2022, the Compensation Committee considered the result of the stockholder advisory vote, direct feedback from investors and market-driven data guidance from the Committee’s independent compensation consultant, Compensia, and decided to make the following adjustments for 2022:

•

The equity mix for U.S.-based executives was changed from 40% stock options, 30% restricted stock units and 30% performance shares to equal proportions of the total grant date target dollar value awarded

•

The 2022 equity awards total grant date target dollar values were increased as follows:

•

CEO total grant date target value was increased from $12,400,000 to $13,400,000;

•

For other executive officers, the total grant date target values increased from a range of $500,000 to $2,200,000 to a range of $500,000 to $4,200,000

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Executive Compensation Highlights

•

The cash bonus targets were increased as follows:

•

The CEO cash bonus target was increased from 100% to 110% of base salary;

•

The funding targets for other executive officers were adjusted from 50% to range between 50% and 60% of base salary based on individual roles

CEO Compensation versus Peers

The compensation of our CEO is in-line with our peer group’s compensation as disclosed in 2022 proxy reports, with Mr. Hoppenot’s at-risk compensation percentage being consistent with the peer group’s mix.

CEO AT-RISK COMPENSATION IS AT PAR WITH PEER GROUP

Median peer CEO compensation reflects 2021 compensation from the 2022 proxies or subsequent SEC filings of the peer group.

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Global Responsibility

Here at Incyte, we are committed to operating responsibly. What began over 20 years ago as a mission to help patients in need has now expanded to touch all areas of our business. We want to be sure that we are a sustainable business, not just focused on generating revenues. To define and focus our efforts, we have divided our corporate responsibility efforts into 5 main pillars spanning patients, community, team, the environment, and governance and risk management:

Incyte’s CEO and Executive Team drive our Global Responsibility initiatives, and our Board of Directors has oversight over our Global Responsibility objectives.

For the most up to date Environmental, Social and Governance information, please visit www.incyte.com/responsibility. Please note that the information provided on our website is not part of this Proxy Statement.

Based on feedback from you, our stakeholders, we have summarized some of our Global Responsibility efforts below.

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Global Responsibility

Human Capital Management

We believe that our employees are one of our greatest assets, and we strive to ensure that they are fulfilled and valued at work. We make continuous improvements to our employee support programs, focusing on employees’ development and well-being:

Area of Focus			Progress in 2022
Professional Development			✓ Increased tuition reimbursement for Master’s and Doctorate degrees by 60% and 100%, respectively ✓ Launched a LinkedIn Learning pilot, with plans for a company-wide roll-out in 2023 ✓ Established a continuing education pilot program through the University of Delaware’s Pocket MBA program
Compensation, Benefits, & Wellness			✓ Added several resources for employees, including Wellthy, Hinge, and Omada to complement our existing wellness offerings ✓ Introduced the Incyte Engaged Benefits app, a personalized compilation of benefits to make information easily accessible ✓ Continued to support employee health by not requiring employees to use PTO when sick

Recognition


	We were excited to be named as a top five biopharma employer for the 5th consecutive year based on Science’s annual survey. Incyte was recognized specifically for: ✓ being an innovative industry leader ✓ being socially responsible ✓ treating employees with respect
	For the second year in a row, Incyte was recognized as one of Newsweek’s Top 100 Most Loved Workplaces for 2022. We moved up 16 spots to #61 on the list and were one of five pharmaceutical and biotech companies included in the list. Newsweek noted that Incyte was loved because of our comprehensive physical and mental wellness benefits and our community initiatives.

Diversity

Part of valuing our employees is valuing the diverse abilities, experiences, perspectives and backgrounds within our workforce. These differences help us to operate at our best, allowing us to better serve patients in need.

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Global Responsibility

Gender Diversity

As of December 31, 2022, 52% of our global workforce were women. 41% of our global leadership positions were filled by women, a 3% increase over 2021.

Includes positions of Director and above.

Ethnic and Racial Diversity (U.S.)

As of December 31, 2022, 35% of our U.S. workforce self-reported as non-white, a 2% increase from 2021. This is similar to the 2020 United States Census data for the State of Delaware, the location of our global headquarters (approximately 41%2 non-white).

To increase transparency, in 2022 we disclosed our full EEO-1 report for our U.S. workforce for the first time. We do not collect racial diversity data outside of the U.S., given various privacy strictures.

We seek to recruit from the most diverse talent pool possible for all jobs across our organization. To strengthen this commitment, in 2022 we set an ESG target that at least 70% of open positions in the U.S. have at least one Black or Hispanic candidate in the candidate pool. We achieved that goal, and for 2023 increased the target to 75%.

Statistic calculated using the Census Bureau’s interactive data visualization tool, subtracting Delaware’s 2020 “White alone, not Hispanic or Latino” population from the total population of Delaware.

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Global Responsibility

Executive Management Team Diversity

We value diversity in all levels of our organization, including our Executive Team (“ET”). Our ET is a diverse group of individuals with a broad range of experiences and backgrounds, which we believe is conducive to innovation and creating an inclusive culture.

Three of our 13 ET members are located outside of the U.S., and therefore are not included in ethnic/racial diversity statistics.

U.S. Diversity and Inclusion Committee

To further our commitment to an inclusive culture and increase representation and opportunities for underrepresented groups, we created our U.S. Inclusion Committee. This Committee is co-chaired by our CEO and Head of Human Resources, and since its inception is making progress in 5 key areas:

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Global Responsibility

While we have made progress, we recognize that we need to continue to focus on our inclusion efforts.

Minimizing our Environmental Impact

To Incyte, being a sustainable business also means doing our part to reduce our environmental impact. We continue working to decrease emissions and increase transparency around our environmental footprint for both our leased and owned facilities.

Incyte owns buildings at our global headquarters in Wilmington, Delaware, and a biologics manufacturing site in Yverdon-les-Bains, Switzerland.

Global Headquarters—Wilmington, Delaware, USA

Our global headquarters opened in 2014, with one existing building that we renovated into laboratory and office space. Since then, we have built two additional buildings at our headquarters; one office building that opened in 2017 and one office and laboratory building that opened in January 2022. Both new buildings achieved three out of four Green Globes from the Green Building Initiative, which evaluates buildings for their environmental performance, health and wellness for building occupants, and resilience. Additionally, our headquarters is 100% landfill free and, since January 2021, has used 100% renewable energy through the purchase of renewable energy certificates to further reduce our emissions.

Biologics Manufacturing Site—Yverdon-les-Bains, Switzerland

Incyte built a biologics manufacturing site, which opened in 2021. It has several environmentally-conscious features, including energy recovery and solar panels, and the rest of the plant’s electricity is 100% sourced from hydroelectric power.

We also look to reduce the environmental impact of our leased facilities. For example, our leased offices in the U.S. are 100% landfill free. In addition, our EU Headquarters in Morges, Switzerland, has the Swiss Label Minergie P for energy efficiency and construction quality, and is powered by 100% renewable electricity.

While we continue to make operational changes to limit our environmental impact, we want to take action now to compensate for our existing Scope 1 and 2 emissions. We have chosen to do that through the purchase of short-term harvest deferral carbon credits through NCX. Our 2021 measured Scope 1 and 2 emissions were offset through NCX by partnering with Pennsylvania landowners to conserve trees that would otherwise be harvested by individual landowners for income. Our purchase of these offsets directly helps to preserve forests and support our neighbors.

Global Responsibility Goals

In 2021, we set four corporate targets we aimed to achieve by 2025. Over the past two years, we have made continued progress towards achieving these goals:

The TCFD (Task Force on Climate-related Financial Disclosures) has developed recommendations for voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders.

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Global Responsibility

Achieve operational carbon neutrality by 2025. Our key environmental target is to be operationally carbon neutral by 2025 through a combination of absolute emission reductions and offsets. We focus on green building certifications, building improvements, and renewable energy to continue to reduce our Scope 1 and 2 emissions, and from 2019 through 2021 we have offset our calculated Scope 1 and 2 emissions to achieve neutrality.

Receive Green Globes Certification for newly constructed building at U.S. Headquarters. After our headquarters building 1815 was completed, we worked with the Green Building Initiative and were the first building to be certified in the GBI Existing Buildings 2021 pilot program. Building 1815 received three out of four Green Globes.

Report under TCFD Framework by 2023. We are in the process of creating our 2022 Global Responsibility Report, where we will report in alignment with the TCFD framework for the first time.

Complete transition of Field Fleet to hybrid and electric vehicles by 2025. Although we experienced delays due to the COVID-19 pandemic and vehicle availability, we are making progress towards this goal.

In 2022, for the first time, we tied ESG performance to compensation by including three ESG goals in our Annual Incentive Plan. The three goals aimed to increase diversity in our U.S. job candidate pool, reduce single-use plastic, and achieve Green Globes certification for our new 1709 building at our U.S. Headquarters. Throughout the year, our employees worked hard to progress and ultimately achieve all of our goals.

Following the success of 2022, we again set ESG goals tied to compensation in 2023. These new goals are related to:

•

Further increasing diversity in the candidate pool for jobs based in the U.S.

•

Increasing global utilization of our volunteer time program

•

Developing a global greenhouse gas mitigation and reduction plan to continue to reduce our environmental impact

By tying annual ESG targets to compensation, we hope to incentivize all employees and our Executive Team to contribute to meaningful progress and reinforce the importance of these targets.

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2023 Proposals

PROPOSAL 1

Election of Directors

The Board proposes the election of nine directors of our Company to serve until the next annual meeting of stockholders, or thereafter until their successors are duly elected and qualified. If any nominee is unable or declines to serve as director at the time of the Annual Meeting, an event that we do not currently anticipate, proxies will be voted for any nominee designated by the Board to fill the vacancy.

Director Nominees

Names of the nominees and certain biographical information about them are set forth below:

Hervé Hoppenot	CHAIRMAN OF THE BOARD Age: 63	COMMITTEES: • None	DIRECTOR SINCE: 2014
BACKGROUND: Mr. Hoppenot joined Incyte as President and Chief Executive Officer and a Director in January 2014, and was appointed Chairman of the Board in May 2015. Mr. Hoppenot served as the President of Novartis Oncology, Novartis Pharmaceuticals Corporation, the U.S. subsidiary of Novartis AG, a pharmaceutical company, from January 2010 to January 2014. Prior to that, Mr. Hoppenot served in other executive positions at Novartis Pharmaceuticals Corporation, serving from September 2006 to January 2010 as Executive Vice President, Chief Commercial Officer of Novartis Oncology and Head of Global Product Strategy & Scientific Development of Novartis Pharmaceuticals Corporation and from 2003 to September 2006 as Senior Vice President, Head of Global Marketing of Novartis Oncology. Prior to joining Novartis, Mr. Hoppenot served in various increasingly senior roles at Aventis S.A. (formerly Rhône Poulenc S.A.), a pharmaceutical company, including as Vice President Oncology US of Aventis Pharmaceuticals, Inc. from 2000 to 2003 and Vice President US Oncology Operations of Rhone Poulenc Rorer Pharmaceuticals, Inc. from 1998 to 2000. QUALIFICATIONS: The Board has concluded that Hervé Hoppenot should serve on the Board because he has significant leadership and senior management experience from his various executive positions in the healthcare industry, including as the President of Novartis Oncology, Novartis Pharmaceuticals Corporation. His past experiences and his current role as our CEO give him strong knowledge of our strategy, markets, competitors, financials and operations. OTHER PUBLIC COMPANY BOARDS:
Current Cellectis S.A.		Past 5 Years None

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PROPOSAL 1 Election of Directors

Julian C. Baker	LEAD INDEPENDENT DIRECTOR Age: 56	COMMITTEES: • Nominating and Corporate Governance (Chair) • Compensation	DIRECTOR SINCE: 2001
BACKGROUND: Mr. Baker is a Managing Member of Baker Bros. Advisors LP, which he and his brother, Felix Baker, Ph.D., founded in 2000. Baker Bros. Advisors LP is a biotechnology-focused investment advisor to fund partnerships whose investors are primarily endowments and foundations. Mr. Baker’s career as a fund manager began in 1994 when he co-founded a biotechnology investing partnership with the Tisch family. Previously, Mr. Baker was employed from 1988 to 1993 by the private equity investment arm of Credit Suisse First Boston Corporation. QUALIFICATIONS: The Board has concluded that Julian C. Baker should serve on the Board because he is an experienced investor in many life sciences companies. He brings to the Board significant strategic and financial expertise and extensive knowledge of the life sciences and biopharmaceuticals industries as a result of his investments in and service as a director of other publicly and privately held life sciences companies. OTHER PUBLIC COMPANY BOARDS:
Current ACADIA Pharmaceuticals Inc. Prelude Therapeutics Incorporated		Past 5 Years Genomic Health, Inc. (2001-2019) Idera Pharmaceuticals, Inc. (2014-2018)

Jean-Jacques Bienaimé	INDEPENDENT DIRECTOR Age: 69	COMMITTEES: • Compensation (Chair) • Nominating and Corporate Governance	DIRECTOR SINCE: 2015
BACKGROUND: Mr. Bienaimé has served as Chief Executive Officer and a member of the board of directors of BioMarin Pharmaceutical Inc., a biopharmaceutical company, since May 2005. Mr. Bienaimé has also served as Chairman of BioMarin since June 2015. From November 2002 to April 2005, Mr. Bienaimé served as Chairman, Chief Executive Officer and President of Genencor, a biotechnology company focused on industrial bioproducts and targeted cancer biotherapeutics. Prior to joining Genencor, Mr. Bienaimé was Chairman, President and Chief Executive Officer of SangStat Medical Corporation, an immunology focused biotechnology company that was later acquired by Genzyme Corporation. He became President of SangStat in 1998 and Chief Executive Officer in 1999. Prior to joining SangStat, Mr. Bienaimé held various management positions from 1992 to 1998 with Rhône Poulenc Rorer Pharmaceuticals (now known as Sanofi Aventis), including Senior Vice President of Corporate Marketing and Business Development, and Vice President and General Manager of the advanced therapeutic and oncology division. Mr. Bienaimé is a director of the Biotechnology Innovation Organization and the Pharmaceutical Research and Manufacturers of America® (PhRMA). QUALIFICATIONS: The Board has concluded that Jean-Jacques Bienaimé should serve on the Board because he has significant leadership experience in the management of biotechnology organizations, business development, and sales and marketing of both biotechnology and pharmaceutical products. He also brings significant experience as a director of other publicly held life sciences companies. OTHER PUBLIC COMPANY BOARDS:
Current BioMarin Pharmaceutical Inc.		Past 5 Years Vital Therapies, Inc. (2013-2018)

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PROPOSAL 1 Election of Directors

Otis W. Brawley, M.D.	INDEPENDENT DIRECTOR Age: 63	COMMITTEES: • Science and Technology	DIRECTOR SINCE: 2021
BACKGROUND: Dr. Brawley has served as a Bloomberg Distinguished Professor of Oncology and Epidemiology at Johns Hopkins University since January 2019. From April 2007 to December 2018, Dr. Brawley served as the Chief Medical and Scientific Officer of the American Cancer Society. From January 2002 to August 2007, Dr. Brawley was director of the Georgia Cancer Center at Grady Memorial Hospital. From April 2001 to December 2018, Dr. Brawley served as Professor of hematology, oncology, medicine and epidemiology at Emory University. Prior to joining Emory University, Dr. Brawley was an assistant director and senior investigator at the National Cancer Institute and an internist and oncologist at the National Institutes of Health Clinical Center and Bethesda Naval Hospital. QUALIFICATIONS: The Board has concluded that Otis W. Brawley should serve on the Board because he has significant medical and scientific leadership experience. Dr. Brawley’s medical and academic background in oncology and hematology, together with his medical, scientific and public health leadership experience, are expected to assist the Board in its oversight role over our drug discovery and development efforts and to provide the Board with relevant insight into healthcare delivery. In addition, Dr. Brawley has experience serving as a director of other publicly held life sciences companies. OTHER PUBLIC COMPANY BOARDS:
Current Agilent Technologies, Inc. Lyell Immunopharma, Inc. PDS Biotechnology Corporation		Past 5 Years None

Paul J. Clancy	INDEPENDENT DIRECTOR Age: 61	COMMITTEES: • Audit and Finance (Chair) • Compensation	DIRECTOR SINCE: 2015
BACKGROUND: Mr. Clancy has more than 30 years of experience in financial management and strategic business planning, and served as a senior advisor from October 2019 until July 2020 to, and as the Executive Vice President and Chief Financial Officer from July 2017 through October 2019 of, Alexion Pharmaceuticals, Inc., a biopharmaceutical company. Prior to joining Alexion, Mr. Clancy served as Executive Vice President, Finance and Chief Financial Officer of Biogen Inc. (formerly known as Biogen Idec Inc.), a biopharmaceutical company, from August 2007 until June 2017. He also served as Senior Vice President of Finance of Biogen, with responsibilities for leading the treasury, tax, investor relations and business planning groups. Prior to the 2003 merger of Biogen, Inc. and IDEC Pharmaceuticals Corporation to form Biogen, Mr. Clancy was the Vice President of Portfolio Management of Biogen. He joined Biogen in 2001 as Vice President of U.S. Marketing. Before Biogen, Mr. Clancy spent 13 years at PepsiCo Inc., a food and beverage company, serving in a variety of financial, strategy and general management positions. QUALIFICATIONS: The Board has concluded that Paul J. Clancy should serve on the Board because he has significant financial and executive leadership experience at large multi-national biopharmaceutical companies. Mr. Clancy also has experience as a director of a publicly held biotechnology company, and his breadth and depth of financial experience position him well to serve as Chair of the Audit and Finance Committee of the Board. OTHER PUBLIC COMPANY BOARDS:
Current Agios Pharmaceuticals, Inc. Exact Sciences Corporation Xilio Therapeutics, Inc.		Past 5 Years None

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PROPOSAL 1 Election of Directors

Jacqualyn A. Fouse, Ph.D.	INDEPENDENT DIRECTOR Age: 61	COMMITTEES: • Audit and Finance • Nominating and Corporate Governance	DIRECTOR SINCE: 2017
BACKGROUND: Dr. Fouse served as Chief Executive Officer of Agios Pharmaceuticals, Inc., a biopharmaceutical company, from February 2019 until August 2022. She became Chair of the Agios Board of Directors in August 2022 and retired as CEO. Prior to Agios, she served as Executive Chair of Dermavant Sciences, a biopharmaceutical company, from July 2017 to September 2018. From September 2010 until June 2017, Dr. Fouse served in various capacities at Celgene Corporation, a biopharmaceutical company, serving as Strategic Advisor to the Management Executive Committee from April 2017 to June 2017, President and Chief Operating Officer from March 2016 to March 2017, President, Hematology and Oncology from August 2014 to February 2016, Executive Vice President and Chief Financial Officer from February 2012 to July 2014, and Senior Vice President and Chief Financial Officer from September 2010 to February 2012. Prior to joining Celgene, Dr. Fouse served as Chief Financial Officer of Bunge Limited, a global agribusiness and food company, from July 2007 to September 2010. Prior to joining Bunge, Dr. Fouse served as Senior Vice President, Chief Financial Officer and Corporate Strategy at Alcon Laboratories, Inc. since 2006, and as its Senior Vice President and Chief Financial Officer since 2002. Prior to her time with Alcon, she held a variety of senior leadership roles with international companies in Europe, including Swissair and Nestle. QUALIFICATIONS: The Board has concluded that Jacqualyn A. Fouse should serve on the Board because she has significant executive leadership, corporate finance, financial reporting and accounting expertise as a result of her executive roles at Agios and previously at Dermavant Sciences and Celgene, as well as her prior positions with other companies. Additionally, Dr. Fouse is able to provide diverse and valuable corporate governance, management, operational and strategic expertise to the Board through her experience as an executive officer and a public company board member. OTHER PUBLIC COMPANY BOARDS:
Current Agios Pharmaceuticals, Inc.		Past 5 Years Dick’s Sporting Goods, Inc. (2010-2020)

Edmund P. Harrigan, M.D.	INDEPENDENT DIRECTOR Age: 70	COMMITTEES: • Science and Technology (Chair) • Audit and Finance	DIRECTOR SINCE: 2019
BACKGROUND: Dr. Harrigan joined the Board in December 2019. Dr. Harrigan served as Senior Vice President of Worldwide Safety and Regulatory for Pfizer Inc. from 2012 until his retirement in 2015. Dr. Harrigan’s previous executive leadership roles at Pfizer included serving as Senior Vice President, Head of Worldwide Business Development, Senior Vice President, Head of Worldwide Regulatory Affairs and Quality Assurance, and Vice President, Head of Neuroscience and Ophthalmology. Previously, Dr. Harrigan served in senior leadership positions at Karuna Pharmaceuticals, Inc., Sepracor Inc., and Neurogen Corporation. Prior to entering the pharmaceutical industry in 1990, Dr. Harrigan was a practicing neurologist for seven years. QUALIFICATIONS: The Board has concluded that Edmund P. Harrigan should serve on the Board because he has significant executive leadership experience in the pharmaceutical and biotechnology industry, including experience in drug discovery and development, regulatory affairs and business development. Dr. Harrigan also brings substantial medical and scientific experience to the Board. In addition, Dr. Harrigan has significant experience serving as a director of other publicly held life sciences companies. OTHER PUBLIC COMPANY BOARDS:
Current ACADIA Pharmaceuticals, Inc. PhaseBio Pharmaceuticals, Inc.		Past 5 Years Bellicum Pharmaceuticals, Inc. (2018-2019) Karuna Therapeutics, Inc. (2011-2020)

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PROPOSAL 1 Election of Directors

Katherine A. High, M.D.	INDEPENDENT DIRECTOR Age: 71	COMMITTEES: • Science and Technology	DIRECTOR SINCE: 2020
BACKGROUND: Dr. High joined the Board in March 2020. Dr. High served as President, Therapeutics of Asklepios Biopharmaceutical, Inc., a biotechnology and gene therapy company that is a wholly-owned subsidiary of Bayer AG, from January 2021 until December 2022. Dr. High served as President of Spark Therapeutics, Inc., a gene therapy company, from September 2014 until February 2020 and as Head of Research and Development of Spark from September 2017 until February 2020. From September 2014 through September 2017, Dr. High served as Chief Scientific Officer of Spark. Prior to serving as President of Spark, Dr. High provided advice to Spark and subsequently served as an independent consultant to Spark from December 2013 to September 2014. From July 1999 through September 2014, Dr. High was a Professor at the Perelman School of Medicine at the University of Pennsylvania. From March 2003 through September 2014, Dr. High was an Investigator of the Howard Hughes Medical Institute. Dr. High served as the Director of the Center for Cellular and Molecular Therapeutics at Children’s Hospital of Philadelphia from September 2004 to April 2014. Currently Dr. High is a Visiting Professor at Rockefeller University in New York. QUALIFICATIONS: The Board has concluded that Katherine A. High should serve on the Board because she has significant executive, scientific and medical leadership experience, including extensive academic and industry experience in drug discovery and development. Her medical background, together with her experience leading drug discovery and development efforts at Spark Therapeutics, are expected to assist the Board in its oversight role over our drug discovery and development efforts. In addition, Dr. High has experience serving as an executive officer and director of publicly traded life sciences companies. OTHER PUBLIC COMPANY BOARDS:
Current CRISPR Therapeutics AG		Past 5 Years Spark Therapeutics, Inc. (2014-2019)

Susanne Schaffert, Ph.D.	INDEPENDENT DIRECTOR Age: 56	COMMITTEES: • None	DIRECTOR SINCE: 2022
BACKGROUND: Dr. Schaffert joined the Board in October 2022. Dr. Schaffert previously spent 26 years at the pharmaceutical company Novartis AG, where she served in various roles. Most recently, Dr. Schaffert served as President of Novartis Oncology from January 2019 until April 2022. Prior to that role, Dr. Schaffert served from January 2018 to February 2019 as President and Chair of Accelerated Advanced Applications and from December 2012 to January 2018 as General Manager Region Europe, Novartis Oncology. From March 2010 to December 2012, Dr. Schaffert was Global Head of Investor Relations, and before that, Dr. Schaffert served as Global Franchise Head for Immunology and Transplantation. Dr. Schaffert first joined Novartis Germany in 1995 and held a series of positions in sales and marketing with increasing responsibilities in national, regional and global functions. QUALIFICATIONS: The Board has concluded that Susanne Schaffert should serve on the Board because she has significant executive leadership experience, across clinical development, marketing and sales, finance and commercialization in the global pharmaceutical and biotechnology industries, with a focus on oncology, immuno-oncology and cell therapy. Her background, together with her experience formerly serving as President of Novartis Oncology, are expected to assist the Board in its oversight role over our clinical development and global commercialization efforts. OTHER PUBLIC COMPANY BOARDS:
Current None		Past 5 Years Rubius Therapeutics, Inc. (2022-2023)

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Board Committees

The Board has appointed an Audit and Finance Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and a Science and Technology Committee. The Board has determined that each director who serves on these committees is “independent,” as that term is defined by applicable listing standards of The Nasdaq Stock Market and Securities and Exchange Commission rules. The Board has approved a charter for each of these committees. A current copy of each committee’s charter can be found on our website at http://www.incyte.com under the “Corporate Governance” heading in the “For Investors” portion of our website. The Board has also appointed a Non-Management Equity Award Committee.

The Board will update committee composition as appropriate after the Annual Meeting.

Audit and Finance Committee			COMMITTEE MEMBERS
The Audit and Finance Committee’s responsibilities include: ➤ assisting the Board in fulfilling its oversight responsibilities relating to the Company’s financial statements, systems of internal control over financial reporting, auditing, accounting and financial reporting processes, compliance with legal and regulatory requirements, financing and tax strategies, capital allocation, capital structure, and enterprise risk assessment and management practices; ➤ appointing, compensating, evaluating and, when appropriate, replacing our independent registered public accounting firm; ➤ reviewing and pre-approving audit and permissible non-audit services; ➤ reviewing the scope of the annual audit; ➤ monitoring the independent registered public accounting firm’s relationship with the Company; ➤ meeting with the independent registered public accounting firm and management to discuss and review our financial statements, internal control over financial reporting, and auditing, accounting and financial reporting processes; ➤ reviewing the results of management’s efforts to monitor compliance with the Company’s programs and policies designed to promote adherence to applicable laws and regulations; ➤ overseeing the management of the Company’s enterprise risk assessment and management practices, including with respect to financial, operating, cybersecurity and other information technology, including the periodic review of management’s efforts to identify and mitigate such risks; ➤ overseeing our internal audit function; and ➤ reviewing matters related to the Company’s investment policy, capital allocation strategies, capital structure and tax structure and strategies. The Board has determined that Mr. Clancy and Dr. Fouse are each qualified as an Audit Committee Financial Expert under the definition outlined by the Securities and Exchange Commission. No member of our Audit and Finance Committee sits on more than three public company audit committees, including ours.			Paul J. Clancy (Chair) Jacqualyn A. Fouse Edmund P. Harrigan Met 9 times in 2022

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Board Committees

Compensation Committee			COMMITTEE MEMBERS
The Compensation Committee’s responsibilities include: ➤ assisting the Board in meeting its responsibilities with regard to oversight and determination of executive compensation; ➤ reviewing and making recommendations with respect to major compensation plans, policies and programs of the Company; ➤ developing and monitoring compensation arrangements for our executive officers; ➤ determining compensation for our CEO and other executive officers; ➤ determining stock-based compensation awards for our executive officers; ➤ administering performance-based compensation plans such as our Amended and Restated 2010 Stock Incentive Plan (the “2010 Stock Incentive Plan”); ➤ reviewing and recommending directors’ compensation to the full Board; and ➤ possessing sole authority to select, retain, terminate and approve the fees and other retention terms of consultants as it deems appropriate to perform its duties.			Jean Jacques Bienaimé (Chair) Julian C. Baker Paul J. Clancy Met 4 times in 2022

Nominating and Corporate Governance Committee			COMMITTEE MEMBERS
The Nominating and Corporate Governance Committee’s responsibilities include: ➤ identifying qualified individuals to become members of the Board; ➤ determining the composition of the Board and its committees; ➤ monitoring a process to assess Board effectiveness; ➤ recommending nominees to fill vacancies on the Board; ➤ reviewing and making recommendations to the Board with respect to candidates for director proposed by stockholders; ➤ reviewing the composition, functioning and effectiveness of the Board and its committees; ➤ developing and recommending to the Board codes of conduct applicable to officers, directors and employees and charters for the various committees of the Board; and ➤ reviewing and making recommendations to the Board regarding the succession plan relating to our CEO and other executive officers.			Julian C. Baker (Chair) Jean Jacques Bienaimé Jacqualyn A. Fouse Met 1 time in 2022

Science and Technology Committee			COMMITTEE MEMBERS
The Science and Technology Committee’s responsibilities include: ➤ assisting the Board in its general oversight of the Company’s research and development programs and progress in achieving research and development goals and objectives; ➤ providing strategic advice to the Board and management regarding emerging science and technology issues and trends; ➤ reviewing and assessing the Company’s approaches to acquiring and maintaining technology positions or otherwise investing in research and development programs; and ➤ assisting the Board with its oversight responsibility for enterprise risk management in areas affecting the Company’s research and development activities.			Edmund P. Harrigan (Chair) Otis W. Brawley Katherine A. High Met 2 times in 2022

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Board Committees

				Committee Membership
Name and Primary Occupation	Director Since	Age	Independent	Compensation	Audit and Finance	Nominating and Corporate Governance	Science and Technology
Hervé Hoppenot—Chairman of the Board President and Chief Executive Officer Incyte Corporation	2014	63
Julian C. Baker—Lead Independent Director Managing Partner Baker Brothers Investments	2001	56	✓
Jean-Jacques Bienaimé Chief Executive Officer BioMarin Pharmaceutical Inc.	2015	69	✓
Otis W. Brawley, M.D. Bloomberg Distinguished Professor of Oncology and Epidemiology Johns Hopkins University	2021	63	✓
Paul J. Clancy Former Executive Vice President and Chief Financial Officer, Alexion Pharmaceuticals, Inc.	2015	61	✓
Jacqualyn A. Fouse, Ph.D. Former Chief Executive Officer Agios Pharmaceuticals, Inc.	2017	61	✓
Edmund P. Harrigan, M.D. Former Senior Vice President of Worldwide Safety and Regulatory, Pfizer Inc.	2019	70	✓
Katherine A. High, M.D. Former President, Therapeutics Asklepios Biopharmaceutical, Inc.	2020	71	✓
Susanne Schaffert, Ph.D. Former President, Novartis Oncology	2022	56	✓

Committee Chair

Financial Expert

Member

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Compensation of Directors

Our director compensation program is designed to attract and retain highly qualified directors by ensuring that our director compensation is in line with compensation offered by our peer companies that compete with us for director talent. Compensation reflects the time, effort, expertise and accountability required of active board membership. Directors who are employees of the Company, namely Mr. Hoppenot, do not receive any fees for their service on the Board or any committee. The Compensation Committee, with the assistance of its independent compensation consultant, periodically reviews the compensation for our non-employee directors in relation to the peer group used for compensation purposes (as described below under “Compensation Discussion and Analysis”).

In 2021, we sought approval for, and our stockholders approved, changes to our Amended and Restated 2010 Stock Incentive Plan (the “2010 Stock Incentive Plan”), that enabled the Board to set the total grant date target value of equity awards to our non-employee directors up to a maximum of $500,000, which was the total grant date target value for equity awards made to non-employee directors in 2020. In addition, the mix of equity awards was changed from 75% stock options and 25% restricted stock unit (RSU) awards to 60% stock options and 40% RSU awards. The Compensation Committee, with the assistance of its independent compensation consultant, most recently reviewed the compensation of our non-employee directors in November 2022 and determined not to recommend any change to the total grant date target value of non-employee director equity awards that was set by the Board at $400,000 for 2021, 2022 and 2023.

The annual retainers for Board service, committee membership and chair service are set forth below.

Role	Cash Retainer ($)(1)		Total Equity Awards ($)(2)
Lead Independent Director		100,000		400,000
Non-Employee Director		60,000		400,000

Role	Cash Retainer ($)(1)
Chair of Audit and Finance Committee		25,000
Members of Audit and Finance Committee		12,500
Chair of Compensation Committee		25,000
Members of Compensation Committee		10,000
Chair of Nominating and Corporate Governance Committee		18,000
Members of Nominating and Corporate Governance Committee		9,000
Chair of Science and Technology Committee		25,000
Members of Science and Technology Committee		10,000

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Compensation of Directors

(1)

Annual cash retainers are payable quarterly. Non-employee directors may elect to receive their retainers and committee fees in the form of restricted shares that vest immediately when the associated quarterly retainer amount is paid.

(2)

Equity awards are 60% stock options and 40% RSU awards, determined in the same manner as with awards to our executive officers, as described in “Compensation Discussion and Analysis.” The Board has determined that for 2022 and 2023, total grant date target value for equity awards will be $400,000 for all non-employee directors. The exercise price of the options will be equal to the fair market value on the date of grant and have a term of 10 years. Each award will vest in full on the first anniversary of the date of the grant or, if earlier, the date of the next annual meeting of stockholders or upon a change in control.

Cash and equity awards are prorated for such portion of the year that the director serves on the Board. All directors are reimbursed for their travel and out-of-pocket expenses in accordance with our travel policy for each in-person Board or committee meeting that they attend.

2022 Director Compensation Table

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)(1)(3)		Option Awards ($)(2)(3)		Total ($)
Julian C. Baker		—		274,971		220,497		495,468
Jean-Jacques Bienaimé		117,250		146,971		220,497		484,718
Otis W. Brawley		77,500		146,971		220,497		444,968
Paul J. Clancy		—		241,971		220,497		462,468
Wendy L. Dixon (4)		—		33,262		—		33,262
Jacqualyn A. Fouse		—		228,471		220,497		448,968
Edmund P. Harrigan		—		230,721		220,497		451,218
Katherine A. High		87,500		146,971		220,497		454,968
Susanne Schaffert		15,000		111,849		167,798		294,647

(1)

Amounts listed in this column represents the sum of the aggregate grant date value of immediately vested restricted share awards issued quarterly at the election of the director in lieu of his or her annual retainer and committee fees and the aggregate grant date fair value of RSU awards granted upon re-election at the 2022 Annual Meeting or, in the case of Dr. Schaffert, upon her election to the Board, determined in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (ASC 718) for financial reporting purposes. See Note 12 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of our assumptions in determining the ASC 718 values of our stock awards.

The following table provides the grant date value of restricted share awards issued in lieu of cash retainer and committee fees and the grant date fair value of RSUs shown in the above table:

Name	Value of Restricted Share Awards ($)		Grant Date Fair Value of RSU Awards ($)
Julian C. Baker		128,000		146,971
Jean-Jacques Bienaimé		—		146,971
Otis W. Brawley		—		146,971
Paul J. Clancy		95,000		146,971
Wendy L. Dixon		33,262		—
Jacqualyn A. Fouse		81,500		146,971
Edmund P. Harrigan		83,750		146,971
Katherine A. High		—		146,971
Susanne Schaffert		—		111,849

(2)

Amounts listed in this column represents the aggregate grant date fair value of option awards granted upon re-election at the 2022 Annual Meeting or, in the case of Dr. Schaffert, upon her election to the Board, determined in accordance with the ASC 718 for financial reporting purposes. See Note 12 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of our assumptions in determining the ASC 718 values of our option awards.

(3)

The following table provides the number of shares of common stock subject to outstanding unvested RSU awards and stock options held at December 31, 2022 for each director who was then serving on the Board:

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Compensation of Directors

Name	Number of Unvested RSU Awards		Number of Shares Underlying Unexercised Option
Julian C. Baker		2,114		135,120
Jean-Jacques Bienaimé		2,114		130,120
Otis W. Brawley		2,114		15,034
Paul J. Clancy		2,114		130,120
Wendy L. Dixon		—		90,996
Jacqualyn A. Fouse		2,114		88,870
Edmund P. Harrigan		2,114		32,008
Katherine A. High		2,114		28,933
Susanne Schaffert		1,625		6,751

(4)

Dr. Dixon retired from the Board on June 15, 2022.

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Corporate Governance

	What We Do
	✓ Majority voting for directors in uncontested elections			✓ Audit and Finance Committee receives semiannual updates by our Chief Compliance Officer
	✓ Strong and active Lead Independent Director, representing one of our largest stockholders			✓ Board and the committees may seek advice from outside advisors
	✓ Audit and Finance Committee, Nominating and Corporate Governance Committee and Compensation Committee comprised solely of independent directors			✓ Pre-clearance by our General Counsel required for trading in our stock by any director, and all executive trading must be through a pre-cleared trading plan
	✓ Audit and Finance Committee regularly meets with Ernst & Young LLP, our independent registered public accounting firm, as well as our corporate audit services team—without members of executive management present			✓ Maintain robust Code of Business Conduct and Ethics, Senior Financial Officers’ Code of Ethics and Board of Directors Code of Conduct and Ethics requirements
	✓ An independent compensation consultant is engaged by and reports directly to our Compensation Committee			✓ Board members have complete access to management and employees in their discretion
	✓ Annual election of directors			✓ High Board and committee attendance
	✓ Review and approve corporate strategic plan, including the budget, at least annually			✓ Robust commitment to corporate, environmental and social responsibility
	✓ Limits on outside board and audit committee service			✓ Extensive ongoing stockholder outreach, often involving Lead Independent Director
	✓ Proxy access bylaw (3% ownership, 3 years, nominees up to 20% of the Board)			✓ Audit and Finance Committee is updated by our cybersecurity team at least twice per year

	What We Don’t Do
	✗ No staggered or classified Board			✗ No hedging or speculative trading in our stock by directors, executives or other employees
	✗ No plurality voting in uncontested Board elections			✗ Board members may not be “overboarded”

Majority Voting Policy

Our Bylaws include a majority voting standard for the election of directors. In order to receive a majority of the votes cast, the number of shares voted “FOR” must exceed the number of votes “AGAINST”; abstentions and broker non-votes do not count as votes cast. Our Bylaws provide that, in an uncontested election, director nominees must receive a majority of the votes cast to be elected to the Board. Our Corporate Governance Guidelines state that if a nominee for director in an uncontested election does not receive a majority of the votes cast, the director should submit a resignation for consideration by the Board. The Nominating and Corporate Governance Committee will evaluate and make a recommendation to the Board with respect to the proffered resignation. The Board must take action on the recommendation within 90 days following certification of the stockholder vote. The director whose resignation is under consideration cannot participate in any decision regarding his or her resignation. The Nominating and Corporate Governance Committee and the Board may consider any factors they deem relevant in deciding whether to accept a director’s resignation.

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Corporate Governance

Board Leadership Structure

Our current leadership structure and governing documents permit the roles of Chairman and CEO to be filled by the same or different individuals. Where the Chairman and CEO roles are filled by the same individual, our Corporate Governance Guidelines require the independent directors on our Board to appoint a Lead Independent Director.

The Board values the flexibility to select, from time to time, a leadership structure that it believes is most able to serve our Company’s and stockholders’ best interests based on the qualifications of individuals available and circumstances existing at the time. As such, the Board periodically evaluates whether combining or separating the roles of Chairman and CEO is in the best interests of our Company and our stockholders.

Currently the Board believes it is in the best interests of our stockholders to have Hervé Hoppenot, our President and CEO, serve as Chairman, coupled with Julian C. Baker—a managing member of the general partner of one of our largest stockholders (Baker Bros. Advisors LP and affiliated entities (the “Baker Funds”) who collectively hold 16.3% of our common stock as of April 18, 2023)—serving as our Lead Independent Director. The Board reviews its leadership structure on an ongoing basis and retains the authority to modify this structure as it deems appropriate.

Focus on Independence. The Board maintains a strong commitment to ensuring Board independence so that it is able to maintain effective oversight of management. The Board’s commitment to independence includes:

✓

Annual appointment of a strong Lead Independent Director, who also represents one of our largest stockholders, the Baker Funds, thereby ensuring strong representation of stockholder interests

✓

Robust duties of the Lead Independent Director, which include:

•

presiding at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors

•

serving as liaison between the Chairman/CEO and the other independent directors

•

approving information sent to the Board

•

approving meeting agendas for the Board

•

approving meeting schedules to assure that there is sufficient time for discussion of all agenda items

•

authority to call meetings and executive sessions of the independent directors

•

being available for consultation with stockholders, when appropriate.

✓

Review, at least annually, of the Company’s strategic plan and the following year’s capital and operating budgets

✓

Annual election of all directors, ensuring accountability to stockholders

✓

Regular executive sessions of the independent, non-management directors—without Mr. Hoppenot—to review Company performance, CEO performance, management effectiveness, proposed programs and transactions and the Board meeting agenda items

✓

Requirement that only independent directors serve on the Audit and Finance Committee, the Compensation Committee and the Nominating and Corporate Governance Committee

✓

Requirement that a majority of the Board be comprised of independent directors, with 89% of the current Board being independent

✓

Corporate Governance Guidelines providing that the Board may have access to Company management and employees and its own advisors, at the Board’s discretion.

Flexibility of the Leadership Structure. The Board is committed to high standards of corporate governance. The Board values the flexibility to select, from time to time, a leadership structure that is most able to serve the Company’s and stockholders’ best interests based on the qualifications of individuals available and circumstances existing at the time. As such, the Board periodically evaluates whether combining or separating the roles of Chairman and CEO is in the best interest of the Company and of our stockholders.

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Corporate Governance

Board Role in Risk Oversight

Our Board is responsible for overseeing the overall risk management process at the Company directly and through its committees. The responsibility for managing risk rests with executive management while the committees of the Board and the Board as a whole participate in the oversight process. The Board’s risk oversight process builds upon management’s risk assessment and mitigation processes, which include reviews of long term strategic and operational planning, executive evaluation, development and succession planning, regulatory and legal compliance, financial reporting and internal controls, and cybersecurity risks. The Board and its committees consider strategic and operational risks and opportunities and regularly receive reports from executive management regarding specific aspects of risk management, including risks associated with our strategic plan, our capital structure, our research and development activities, our commercial activities, drug pricing and reimbursement, our manufacturing and supply activities, cybersecurity, our ESG program, and our human capital management.

The Audit and Finance Committee has primary responsibility for overseeing our financial processes, compliance with legal and regulatory requirements, and enterprise risk assessment and management practices. The Audit and Finance Committee meets throughout the year and receives regular reports from executive management with respect to, and reviews such risks associated with, our financial and accounting systems, accounting policies, investment strategies, global tax matters, regulatory and ethics compliance, ESG strategy and reporting, and information systems and technology, including cybersecurity risks and readiness. We have a Chief Compliance Officer, who regularly provides the Audit and Finance Committee with information and briefings about current and emerging compliance risks and regulatory, enforcement and other external factors that may affect our business operations, risk management or strategy. The Audit and Finance Committee also receives information and briefings from the head of our internal audit team, as well as representatives of our independent registered public accounting firm. The Audit and Finance Committee meets regularly with our independent registered public accounting firm and periodically with our Chief Compliance Officer and the head of our internal audit team in executive session without the presence of other members of management.

The Compensation Committee evaluates our compensation policies and practices to help ensure that these policies and practices (1) do not incentivize employees to take unnecessary or excessive risks that could have a material adverse effect on our Company and (2) provide appropriate incentives for meeting both short-term and long-term objectives and increasing stockholder value over time. The Compensation Committee also considers risks relating to our human capital management. The Nominating and Corporate Governance Committee reviews our risks associated with governance matters and non-compensation related human resources matters. The Science and Technology Committee reviews and evaluates our risks associated with our research and discovery programs and strategies.

Each Board committee reports regularly to the full Board on its activities. In addition, the Board participates in regular discussions with our executive management on many core subjects, including strategy, operations, finance, drug pricing and reimbursement, and legal and public policy matters, in which risk oversight is an inherent element. The Board believes the leadership structure described above under “Board Leadership Structure” facilitates the Board’s oversight of our risk management because it allows the Board, with leadership from our Lead Independent Director and working through its committees, which are all composed of independent directors, to proactively participate in the oversight of our management’s actions.

Director Independence

In 2022, our Board determined that each individual who served as a member of the Board in 2022 except for Mr. Hoppenot, was an “independent director” within the meaning of Rule 5605 of The Nasdaq Stock Market.

Mr. Hoppenot is not considered independent as he is currently employed as our CEO. For all other directors, the Board considers their relationship and transactions with our Company as directors and security holders of our Company.

All of the nominees are current members of the Board.

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Corporate Governance

Board Evaluation and Refreshment

At least annually, the Board assesses its composition, taking into consideration: the knowledge, experience and diverse perspectives of its directors; each individual director’s performance and contributions to the Board and its committees; the other time commitments of directors; and other factors the Board deems appropriate, such as independence, absence of conflicts and lack of any reputational risks. The Board weighs these factors with Incyte’s priorities and needs. Our directors serve one-year terms, and all continuing directors are subject to our stockholders’ votes every year.

We believe our Board represents a diverse group of individuals that bring various skills and experience. Our Board’s continuous efforts to refresh itself have led to a complementary mix of new, mid-term and seasoned directors. We believe this group of directors collectively has the skills to support Incyte in the achievement of our long-term goals.

Matrix of Board Nominees

Expertise

Hoppenot

Baker

Bienaimé

Brawley

Clancy

Fouse

Harrigan

High

Schaffert

Biopharma Industry

✓

Operational Leadership

✓

International

✓

Drug Discovery, Development & Regulatory

✓

Commercial

✓

Financial

✓

Gender

Male

✓

Female

✓

Additional Information

PhD/MD

✓

Attendance

100%

89%

100%

94%

93%

100%

Independence

✓

(1)

(2)

One member identifies as LGBTQ+

We believe having a diverse group of directors with different experiences and skills as well as broad representation benefits the interests of all Incyte stakeholders. Three of our nine Board nominees are women, representing 33% of our Board of Directors. This compares well with the 2022 average among S&P 500 constituents, in which 32% of all Board seats are currently taken by women. Three (33%) of our directors were born in Europe, one self-identifies as an underrepresented minority and one self-identifies as LGBTQ+.

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Corporate Governance

Overboarding Policy

The Board of Directors recognizes that in order to be effective, each director must be fully engaged. Our Overboarding Policy states that no new director who is a sitting CEO of another public company shall sit on more than one public company board in addition to his or her own board and no new outside director who is not a sitting CEO of another public company may sit on more than four public company boards in total.

In addition, current directors who sit on less than the maximum number of public company boards may not exceed the maximum amount.

All of our Board nominees are currently compliant with this policy.

	Hoppenot2			Baker			Bienaimé2			Brawley			Clancy			Fouse			Harrigan			High			Schaffert
	2			3			2			4			4			2			3			2			1

(1)

Total board commitments includes Incyte

(2)

Sitting CEO

Further, the level of attendance of our directors at Board meetings continues to be high. The average attendance for 2022 is 96%, with six of the nine directors who are proposed for election in 2023 attending 100% of Board and Committee meetings last year.

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Corporate Governance

Director Nominations

The Board nominates directors for election at each annual meeting of stockholders and elects new directors to fill vacancies when they arise. The Board has an objective, set forth in our Corporate Governance Guidelines, that its membership be composed of experienced and dedicated individuals with diversity of backgrounds, perspectives and skills. The Nominating and Corporate Governance Committee has the responsibility to identify, evaluate, recruit and recommend qualified candidates to the Board for nomination or election.

The Nominating and Corporate Governance Committee seeks candidates who have substantive knowledge of our business and industry, diverse experiences, proven leadership, sound judgment and integrity and who can act on behalf of all stockholders. In addition, directors need to be able to foster a respectful environment in which they listen to one another and can hold constructive discussions. The Nominating and Corporate Governance Committee believes that nominees for director should have operational and leadership experience as well as drug discovery, clinical development, regulatory, commercial and/or financial experience that may be useful to the Company and the Board. Additionally, prospective directors must demonstrate high personal and professional ethics and the willingness and ability to devote sufficient time to effectively carry out their duties as directors. The Board and the Nominating and Corporate Governance Committee also consider diversity of backgrounds and experiences and other forms of diversity when selecting nominees—to that end, we are proud to have 33% gender diversity among the nominees for election to our Board, in addition to the diverse set of skills and experience the Board collectively represents.

The Nominating and Corporate Governance Committee believes it appropriate for at least one, and, preferably, multiple, members of the Board to meet the criteria for an “audit committee financial expert” as defined by Securities and Exchange Commission rules, and our Corporate Governance Guidelines require that a majority of the members of the Board meet the definition of “independent director” under the rules of The Nasdaq Stock Market. The Nominating and Corporate Governance Committee believes it is appropriate for certain key members of our management—currently, our CEO—to participate as members of the Board.

Prior to each annual meeting of stockholders, the Nominating and Corporate Governance Committee identifies nominees first by evaluating the current directors whose term will expire at the annual meeting and who are willing to continue in service. These candidates are evaluated based on the criteria described above, including as demonstrated by the candidate’s prior service as a director, and the needs of the Board with respect to the particular talents and experience of its directors. In the event that a director does not wish to continue in service, the Nominating and Corporate Governance Committee determines not to re-nominate the director, or if a vacancy is created on the Board as a result of a resignation, an increase in the size of the Board or other event, then the Committee will consider various candidates for Board membership, including those suggested by the Committee members, by other Board members, by any search firm engaged by the Committee and by stockholders. The Committee may only recommend, and the Board may only nominate, candidates for director who agree to tender, promptly following their election or re-election as a director, irrevocable resignations that would be effective if the director fails to receive a sufficient number of votes for re-election at the next annual meeting of stockholders at which he or she faces re-election and if the Board accepts the resignation. The Committee recommended all of the nominees for election included in this Proxy Statement. All of the nominees are current members of the Board.

A stockholder who wishes to suggest a prospective nominee for the Board should notify the Secretary of the Company or any member of the Nominating and Corporate Governance Committee in writing with any supporting material the stockholder considers appropriate. In addition, our Bylaws contain provisions that address the process by which a stockholder may nominate an individual to stand for election to the Board at our annual meeting of stockholders. Our Bylaws permit stockholders to nominate individuals for election to the Board (i) for inclusion in our proxy materials and consideration at an Annual Meeting of Stockholders pursuant to our recently adopted proxy access bylaw and (ii) for consideration at an Annual Meeting of Stockholders without being included in our proxy materials. In order to nominate a candidate for director, a stockholder must give timely notice in writing to the Secretary of the Company and otherwise comply with the provisions of our Bylaws.

Our proxy access bylaw permits an eligible stockholder, or group of up to 20 eligible stockholders, owning continuously for at least three years shares of our common stock representing an aggregate of at least 3% of our outstanding shares, to nominate and include in our proxy materials director nominees constituting up to the greater of two individuals or 20% of the Board, provided that the stockholder(s) and nominee(s) satisfy the requirements

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Corporate Governance

specified in the Bylaws (“Proxy Access”). To nominate a director pursuant to Proxy Access, all of the procedures, information requirements, qualifications and conditions set forth in our Bylaws must be complied with. A fully compliant nomination notice must be received by us no earlier than 150 days and no later than 120 days before the anniversary of the date that we issued our proxy statement for the prior year’s annual meeting of stockholders. However, in the event that the annual meeting is called for a date that is more than 30 days before or more than 60 days after the first anniversary date of the preceding year’s annual meeting of stockholders, the nomination notice, to be timely, must be so received by the Secretary of the Company not later than the close of business on the later of (1) the 180th day prior to the date of the meeting and (2) the 10th day following the first public announcement or disclosure of the meeting date.

For a nomination of an individual for election to the Board without being included in our proxy materials, our Bylaws provide that, to be timely, our Secretary must have received the stockholder’s notice not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting of stockholders. However, in the event that no annual meeting was held in the preceding year or the annual meeting is called for a date that is more than 30 days before or more than 60 days after the first anniversary date of the preceding year’s annual meeting of stockholders, notice by the stockholder to be timely must be so received by the Secretary of the Company not later than the close of business on the later of (1) the 90th day prior to the date of the meeting and (2) the 10th day following the first public announcement or disclosure of the meeting date. Information required by the Bylaws to be in the notice include the name and contact information for the candidate and the person making the nomination and other information about the nominee that must be disclosed in proxy solicitations under Section 14 of the Securities Exchange Act of 1934 and the related rules and regulations under that Section. Any notice of director nomination submitted to us other than through Proxy Access must include the additional information required by Rule 14a-19(b) under the Securities Exchange Act of 1934.

Stockholder nominations must be made in accordance with the procedures outlined in, and include the information required by, our Bylaws and must be addressed to:

Secretary
Incyte Corporation
1801 Augustine Cut-Off
Wilmington, DE 19803

You can obtain a copy of the full text of the Bylaw provisions by writing to the Company’s Secretary at the above address.

Board Meetings

The Board held four regularly scheduled meetings during 2022. All but one of the directors attended all four regularly scheduled meetings held by the Board. Overall, each director attended at least 89% of the meetings held by the Board and the committees on which he or she served during 2022.

The independent directors regularly meet in executive sessions without the participation of our CEO or other members of management.

We do not have a policy that requires the attendance of directors at the Annual Meeting.

Corporate Governance Guidelines

The Board is committed to sound and effective corporate governance practices. Accordingly, the Board has adopted Corporate Governance Guidelines, which are intended to describe the governance principles and procedures by which the Board functions. The guidelines are subject to periodic review and update by the Nominating and Corporate Governance Committee and the Board, and were most recently amended in February 2022. These Guidelines can be found on our website at http://www.incyte.com under the “Corporate Governance” heading in the “For Investors” portion of our website.

The Corporate Governance Guidelines provide, among other things, that:

•

a majority of the directors must be independent;

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•

if the Chairman of the Board is not an independent director, the independent directors will appoint a Lead Independent Director, whose duties are described in detail above under “Corporate Governance—Board Leadership Structure” on page 33;

•

directors should offer to resign from the Board if they experience a change in their principal occupation;

•

directors should submit their resignations from the Board if they do not receive the votes of a majority of the votes cast in an uncontested election;

•

the Audit and Finance, Compensation, and Nominating and Corporate Governance Committees must consist solely of independent directors;

•

the Board and its committees may seek advice from outside advisors as appropriate;

•

the independent directors regularly meet in executive sessions without the presence of the non-independent directors or members of our management; and

•

the Nominating and Corporate Governance Committee periodically reviews the composition, functioning, skills, diversity, tenure and effectiveness of the Board and its committees, and oversees the self-assessment of the Board and its committees.

Leadership Succession Planning

Our executive management team assesses its needs for succession planning at least annually. Incyte maintains a flat organizational structure, and hence Mr. Hoppenot has full exposure to the leaders of each function as well as key individuals within those functions; others in the executive management team are also in a position to provide additional insight and context. Should a need arise for succession planning in the executive management team, both internal and external candidates are considered on merit and on Incyte’s current and future goals. Regular succession planning updates are provided to the Nominating and Corporate Governance Committee, which is chaired by our Lead Independent Director, and reported to the full Board by the Nominating and Corporate Governance Committee chair.

Communications with the Board

If you wish to communicate with the Board, you may send your communication in writing to:

Secretary
Incyte Corporation
1801 Augustine Cut-Off
Wilmington, DE 19803

You must include your name and address in the written communication and indicate whether you are a stockholder of the Company.

The Secretary will review any communications received from a stockholder and all material communications from stockholders will be forwarded to the appropriate director or directors or Committee of the Board based on the subject matter.

Certain Relationships and Related Transactions

Our policy is that all employees, officers and directors must avoid any activity that is or has the appearance of conflicting with the interests of the Company. This policy is included in our Code of Business Conduct, Ethics and Board Code of Conduct and Ethics. We conduct a review of all related party transactions for potential conflict of interest situations on an ongoing basis and all such transactions must be approved by the Audit and Finance Committee or another independent body of the Board.

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PROPOSAL 2

Advisory Vote to Approve Executive Compensation

This Proposal 2, commonly known as a ‘say-on-pay’ proposal, provides our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission.

As described in detail under the heading “Executive Compensation—Compensation Discussion and Analysis,” our executive compensation programs are designed to attract and retain our named executive officers, who are critical to our success. Under these programs, our named executive officers are rewarded for the achievement of annual and long-term corporate objectives, and the creation of increased stockholder value. Please read the Compensation Discussion and Analysis for additional details about our executive compensation programs, including information about the 2022 compensation of our named executive officers.

Each year since 2011, we have sought, and received, approval for our executive compensation program. In addition, in 2011, and again in 2017, we sought, and received, approval to hold a ‘say-on-pay’ vote each year. Accordingly, we are again asking our stockholders to indicate their support for our named executive officer compensation as described in this Proxy Statement. Proposal 2 gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is advisory, which means that the vote on executive compensation is not binding on the Company, our Board or the Compensation Committee of the Board. This vote is not intended to address any specific item of compensation, but rather the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission. Accordingly, we again will ask our stockholders to vote for the following resolution at the annual meeting:

“RESOLVED, that the Company’s stockholders approve, on a non-binding, advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2023 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure.”

[MISSING IMAGE: txt_executivecomp-4c.jpg]

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2022 Financial Performance

Other hematology and oncology revenues grew 14% to reach $209 million with the continued uptake of Pemazyre® (pemigatinib) for cholangiocarcinoma in the U.S., Europe and Japan and the ongoing launch of Minjuvi for DLBCL, which is now in 4 key markets and where we continue to seek reimbursement in additional countries.

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Executive Compensation

NM = not meaningful; NA = not available

(1)

Monjuvi revenues recognized by MorphoSys and included in our collaboration loss sharing line item on our consolidated statement of operations for the year ended December 31, 2022.

(2)

Totals may not add due to rounding.

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2022 and YTD Regulatory and Clinical Achievements

Throughout 2022 and year-to-date, we achieved numerous important milestones. These are summarized in the graphic below and described in more detail thereafter.

MLN= myeloid/lymphoid neoplasms; GVHD = graft-versus-host disease; AA= alopecia areata; NSCLC = non-small cell lung cancer; MCC = Merkel cell carcinoma; ASH= American Society of Hematology; HS= hidradenitis suppurativa; LP= lichen planus; LS= lichen sclerosus

(1)

Retifanlimab licensed from MacroGenics

Myeloproliferative Neoplasms and Graft-versus-Host Disease (MPNs and GVHD)

We and our collaborative partner Syndax Pharmaceuticals are developing axatilimab, an anti-CSF-1R monoclonal antibody, as a therapy for patients with chronic GVHD as well as in additional immune-mediated diseases where CSF-1R-dependent monocytes and macrophages are believed to contribute to organ fibrosis. AGAVE-201, a global pivotal trial evaluating axatilimab monotherapy in patients with chronic GVHD in the third line setting, is ongoing. Additional trials of axatilimab are planned in patients with chronic GVHD, including a Phase II trial in combination with

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ruxolitinib. In 2022, Syndax announced that axatilimab was granted fast-track designation by the FDA for the treatment of patients with chronic GVHD after failure of two or more lines of systemic therapy.

Dermatology / Inflammation and AutoImmunity (IAI)

The approval of Opzelura in vitiligo was based on two randomized, double-blind, vehicle-controlled Phase III studies (TRuE-V1 and TRuE-V2) evaluating the safety and efficacy of Opzelura in adolescents and adults with nonsegmental vitiligo. Treatment with 1.5% ruxolitinib cream twice daily (BID) resulted in greater improvement versus vehicle for the primary and all key secondary endpoints in both the TRuE-V1 and TRuE-V2 studies. Results, which were consistent across both studies, showed that 29.9% of patients applying ruxolitinib cream achieved >75% improvement from baseline in the facial Vitiligo Area Scoring Index (F-VASI75) at Week 24, the primary endpoint. At Week 52, approximately 50% of patients achieved F-VASI75. Furthermore, 104-week data were presented at the American Academy of Dermatology (AAD) Annual Meeting 2023, 2023 which showed the long-term efficacy and safety data for nonsegmental vitiligo patients treated with Opzelura. The most common (>1%) treatment-emergent adverse reactions in patients treated with OPZELURA were application site acne, application site pruritus, nasopharyngitis, headache, urinary tract infection, application site erythema and pyrexia.

As we work to maximize the opportunity for the dermatology franchise, we have established a broad clinical development program within dermatology that includes multiple new indications for ruxolitinib cream, as well as new products. Ruxolitinib cream is being evaluated in pediatric atopic dermatitis and in 2022, additional Phase II trials were initiated in lichen sclerosus, lichen planus and hidradenitis suppurativa (HS). Two Phase III trials in prurigo nodularis, an intensely pruritic, chronic inflammatory skin disease, were also recently initiated. There is significant potential with each of these indications given the current limited treatment options, or in some cases, lack of any FDA-approved therapies. In late 2022 and early 2023, we received four issued patents to the treatments of atopic dermatitis and to the treatment of vitiligo, with expiration dates of 2040, further broadening the protection of the Opzelura franchise.

Povorcitinib (formerly INCB54707), an oral small molecule selective JAK1 inhibitor, is currently being evaluated in patients with HS, a chronic skin condition where lesions develop as a result of inflammation and infection of the sweat glands. A Phase II study evaluating the efficacy and safety of povorcitinib in adults patients with HS met its primary endpoint, demonstrating significantly greater decreases in abscess and inflammatory nodule count versus placebo at Week 16. At the 12th Conference of the European Hidradenitis Suppurativa Foundation 2023, updated Week 52 results were presented, which showed that longer-term treatment with povorcitinib 75mg resulted in sustained and durable efficacy across all treatment arms. Two Phase III trials (STOP-HS1 and STOP-HS2) evaluating povorcitinib in moderate to severe HS are ongoing. At AAD 2023, we presented positive Phase II results for povorcitinib in vitiligo and a Phase II trial evaluating povorcitinib in patients with prurigo nodularis is ongoing.

Other Hematology and Oncology

In August 2022, Pemazyre© (pemigatinib) was approved by the FDA as the first and only targeted treatment for myeloid/lymphoid neoplasms (MLNs) with FGFR1 rearrangement. In March 2023, Pemazyre was approved by the Japanese Ministry of Health, Labour and Welfare (MHLW) for the treatment of myeloid/lymphoid neoplasms (MLNs) with FGFR1 fusion (also known as 8p11 myeloproliferative syndrome). MLNs with FGFR1 rearrangement are extremely rare and aggressive blood cancers.

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Partnered Programs (Incyte is eligible for royalties and milestone payments)

Discovery Capabilities

Clinical Development Pipeline

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Responsiveness to Stockholder Feedback

ANNUAL OUTREACH TO
STOCKHOLDERS:

80%

OF SHARES OUTSTANDING

Action			Year of Implementation
Governance
✓ Adopted a proxy access bylaw			2021
✓ Adopted equity ownership guidelines			2016, amended 2021
✓ Adopted a director overboarding policy			2020
Compensation
✓ Adjusted the executive compensation pay mix to include higher percentages of performance shares			Performance Shares added in 2018; increased % of performance shares in 2020 and 2022
✓ Established a three-year performance period for performance shares award to our CEO and other U.S.-based executive officers			2020
✓ Redesigned the director compensation program to be based on a set target value instead of fixed share grants			2019
✓ Eliminated special equity grants to the CEO			2019
✓ Added enhanced disclosure on certain items such as goal achievement			2017
ESG
✓ Added ESG goals to our Annual Incentive Plan			2022
✓ Disclosed ethnic and racial diversity data for U.S. workforce			2021
✓ Enhanced ESG disclosure			2019

Stockholder feedback in 2022 was largely positive, with investors expressing support for the progress Incyte has made in recent years. We believe that our current compensation structure, as described in more detail in subsequent pages of this Proxy Statement, strikes the right balance of motivation and retention for our executives. The graphic below shows the evolution of our executive compensation structure over the last several years.

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(1)

Note that stock options and RSUs vest over 4 years while performance shares, if earned, cliff vest after 3 years.

Compensation Discussion and Analysis

	What We Do
	✓ We pay for performance, including having a total stockholder return (TSR) component for 2022 performance shares			✓ We have a compensation clawback policy
	✓ 1/3 of executives’ target equity award value is in the form of performance shares			✓ Our Compensation Committee uses an independent compensation consultant, Compensia, and considers peer groups in establishing executive compensation
	✓ Performance shares have a three-year performance period			✓ Robust anti-hedging and anti-speculation policies in place
	✓ Robust stock ownership guidelines for our CEO, executive officers and our directors			✓ Our Compensation Committee is comprised of all independent directors
	✓ Double-trigger equity vesting in the event of a change-in-control			✓ We conduct an annual say-on-pay vote
	✓ Stock Options and RSU awards have a minimum vesting period of 12 months with a vesting period over 4 years			✓ We engage proactively with our stockholders throughout the year
	✓ Performance share awards cliff vest after 3 years			✓ We require our executives to plan any stock trading in advance through the use of 10b5-1 plans

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	What We Don’t Do
	✗ We do not reprice stock options			✗ We do not provide golden parachute excise tax gross-ups
	✗ We do not provide single-trigger equity vesting in the event of a change-in-control			✗ We do not provide excessive perquisites for executives

Compensation Program Strategy and Objectives

The performance-based and time-based components of our equity compensation program are designed to encourage an appropriate level of risk-taking and a focus on sound long-term decision-making, thus aligning executive interests with the long-term best interests of our Company and our stockholders.

The Compensation Committee of our Board believes that the compensation of our executive officers should:

•

Pay for performance;

•

Encourage both creation of stockholder value and achievement of strategic corporate objectives;

•

Integrate compensation with our annual and long-term corporate objectives and strategy, and focus executive behavior on the fulfillment of both of those objectives;

•

Provide a competitive total compensation package that enables us to attract and retain, on a long-term basis, qualified personnel; and

•

Provide fair compensation consistent with internal compensation programs.

Our executive officers’ compensation currently includes three primary components: base salary, cash bonus, and equity-based incentive awards.

•

Salary is a fixed amount and does not vary with our performance.

•

Cash bonus under our annual incentive compensation plan varies with our performance

•

Equity-based incentive awards can be made up of restricted stock units, performance shares or stock options.

All components of our executives’ compensation, other than base salary, are closely tied to our Company’s performance—either through the amounts (if any) of each component actually received or the value of each component over time, or both—and each such component of executive compensation contributes toward our goal of delivering long-term stockholder value. Each of the equity-based components—including the performance shares that only become earned upon achievement of pre-determined goals—are also subject to time-based vesting, which the Compensation Committee believes incentivizes executive retention.

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Below is our 2022 Compensation Matrix:

(1)

Restricted Stock Units comprised 1/3 of target equity value for 2022. For a further description of the evolution of the equity compensation program for our executive officers, see “—Our Equity Grant Practices”, starting on page 52.

(2)

Performance shares comprised 1/3 of target equity value for 2022. For a further description of the evolution of the equity compensation program for our executive officers, see “—Our Equity Grant Practices”, starting on page 52.

(3)

Stock options comprised 1/3 of target equity value for 2022. For a further description of the evolution of the equity compensation program for our executive officers, see “—Our Equity Grant Practices”, starting on page 52.

As the design of our executive compensation program shows, the Compensation Committee believes that executive compensation should be designed to pay for performance. Our Company has made great progress in recent years, and executive compensation has reflected that performance.

CEO Compensation versus Peers

The charts below illustrate how the percentage of our CEO’s compensation that is tied to performance compares with those of our peer group of companies. The Compensation Committee believes Mr. Hoppenot’s compensation is in-line with our peer group’s compensation as disclosed in their 2022 proxy statements, with Mr. Hoppenot’s at-risk compensation percentage being consistent with the peer group mix.

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CEO AT-RISK COMPENSATION IS ON PAR WITH PEER GROUP

Median peer CEO compensation reflects 2021 compensation from the 2022 proxy statements of the peer group.

Implementing Our Objectives—Role of Compensation Committee and Our Chief Executive Officer

The Compensation Committee approves, administers and interprets our executive compensation and benefits policies, including our 2010 Stock Incentive Plan. The Compensation Committee evaluates the performance of our CEO and determines his compensation in light of the goals and objectives of our compensation program. Our CEO and the Compensation Committee together assess the performance of our other executive officers and determine their compensation, based on initial recommendations from our CEO.

Role of the Independent Compensation Consultant

Under its charter, the Compensation Committee has the sole authority to retain any independent compensation consultant or other advisor as the Committee may deem appropriate. Pursuant to this authority, the Compensation Committee has engaged Compensia, a national compensation consulting firm, for support on matters related to the compensation of our executive officers. Compensia does not provide any other services to our Company.

Compensia was retained by the Compensation Committee to prepare compensation analyses for our executive officers and the non-employee members of our Board of Directors. Specifically, for our executive officers, Compensia was directed to provide a competitive market analysis of the base salary, annual cash incentive awards, and long-term incentive equity compensation of our executive officers compared against our compensation peer groups and to review other market practices and trends. This market analysis was reviewed with the Compensation Committee in connection with its early 2022 compensation decisions, and was used to guide decisions regarding base salary adjustments and target annual cash and equity incentive award opportunities.

Market Reference Data

The Compensation Committee utilizes market reference data to evaluate the competitiveness of our executive officers’ compensation and to determine whether the total compensation paid to each of our named executive

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officers is appropriate. When arriving at final compensation decisions, the Compensation Committee considers and assesses factors in addition to market reference data, including individual and company performance, each executive’s role and responsibilities, internal equity, retention requirements and the competitive market, unrealized equity gains, and best compensation governance practices. The Committee does not tie compensation to specified target percentiles. In connection with its analysis for purposes of 2022 compensation decisions, the Compensation Committee reviewed information prepared by Compensia comparing the compensation for our executive officers with data from SEC filings and the Radford Global Life Sciences Survey for a peer group comprised of 15 publicly traded biopharmaceutical companies. We collectively refer to these data as the competitive compensation data. The peer group for 2022 compensation decisions, referred to as the 2022 peer group, was chosen based on the following characteristics: direct competitors for talent; comparable business models and stage; and of broadly similar size in revenue, market capitalization and/or headcount.

In October 2022, the Compensation Committee determined to retain the 2022 peer group for 2023 (referred to as the 2023 peer group) and the same peer group was used for 2023 compensation decisions.

The following table shows Incyte versus the 2023 peer group on 2022 total revenue, total employees, and market capitalizations (market cap). All data is as of December 31, 2022.

Company	Total Revenue ($M)		Company	Total Employees		Company	Market Cap ($M)
Gilead		27,281	Gilead		17,000	Gilead		107,677
Regeneron		12,173	Regeneron		11,851	Regeneron		78,559
Biogen		10,173	Biogen		8,725	Vertex		74,127
Vertex		8,931	Vertex		4,800	Biogen		39,877
Jazz		3,659	SeaGen		3,256	Alnylam		29,238
Incyte		3,395	BioMarin		3,082	SeaGen		23,860
BioMarin		2,096	Jazz		2,800	BioMarin		19,234
SeaGen		1,962	Incyte		2,324	Incyte		17,869
Exelixis		1,611	Alkermes		2,280	Neurocrine		11,482
Neurocrine		1,489	Alnylam		2,002	Sarepta		11,375
Alkermes		1,112	Exelixis		1,223	Jazz		10,031
Alnylam		1,037	Neurocrine		1,200	Ionis		5,365
Sarepta		933	Sarepta		1,162	Exelixis		5,174
Ionis		587	Ionis		796	Alkermes		4,294
Amarin		369	Sage		689	Sage		2,269
Sage		8	Amarin		365	Amarin		489

Our Equity Grant Practices

In 2019, the Compensation Committee noted Compensia’s observation that our mix for executives of 75% stock options and 25% performance shares put our executives’ equity-based compensation more at-risk than our peer group and the broader market norm and that, on average, our peers deliver approximately 25% of executive equity compensation value in the form of time-based vesting RSUs, with approximately 50% being delivered in the form of stock options and approximately 25% being delivered in the form of performance-based shares or options. The Committee also noted that, due to our stock price decline and limited use of RSUs, realizable compensation for our executives for 2016 through 2018 fell well below target compensation values. Accordingly, to enhance executive retention and bring our executive equity compensation practices in line with our peers, the Committee determined that, for 2019, our executives would receive 50% of their total grant date target value in the form of stock options, 25% in the form of performance shares, and 25% in the form of RSUs.

In 2020, the Compensation Committee noted stockholder feedback regarding our performance-based equity awards and determined that, for 2020, our executives will receive 40% of their total grant date target value in the form of stock options, 30% in the form of performance shares, and 30% in the form of RSUs. Those percentages

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remained the same for 2021. In addition, as discussed below under “Key Elements of Executive Compensation—Equity Based Incentive Awards,” performance shares granted in 2020 and 2021 would have a three-year performance period.

For 2022 and 2023, the Compensation Committee determined that our executives will receive 1/3 each of their total grant date target value in the form of stock options, performance shares and RSUs.

While the equity awards are actually granted in July of each year, the Compensation Committee determines the overall equity grant target value for our executive officers in the early portion of the year, in conjunction with the determination of base salary adjustments and the establishment of the annual incentive compensation plan described in greater detail below. Based on those target values, the share numbers of our annual stock option grants are determined in the middle of each calendar year, with one-half of the grants made at that time and one-half made at the beginning of the following calendar year, with a view toward countering some of the effects of the volatile trading price of our common stock.

Our annual stock option grants have a ten-year term with four-year service-based vesting with one-quarter vesting after one year and the remainder vesting in 36 equal monthly installments. Our annual executive performance share and RSU awards are made in the middle of each calendar year.

In 2020, three-year performance periods were introduced for performance share awards, and these performance share awards vest, assuming performance goals are achieved at specified levels, on the third anniversary of the grant date, and are described further below. The RSU awards vest in equal installments on each of the first four anniversaries of the grant date.

The Compensation Committee also has the discretion to make outstanding merit awards, which for 2019 were stock options with a ten-year term that vest in a single installment after four years and starting in 2020 were RSUs that vest in a single installment after four years. The change from stock options to RSUs was due to the significant volatility of our share price and the share prices of our peers, to provide greater certainty for the retentive value of these awards, if granted. These awards can be made to executives other than our CEO as well as other key employees throughout our Company and are typically made in connection with salary adjustments at the beginning of each year as the awards are intended to award prior year performance and to incentivize and retain the recipients. Our CEO championed the creation of the outstanding merit grant program to recognize important contributions—both within a function and the Company as a whole—by leaders throughout our organization. Previously, our CEO received these grants too, but, starting in 2019, in response to stockholder feedback, the Compensation Committee eliminated awards of outstanding merit grants to our CEO.

In addition, as described below, in November 2021, the Compensation Committee approved equity awards to our executive officers (not including our CEO) with 50% of the approval date target value in the form of performance shares granted on December 1, 2021 and the remaining 50% of the approval date target value in the form of RSUs granted on January 1, 2022. As a result of these retention awards, no outstanding merit awards were made to any executive officer in January 2022 for prior year performance.

The exercise price of each stock option awarded under our 2010 Stock Incentive Plan is the closing price of our common stock on the date of grant, which for our annual stock option grants are the dates of the regularly scheduled Compensation Committee meetings or actions without meetings, which are taken following decisions at meetings, in the middle of the year at which equity awards for senior executives are formally determined and at the beginning of the year at which salary adjustments and cash bonuses under our incentive compensation plan are determined. These meetings are scheduled in advance, and we do not coordinate the timing of equity award grants with the release of financial results or other material announcements by our Company. Under our 2010 Stock Incentive Plan, we may not reprice or replace options at lower exercise prices without stockholder approval.

Compensation Practices and Policies

Equity Ownership Guidelines. Effective January 1, 2016, our Board adopted robust equity ownership guidelines for members of senior management, including our executive officers, and members of the Board. The guidelines were amended and restated in November 2021 to narrow the types of securities that would count toward the ownership requirements. Under these guidelines, the covered individuals are expected to meet the following equity ownership requirements:

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	Equity Ownership Requirements
	CEO			6x Annual Base Salary
	All Other Executive Officers			3x Annual Base Salary
	Non-Employee Members of the Board			6x Annual Cash Retainer

Our CEO has met this requirement.
All other directors and executive officers have either met their respective equity ownership targets or are within the five-year period for achieving compliance.

Covered individuals as of January 1, 2016 must have satisfied these guidelines by December 31, 2020, and individuals who subsequently become subject to the guidelines will have five years to reach their ownership requirements. Shares held directly, shares held indirectly, such as by a trust or a 401(k) plan, unvested restricted shares and RSUs, and earned performance shares that remain subject to service-based vesting requirements are included in determining an individual’s equity ownership. Stock options (whether vested or unvested) and unearned performance shares are not counted toward meeting these guidelines. Prior to the 2021 guideline amendments, shares underlying vested stock options were included in determining equity ownership. For purposes of these guidelines, a non-employee director’s annual cash retainer does not include cash retainers for committee service.

Compensation Recovery Policy. In late 2017, in response to our 2017 stockholder engagement campaign (described more fully under “Stockholder Engagement” starting on page 11), our Compensation Committee adopted a compensation recovery (“clawback”) policy which provides that, in the event that, on account of fraud or other intentional misconduct, we are required to prepare an accounting restatement, we may recover from any executive officer any incentive compensation erroneously paid or awarded in excess of what would have been paid under the accounting restatement. This policy applies prospectively to certain incentive compensation paid or awarded after January 1, 2018, its effective date, and covers the three-year period preceding the date on which we are required to prepare the accounting restatement. The incentive compensation to which it applies is cash bonuses or other cash awards to the extent those bonuses or awards are earned based on the attainment of a financial reporting measure presented in our financial statements or derived from our accounting records. In addition, we are subject to the provisions of Section 304 of the Sarbanes-Oxley Act of 2002, which provides that if we are required as a result of misconduct to restate our financial results due to our material noncompliance with any financial reporting requirements under the federal securities laws, our CEO and CFO may be legally required to reimburse us for any bonus or other incentive-based or equity-based compensation they receive. To the extent our policy is inconsistent with the final regulations adopted by the SEC to implement the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the listing standards adopted by The Nasdaq Stock Market to implement those SEC regulations, we intend to revise our policy to comply with those regulations.

Limitations on Hedging and Pledging. Under our insider trading policy, our employees, including our executive officers, and Board members are prohibited from trading in our securities on a short-term basis, purchasing our securities on margin, making short sales in our securities, buying or selling put or call options on our stock, pledging our securities as collateral for a loan, and engaging in other hedging or monetization transactions such as prepaid variable forwards, equity swaps, collars and exchange funds, that permit a holder to continue to own our securities but, without the full risks and rewards of ownership.

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Tax Deductibility of Compensation

Section 162(m) of the Internal Revenue Code places a limit of $1,000,000 on the amount of compensation that we may deduct in any one year with respect to our CEO and each of the next three most highly compensated executive officers (excluding the chief financial officer for taxable years prior to 2018). Section 162(m) historically permitted deductions in excess of $1,000,000 for “performance-based compensation,” which included stock options meeting certain requirements, but the exception for “performance-based compensation” has been repealed effective for taxable years beginning after December 31, 2017.

Stock options that we granted in 2017 and prior years should still qualify for full deductibility under a transition rule for amounts payable pursuant to written binding contracts in effect on November 2, 2017. To maintain flexibility in compensating our executive officers, the Compensation Committee has not adopted a policy requiring all executive compensation to be deductible.

Key Elements of Executive Compensation

Our executive officers’ compensation currently includes three primary components: base salary, cash bonus, and long-term equity-based incentive awards. Of these components, only base salary is not tied directly and meaningfully to our Company’s performance because base salary is intended to attract and retain key talent by providing a stable source of income. In addition, we provide our executive officers a variety of benefits that are available generally to all salaried employees. Each of these components is described in more detail below.

Base Salary

Base salaries are designed to attract and retain qualified personnel by providing a consistent cash flow throughout the year as compensation for acceptable levels of performance of day-to-day responsibilities. Base salaries for our executive officers are established based on the scope of their responsibilities, their performance, and their prior relevant background, training and experience, taking into account competitive market compensation paid by the companies represented in the compensation data we review for similar positions and the overall market demand for those executive officers at the time of hire. The Compensation Committee reviews salaries on an annual basis. At such time, the Compensation Committee may change each executive officer’s salary based on the individual’s contributions and responsibilities over the prior twelve months and any change in competitive market pay levels.

In January 2022, the Compensation Committee set the 2022 base salaries for our executive officers. The Committee considered our Company’s performance in 2021, including our commercial operations, clinical trial progress of our other drug candidates, job performance, internal pay alignment and equity, marketplace competitiveness and the 2022 peer group data in determining the base salaries for 2022.

In January 2023, the Compensation Committee set the 2023 base salaries for our executive officers. The Committee considered our Company’s performance in 2022, including our commercial operations, clinical trial progress of our other drug candidates, job performance, internal pay alignment and equity, marketplace competitiveness and the 2023 peer group data in determining the base salaries for 2023. The following table sets forth the salary increases that became effective on January 29, 2023 for our named executive officers listed in the Summary Compensation Table.

Name	2022 Base Salary			2023 Increase		2023 Base Salary
Hervé Hoppenot		$	1,234,920		5.0%		$	1,296,666
Christiana Stamoulis		$	654,092		5.0%		$	686,797
Steven H. Stein		$	751,301		3.5%		$	777,597
Maria E. Pasquale		$	590,074		5.0%		$	619,578
Barry P. Flannelly		$	573,353		5.0%		$	602,021

Annual Incentive Compensation Plan

Each year, we have established an incentive compensation plan that provides for cash incentive awards for all of our eligible employees. The plans have been designed to pay for performance by aligning incentive awards for each participant with an evaluation of our achievement of corporate objectives. These corporate objectives are approved

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by the independent members of our Board based on the recommendations of the Compensation Committee, as well as, in the case of individuals other than our CEO, the achievement of individual business objectives for a particular year. Eligibility to participate in the plans and actual award amounts are not guaranteed and are determined, in the case of our executive officers, at the discretion of the Compensation Committee. After the completion of each year, the Compensation Committee reviews with our CEO the level of achievement of the corporate objectives under the plan and determines the size of the overall bonus pool to be used for awards. The Compensation Committee, with input from our CEO with respect to our other executive officers, may use discretion in determining for each executive officer his or her bonus amount.

Incentive awards for our executive officers were approved by the Compensation Committee and paid in 2023 pursuant to our 2022 incentive compensation plan. Each of our executive officers, other than our CEO, had a funding target under the plan ranging from 50% to 60% of his or her annual base salary for 2022, with the potential for actual awards under the plan to either exceed or be less than the funding target depending upon corporate performance, as well as the executive officer’s achievement of certain individual goals that are predetermined by our CEO. Our CEO had a funding target under the plan of 110% of his annual base salary for 2022, with the potential for actual awards under the plan to either exceed or be less than such funding target depending upon corporate performance.

Target incentive award amounts for each participant were based on the participant’s potential impact on our operating and financial results and on market competitive pay practices. Individual performance goals were also established for eligible employees other than our CEO, and evaluations were based upon whether the employee met, exceeded or did not meet each established goal. The Committee believes that it is appropriate to align a higher percentage of our executive officers’ total cash compensation with the achievement of our Board-approved corporate objectives because those objectives are determined with a view toward progressing our Company’s business and maximizing stockholder value. Linking a significant percentage of executive officer cash incentive awards to achievement of Committee-approved corporate objectives puts a substantial portion of our CEO’s and executive officers’ cash compensation at risk, and is another way the Committee has designed executive compensation to pay for performance.

Annual Incentive Compensation Plan 2022 Corporate Performance Objectives

Corporate performance objectives for 2022 were based on achievement of the objectives in the following categories: discovery, clinical development and global commercial, with business development objectives providing additional bonus opportunities.

Threshold, target and outperform achievement levels were defined for each corporate objective and, depending on the achievement of those performance levels, a payout ranging from 0% to 150% may have been made for each core objective. Bonus objectives included an extra 20% for Discovery, an extra 20% for Clinical Development and an extra 5% for Business Development. Collectively, the bonus opportunities enabled the payout of up to an additional 45 percentage points for extraordinary achievements beyond core objectives.

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