AKAO 2018 Proxy Statement

27 • Secured funding and partnerships for the organization through both non-dilutive funding and capital markets; and • Assisted in retention of employees by advancing Company culture and supporting employees as demonstrated through employee surveys. 2017 Compensation Highlights. Consistent with our compensation philosophy, key compensation decisions for 2017 included the following: • Base Salaries and Target Annual Cash Incentive Opportunities . In 2017, our CEO’s annual base salary was increased 4% from his 2016 annual base salary, and the base salaries of our other NEOs were increased from 1% to 16%, in some cases reflecting increased responsibilities and promotions. Such increases were reviewed in light of the market analysis of our independent compensation consultant. • Annual Cash Incentives . For 2017 performance-based annual bonus program, our Board considered a mix of clinical, research, talent and other strategic goals intended to promote our business plan and short-term goals. After assessing the extent to which we achieved these goals in 2017, the Board and Compensation Committee set the corporate performance component of annual bonus payout at 70% of target for NEOs. • Equity-Based Long Term Incentives . In 2017, we granted approximately 76% of our NEOs’ (excluding Dr. Friedland, who separated in March 2017) target direct compensation as equity-based compensation in the form of stock options and restricted stock units (“RSUs”). One-fifth of our annual stock option and RSUs grants vest based on the achievement of pre-established stock price levels, as well as continued service. We believe that stock options and RSUs effectively align the interests of our executives with those of our stockholders, providing significant leverage if our growth objectives are achieved while providing significant retention value. In addition, our NEOs may only realize value from our performance-vesting stock options and RSUs if the pre-established stock price levels are attained. Commitment to Pay for Performance. Our executive compensation is designed to pay in accordance with our corporate and individual performance. Accordingly, approximately 91% of our CEO’s and approximately 77% of our other NEOs’ (excluding Dr. Friedland, who separated in March 2017) total targeted compensation for fiscal year 2017 (based on annual base salary, target cash bonus and grant date fair value of equity awards) was in the form of either (a) annual cash incentives that are tied to actual performance against pre-determined strategic and operational objectives and (b) equity awards, that are directly linked to our stock price performance and foster long- term focus and retention.