AKAO 2018 Proxy Statement

31 Base Salary Base salaries provide our NEOs with a reasonable degree of financial certainty and stability. Our Compensation Committee annually reviews and determines the base salaries of our executives and evaluates the base salaries of new hires at the time of hire. Our Compensation Committee considers the 50 th percentile of market in setting base salaries, though it takes into account other factors as set forth under “ Determination of Executive Compensation .” In February 2017, our Compensation Committee (or Board in the case of Dr. Hillan) approved salary increases for 2017 as set forth below, which were based on market data, individual performance and promotions, as applicable. The base salaries for Mr. Wise and Dr. Swem were also intended to reflect their increased responsibilities in connection with their promotions to President and Chief Operating Officer and Chief Scientific Officer, respectively. Following such determinations, our NEOs’ base salaries were as set forth below: Name 2017 Annual Base Salary % Increase from 2016 Kenneth Hillan M.B., Ch.B. $ 452,400 4.0% Blake Wise $ 450,000 9.8% Tobin C. Schilke $ 365,000 15.9% Lee Swem, Ph.D. $ 320,000 16.4% Gary Loeb (1) $ 360,000 0.0% Ian Friedland, M.D. $ 426,700 1.0% (1) Mr. Loeb was not eligible for a salary increase as he joined the Company in the final quarter of 2016. Annual Performance-Based Incentive Compensation For 2017, our NEOs were eligible for performance-based cash incentives pursuant to the achievement of certain performance objectives, as well as individual contributions for our NEOs other than our CEO. Each NEO’s target bonus opportunity is expressed as a percentage of base salary. For 2017, our Board and Compensation Committee set target bonus levels based on different tiers for our CEO, President, EVPs and SVPs, as the Board and Compensation Committee believes that the level of responsibility held by each executive directly correlates to the executive’s ability to influence corporate results. In February 2017, our Compensation Committee (or Board in the case of Dr. Hillan) approved the target bonuses set forth below, which remained unchanged from 2016, other than for Mr. Wise and Dr. Swem, whose target bonuses were increased from 35% and 30%, respectively from 2016. These increases reflect their increased responsibilities in connection with their promotions to President and Chief Operating Officer and Chief Scientific Officer, respectively, and are consistent with the Company’s target bonus levels for each tier of executive. Name 2017 Target Bonus Kenneth Hillan, M.B., Ch.B. 50% Blake Wise 45% Tobin C. Schilke 35% Lee Swem, Ph.D. 35% Gary Loeb 35% Ian Friedland, M.D. 35% Under our 2017 bonus program, Dr. Hillan’s bonus was 100% tied to our performance on corporate goals. Each of our other NEOs’ bonuses were determined based on corporate performance with respect to 70% and individual performance with respect to 30%. For determining the corporate performance bonus amounts for our NEOs for 2017, the Board set certain corporate performance goals for fiscal 2017, consisting of primary milestones and secondary goals related to the regulatory approval of and launch preparations for plazomicin, business development objectives, research and development initiatives, fundraising targets and human resources metrics. The Board believed that each of these goals would require a high level of executive officer performance in order to be achieved. The Board also retained discretion to consider factors related to Company performance that may not have been anticipated when the goals were established at the beginning of the year. The Board has a practice and history of considering all important aspects of Company and executive performance in setting actual bonuses. Further,