APLS 2018 Proxy Statement

EXECUTIVE AND DIRECTOR COMPENSATION Executive Compensation This section describes the material elements of compensation awarded to, earned by or paid to each of our named executive officers in 2017. Our named executive officers for 2017 were Cedric Francois, Pascal Deschatelets and Timothy Sullivan. This section also provides qualitative information regarding the manner and context in which compensation is awarded to and earned by our executive officers and is intended to place in perspective the data presented in the tables and narrative that follow. 2017 Summary Compensation Table The following table sets forth information regarding compensation earned by our named executive officers in the years ended December 31, 2017 and 2016. Name and Principal Position Year Salary ($) Bonus ($)(1) Option Awards ($)(2) Total ($) Cedric Francois, M.D., Ph.D.(3) . . . . . . . . . . . . . . . . . . . . . . 2017 400,000 225,000 1,037,972 1,663,422 President & Chief Executive Officer 2016 325,000 290,000 882,511 1,497,511 Pascal Deschatelets, Ph.D. . . . . . . . . . . . . . . . . . . . . . . . . . . 2017 279,227 120,000 461,321 860,998 Chief Operating Officer 2016 250,000 135,000 567,737 952,737 Timothy Sullivan(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017 68,939 40,000 2,187,760 2,296,699 Chief Financial Officer (1) The amounts reported in the “Bonus” column represent discretionary annual cash bonuses awarded to our named executive officers. (2) The amounts reported in the “Options Awards” column reflect the aggregate grant date fair value of share- based compensation awarded during the year computed in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification, or ASC, Topic 718. (3) Dr. Francois also serves as a member of our board of directors but does not receive any additional compensation for her service as a director. (4) Mr. Sullivan joined Apellis as our Chief Financial Officer in October 2017. The salary information for 2017 reflects the amount paid to Mr. Sullivan’s for the portion of the year during which he served as our Chief Financial Officer, based on his 2017 salary of $325,000. Narrative Disclosure to Summary Compensation Table During the past fiscal year, the Compensation Committee retained Radford, an AON Hewitt Company, or Radford, a national executive compensation consulting firm, because of its reputation and previous experience advising similarly situated companies. The Compensation Committee requested that Radford establish a compensation peer group; assess our executive compensation program and develop recommendations covering salary, bonus, incentive and equity compensation; review the peer group’s long-term incentive compensation trends; assist with governance related matters and risk-assessment; review and assist in designing an equity compensation strategy for non-officer employees; review and provide the committee advice regarding executive employment agreements, severance benefits and payments upon a change in control; and review our director compensation program. At the request of the Compensation Committee, Radford also conducted individual interviews with members of the Compensation Committee and senior management to learn more about our business operations and strategy, key performance metrics and strategic goals, as well as the labor markets in which we compete. Radford ultimately developed recommendations that were presented to the Compensation Committee for its consideration. Following an active dialogue with Radford, the Compensation Committee approved the recommendations. - 18 -