Guardant Health Grants Inducement Equity Awards to New Employees Under Nasdaq Listing Rule 5635(c)(4)
Guardant Health, a leading precision oncology company, announced that its Board of Directors’ Compensation Committee has approved inducement equity grants designed to attract and retain top talent as the company continues its mission of transforming cancer care.
On July 22, 2025, Guardant’s Compensation Committee authorized the issuance of restricted stock units (RSUs) covering 239,565 shares of common stock to 189 new non-executive employees, along with two non-qualified stock option awards to purchase 23,542 shares of common stock to two additional non-executive employees. The equity awards carry an official grant date of August 1, 2025, and were issued under the Guardant Health, Inc. 2023 Employment Inducement Incentive Award Plan (the “Inducement Plan”).
These grants were made pursuant to Nasdaq Listing Rule 5635(c)(4), which allows companies to issue equity awards to new employees without requiring shareholder approval when such awards are used as a material inducement to employment.
Supporting Growth Through Talent Recruitment
Guardant Health has grown rapidly in recent years, fueled by increasing adoption of its blood-based tests for cancer detection, treatment selection, and monitoring. As the company expands its research, clinical development, and commercial operations, it requires a highly skilled workforce across a range of disciplines, including oncology research, diagnostics, technology development, regulatory compliance, and data science.
The company emphasized that the Inducement Plan is reserved exclusively for new hires who have not previously worked at Guardant Health, or who are returning after a bona fide period of non-employment. This ensures that inducement awards are truly aligned with the Nasdaq rule’s intent — to help employers recruit talent in competitive industries where equity incentives are a key part of compensation packages.
By structuring equity awards in this way, Guardant is not only rewarding employees for joining the company but also aligning their long-term financial interests with those of shareholders. Equity compensation encourages employees to contribute to Guardant’s success by linking their potential rewards directly to the performance of the company’s stock.
Details of the Restricted Stock Unit (RSU) Awards
The newly approved RSU awards represent 239,565 shares of Guardant’s common stock in aggregate. Each RSU is a promise to deliver a share of common stock at a future vesting date, contingent on continued employment.
The company outlined a three-year vesting schedule for these RSUs:
- One-third of the shares underlying each award will vest on the first anniversary of the vesting commencement date.
- The remaining shares will vest in two equal annual installments on subsequent anniversaries.
- Vesting is subject to continued employment at Guardant Health, meaning employees must remain with the company through each vesting date to earn their shares.
This approach to vesting is common among growth-oriented life sciences and technology companies. It creates a retention mechanism, encouraging employees to stay and contribute to Guardant’s mission over multiple years while benefiting from potential stock price appreciation.
Details of the Stock Option Awards
In addition to the RSUs, Guardant granted two stock option awards covering 23,542 shares in total to two new employees. These stock options carry an exercise price of $41.42 per share, which matches the closing price of Guardant Health’s common stock on the Nasdaq Global Select Market on the August 1, 2025 grant date.
Stock options provide employees with the right, but not the obligation, to purchase shares of common stock at the exercise price after vesting. If Guardant’s stock price rises above $41.42 in the future, employees can purchase shares at the lower fixed price and realize a financial gain. If the stock price falls below the exercise price, the options lose value but no financial risk is incurred by employees.
The options will vest on the following schedule:
- One-third of the shares vest after the first anniversary of the vesting commencement date.
- The remaining two-thirds vest monthly over the following 24 months, provided the employees remain continuously employed.
This staggered vesting structure blends long-term retention incentives with gradual monthly vesting, offering employees both stability and incremental ownership opportunities.
Nasdaq Listing Rule 5635(c)(4) and Its Importance
The issuance of inducement grants is permitted under Nasdaq Listing Rule 5635(c)(4). Normally, equity awards such as stock options and RSUs require shareholder approval when granted outside of an established equity incentive plan. However, Nasdaq rules provide an exception for inducement awards, recognizing that equity incentives are often crucial for attracting employees in highly competitive industries like biotechnology and technology.
For an award to qualify under this rule, it must be:
- A material inducement to the individual entering into employment.
- Granted only to new employees, not existing ones (with limited exceptions for individuals rejoining after a true break in service).
- Approved by the compensation committee or a majority of independent directors on the board.
- Properly disclosed in a press release, ensuring transparency for shareholders and the market.
By adhering to these requirements, Guardant Health demonstrates both compliance with regulatory standards and a commitment to open communication with investors.
The Inducement Plan: Structure and Purpose
Guardant adopted the 2023 Employment Inducement Incentive Award Plan specifically to issue inducement equity grants. The plan operates separately from the company’s shareholder-approved equity incentive plans, ensuring that inducement awards do not dilute or compete with the pool of shares authorized by shareholders for ongoing employee incentives.
The Inducement Plan reflects Guardant’s understanding of how equity compensation functions as a powerful tool for recruitment. In biotechnology and precision medicine, companies compete not only with peers but also with pharmaceutical giants, technology firms, and emerging startups for a limited pool of skilled professionals.
Offering equity as part of employment packages enables Guardant to attract top-tier researchers, engineers, clinicians, and executives who want to share in the company’s future growth.
Strategic Significance for Guardant Health
Guardant Health is widely regarded as one of the leaders in precision oncology. Its portfolio includes advanced liquid biopsy tests that analyze circulating tumor DNA in blood samples, helping clinicians detect cancer earlier, guide treatment decisions, and monitor for recurrence. The company’s progress in minimal residual disease (MRD) testing and early cancer detection has positioned it at the forefront of innovation in oncology diagnostics.
Recruiting and retaining top talent is critical as Guardant scales its operations and continues to develop next-generation technologies. The inducement equity awards approved in July and granted in August 2025 underscore this strategy.
By providing meaningful equity incentives, Guardant ensures that new employees are not just workers but also stakeholders invested in the company’s long-term success. This alignment of interests is particularly important as Guardant pursues ambitious goals, including:
- Expanding access to its blood-based cancer detection tests.
- Advancing collaborations with biopharmaceutical companies and healthcare providers.
- Driving adoption of precision oncology solutions globally.
- Continuing innovation in early cancer detection research.
Investor and Employee Alignment
From an investor standpoint, inducement grants are a way to support the company’s growth without needing to seek immediate shareholder approval for every new-hire award. While they contribute to some level of equity dilution, the expectation is that the value generated by hiring skilled employees outweighs the dilution impact.
For employees, receiving RSUs and stock options provides both immediate and long-term value:
- RSUs deliver guaranteed shares over time, offering a form of ownership regardless of stock price movements.
- Options provide leveraged upside potential if Guardant’s stock price rises above the exercise price.
This dual approach balances security with opportunity, appealing to a wide range of professionals.
