Acorn Energy Inc

This management proposal requests shareholder approval of the Company’s new 2026 Stock Incentive Plan, authorizing a reserve of 200,000 shares to be used for a wide range of equity and cash-based awards (options, SARs, restricted shares, performance awards, and other share-based awards). Management says the current plan is nearly depleted and that replenishing the reserve is important to attract and retain key senior management and employees and to align their interests with shareholders. The plan is broadly permissive, giving the plan committee discretion over award types, sizes, pricing (with option prices generally set at fair market value or a premium), and re-use of shares that are forfeited or otherwise returned to the pool, while preserving shareholder approval requirements when legally required. The plan contains standard governance features including committee administration, limitations on re-pricing absent shareholder approval in most circumstances, and provisions addressing Section 162(m) qualification and change-in-control treatment. From a shareholder-perspective the proposal balances routine needs for incentive compensation against dilution risk: a 200,000-share reserve represents a material potential increase in outstanding awards for a company with ~2.51 million shares outstanding, and future dilution will depend on the committee’s grant practices. The plan also includes anti-dilution adjustments for corporate events and broad discretion to adjust awards for foreign jurisdictions and service providers, which is practical but gives significant latitude to management. The Board recommends FOR on the basis that continued ability to grant equity awards is necessary for recruitment, retention, and alignment, but investors should assess the size of the reserve, vesting and performance conditions applied, and the company’s overall equity grant pacing to judge long-term dilution and alignment. Overall, the proposal is typical of small-cap issuers seeking to replenish an exhausted equity plan to retain flexibility in compensating executives, directors, and consultants, while including customary safeguards such as shareholder approval requirements for certain changes.

This management-sponsored, non-binding advisory proposal asks shareholders to approve the Company’s named executive officer compensation as disclosed in the proxy. Management frames executive pay as appropriately balanced between fixed fees and variable incentives, designed to align executives’ interests with stockholders and to recruit and retain talent; the Board pledges to consider the vote outcome when making future pay decisions. Key context in the proxy shows compensation delivered through consulting agreements with named executives (notably multi-year consulting agreements and option grants), sizable option grants in 2026 (25,000 options to each of the CEO and CFO under 2026 consulting agreements) and recurring annual option awards to directors and officers; these features increase the importance of assessing pay-for-performance alignment and potential dilution. The advisory vote is non-binding but functions as the principal mechanism for shareholder feedback on pay practices; a vote against could prompt the Board to re-evaluate compensation design, pace of option grants, or disclosure. From a governance perspective, investors will weigh the apparent alignment via equity awards against concentration of voting/ownership among insiders and the use of consultant engagement arrangements in lieu of employment, which can affect benefit and severance structures. The Board recommends FOR, citing alignment, competitiveness, and pay-for-performance, but sophisticated investors should review grant sizes, vesting, performance conditions, consultant vs. employment status, and any related-party considerations when forming a view. The company’s commitment to consider shareholder feedback provides a channel for engagement and potential adjustments to future compensation practices.