Aqua Metals Inc

This management proposal seeks stockholder approval to amend the Company’s 2019 Stock Incentive Plan by increasing the share reserve by 750,000 shares, a change the Board deems necessary under Nasdaq Rule 5635(c) for material amendments to equity plans. Management’s stated rationale is that available shares under the 2019 Plan are nearly exhausted (the filing reports only 37,749 shares available as of June 30, 2026), and the proposed increase would provide flexibility to grant options, restricted stock awards, restricted stock units, and performance awards to attract, retain and incentivize employees, officers, directors and consultants and align their interests with stockholders. The amendment would enlarge the total plan reserve to 1,150,000 shares and applies to all eligible participants; the Plan contains standard features including performance-based awards, change-in-control adjustments, and administrative authority vested in the Compensation Committee. The increase would represent approximately 21% of the Company’s outstanding shares as of June 30, 2026, so shareholders should weigh potential dilution against the expected retention and incentive benefits. From a governance perspective, the proposal is a conventional request and the Company has disclosed mechanics (recycling of forfeited shares, use of treasury or authorized but unissued shares, and anti-dilution adjustments) that mitigate some dilution concerns. The Board recommends a "FOR" vote emphasizing the operational need for equity incentives as the Company scales commercial and critical-minerals recovery efforts, while noting that the Committee can control grant practices and performance conditions. Investors should also consider the Company’s historical grant practices (many RSUs and PSUs tied to time and performance metrics) and whether future awards will be granted with rigorous performance conditions to protect long-term shareholder value. Approval would allow the Company to continue making competitive grants without requiring further shareholder action for routine equity awards, but the projected dilution and implementation details (such as grant sizes and vesting conditions) will determine the ultimate impact on shareholder value.

This advisory, non-binding "say-on-pay" proposal asks shareholders to approve the compensation of the Company’s named executive officers as disclosed in the Proxy Statement under Item 402 of Regulation S-K. Management frames the vote as a validation of pay philosophy designed to attract and retain executives through a mix of base salary, short-term incentives (STIP), and long-term incentives (LTIP) comprised largely of RSUs and PSUs with performance conditions tied to TSR and absolute stock-price hurdles. The Board and Compensation Committee recommend a "FOR" vote, citing alignment of pay with shareholder interests, retention needs for key leadership during commercialization and scaling, and use of market benchmarking and peer comparisons in setting pay. The proposal is non-binding, but the Company states it will consider the vote outcome in future compensation decisions, making it a signaling mechanism for investors concerned about pay-for-performance. Notable context for analysis includes the Company's recent disclosure that "compensation actually paid" to the CEO fell sharply in 2025 relative to prior years and the significant use of equity awards with multi-year vesting and performance conditions, which can mitigate concerns about short-termism but raise dilution questions. Analysts should evaluate whether the disclosed performance metrics, vesting schedules, and recent grant practices sufficiently tie pay to sustainable value creation, and whether the Compensation Committee’s discretion and the magnitude of equity grants are commensurate with peer practices and shareholder interests. Given the advisory nature, shareholders seeking change should engage with the Company or vote accordingly, as the Board may nonetheless adjust practices in response to substantial shareholder opposition.