Arq Inc

This proposal requests a non-binding advisory vote to approve the disclosed compensation of the named executive officers (NEOs). Management frames the vote as a check on its executive pay practices and notes that the Compensation Committee will consider the vote outcome when setting future pay; thus, the proposal is a governance signal rather than a legally binding change. The Company’s compensation program is structured with a mix of base salary, a Short-Term Incentive Plan (STIP) tied to operational metrics and a Long-Term Incentive Plan (LTIP) made up of restricted stock and performance stock units (PSUs) tied to relative TSR, emphasizing long-term, performance-based pay. The proxy discloses that the 2025 STIP delivered little payout due to performance (approx. 12.72% of targets achieved) and that PSUs have historically been the main vehicle aligning management with shareholder returns. Management highlights past strong shareholder support (approximately 97% for the 2025 say-on-pay) to justify continuity in its approach. From a stockholder perspective, the key evaluation points are whether the performance metrics are rigorous, whether pay outcomes are aligned with realized shareholder returns and risk, and whether incentive structures avoid encouraging excessive short-term risk-taking. A sophisticated analyst should note that the company leans heavily on equity and TSR-linked PSUs, which align pay and long-term value creation but also depend on peer-group selection and TSR volatility. Given management’s explicit commitment to consider the advisory vote outcome and the disclosed governance features of the compensation program, the Board recommends a FOR vote while stockholders should assess metric design, payout opportunity, and historical pay-for-performance outcomes.

This proposal seeks shareholder approval to adopt the Arq 2026 Omnibus Incentive Plan with a reserve of 1,500,000 shares, which would replace the existing 2024 Plan if approved. Management requests the authority to grant a broad range of equity- and cash-based awards (NSOs, ISOs, SARs, restricted stock, RSUs, PSUs and other awards) to employees, directors and consultants to support retention and performance incentives. The filing explains that the current 2024 Plan has approximately 998,538 shares available as of April 14, 2026, which management views as insufficient to cover anticipated awards; the requested reserve is projected to cover roughly 2–3 years at historical grant levels given a three-year average burn rate of ~2.56%. Key plan features include governance protections: a minimum one-year vesting requirement (except for up to 5% of the reserve), no discounted repricing of options or SARs without shareholder approval, caps on director compensation, clawback provisions, no evergreen provision, and administration by independent directors. The program permits PSUs tied to relative TSR and other performance metrics that align payouts with long-term shareholder returns, but dilution and peer-group selection risks remain material considerations. Management argues that without additional equity capacity it could be forced to increase cash compensation, which would drain cash and reduce alignment with shareholders; the Board therefore recommends a FOR vote. A sophisticated evaluation should weigh the dilution impact (1.5M shares vs. ~42.9M outstanding shares), the adequacy of anti-dilution and anti-repricing protections, historical burn rate and grant practices, and the potential pay-for-performance calibration embedded in PSU metrics.

This proposal asks shareholders to approve the Ninth Amendment to the Company’s Tax Asset Protection Plan (TAPP), which the Board says is intended to preserve the Company’s domestic tax attributes (federal NOLs and tax credits of approximately $86.1 million as of December 31, 2025) by deterring ownership changes that would trigger Section 382 limitations. The TAPP implements a rights plan (a ‘‘flip-in’’ style protective structure) that issues one preferred share purchase right per common share and generally makes the rights exercisable if a person acquires beneficial ownership of 4.99% or more (or, for pre-existing holders at that threshold, if they acquire additional shares). If exercisable, non-acquiring stockholders can buy shares at a discounted economic value upon a triggering acquisition, diluting an acquiring person’s economic stake and thereby discouraging ownership accumulations that could cause an ‘‘ownership change’’ for tax purposes. The Board argues this is a cost-effective way to protect stockholder value by preserving the ability to utilize tax assets that otherwise could be substantially limited, and the amendment extends the plan’s expiration (approval would push the Final Expiration Date to December 31, 2027; absent approval it would expire December 31, 2026). The principal countervailing concerns are that the TAPP has anti-takeover effects, may deter strategic buyers or activism that could benefit stockholders, could reduce liquidity or transaction value for sellers, and may not fully prevent an ownership change or an IRS challenge to the tax attributes. A rigorous analysis should weigh (a) the likely present value of tax attributes under plausible utilization scenarios, (b) the probability and magnitude of an ownership change absent the TAPP, and (c) transaction-market frictions or strategic costs the TAPP may create. Given the size of the asserted Tax Assets and the Board’s discretion to exempt transactions or specific holders, management recommends a FOR vote while acknowledging the legitimate trade-offs.