Carecloud Inc

This proposal asks shareholders to cast a non-binding advisory vote to approve the disclosed compensation of the Company’s named executive officers. Management is seeking shareholder approval primarily to obtain feedback on pay practices and to satisfy the SEC’s disclosure and shareholder advisory requirements under Section 14A; the Compensation Committee has stated it will consider the outcome when designing future pay programs. The vote is advisory and not binding on the Board or the Compensation Committee, but historically such votes serve as an important governance signal about alignment of pay with company performance. CareCloud’s proxy includes a detailed Pay Versus Performance section and compensation tables that contextualize executive pay relative to net income, TSR and other metrics, which shareholders should weigh when voting. Management recommends an annual say-on-pay vote (approved by shareholders in 2023) and notes the next frequency vote will be in 2029, so this vote is a single-year advisory approval of disclosed pay. Key considerations for an analyst are the company’s disclosed CAP adjustments and any disconnect between realized pay and shareholder returns reflected in the Pay Versus Performance disclosures. Given that the Company also discusses its compensation-setting processes and the role of the Compensation Committee, a FOR vote signals shareholder acceptance of current governance and compensation practices; a withheld vote would signal concern and could prompt further engagement or changes. The Board’s recommendation to vote FOR is rooted in the Committee’s view that current programs align executive incentives with long-term shareholder interests while remaining competitive to retain key talent.

This proposal requests shareholder approval of a new equity compensation plan that would authorize up to 1,000,000 shares for issuance under the CareCloud 2026 Equity Incentive Plan, subject to traditional capitalization adjustments. Management and the Board are pursuing shareholder approval to satisfy NASDAQ listing requirements and to ensure the Company has a stock-based incentive vehicle to attract, retain and motivate employees, officers, directors and consultants. If approved, the 2026 Plan will freeze the existing Amended and Restated Equity Incentive Plan and become the primary plan for future grants; if not approved, the Company will continue under the existing plan until it expires in January 2027 or runs out of shares, at which point management warns it may need to increase cash compensation to remain competitive. The plan gives the Compensation Committee broad discretion to grant a variety of awards (options, SARs, RSUs, performance awards, etc.), set vesting and performance conditions, and interpret plan terms, which is standard but raises governance considerations about delegation and oversight. The plan also includes anti-repricing protections requiring shareholder approval to materially reprice or replace underwater options and contains limits such as a $300,000 annual award value cap for non-employee directors. From a dilution and governance perspective, analysts should evaluate the 1,000,000-share reserve relative to the current share base (42.5 million shares outstanding as of the record date) to assess potential dilution and run-rate of grants. The Board’s unanimous recommendation reflects the view that equity incentives remain necessary to align long-term shareholder interests with management and to support hiring and retention, particularly given competitive pressures in the healthcare IT and AI talent markets. Vote FOR supports management’s ability to implement equity-based incentives immediately upon approval; a vote against would constrain equity grant flexibility and potentially force higher cash compensation or other retention measures.