Clene Inc

This management proposal requests an advisory, non-binding approval of the Company’s named executive officer (NEO) compensation as disclosed under Item 402. Management frames the proposal as a routine, governance-level confirmation that the overall executive compensation program is designed to attract, retain, and motivate qualified executives and to align their interests with long-term stockholder value through a mix of base salary, annual performance-based cash bonuses, and equity-based awards under the Amended 2020 Stock Plan. The Compensation Committee has engaged an independent consultant and regularly reviews pay structures and risk; the proxy cites prior stockholder support (96.4% approval at the 2025 meeting) as evidence of alignment. A “for” vote signals investor support for pay philosophy and the Board uses the outcome as advisory input when setting future pay, though the vote is non-binding. Key considerations for an analyst: the extent to which realized pay is tied to measurable company performance (the company emphasizes equity incentives and annual performance metrics but does not use TSR as a direct compensation metric), recent cost-saving actions (50% executive pay reduction enacted in June 2025) that materially changed realized pay, and potential dilution from equity awards. Potential risks include perceptions of disconnect between pay and clinical/commercial milestones in a clinical-stage pharmaceutical company, and the advisory nature of the vote limits direct enforcement. The Board will consider the vote result in future compensation determinations; given historical strong support, management expects continued endorsement but should monitor investor concerns about dilution, pay-for-performance linkage, and severance provisions that could be material in a change-in-control scenario.

Management seeks shareholder approval to increase the Amended 2020 Stock Plan pool by 1,000,000 shares because, as of the March 25, 2026 record date, only 197,177 shares remained available under the plan while historical grant activity and projected needs would exhaust the pool within one to two years. The Board and Compensation Committee evaluated burn rate (three-year average ~9.99%), current overhang (~22.0% fully-diluted) and the post-amendment potential overhang (~26.8%) and concluded the increase is necessary to preserve the company’s ability to grant equity for retention, recruitment, and incentive purposes. The proposal is framed as a tool to align employee and director interests with stockholders through option and other equity awards and management intends to register added shares on Form S-8 if approved. From a governance perspective, analysts should weigh the benefits of maintaining an active equity program for a clinical-stage biotech (talent retention, incentivizing milestone achievement) against dilutionary effects and potential shareholder value erosion; the filing provides metrics (burn rate, outstanding awards, concentration among executives and directors) to support the requested increase. The Board notes that without approval, the company’s compensation programs could be disrupted, potentially affecting hiring and retention at a critical stage. Key risks include near-term dilution and a meaningful increase in fully-diluted share count, concentrated option holdings among insiders, and potential over-granting relative to company performance; mitigation includes the Board’s discretionary grant process, cap on option pricing (no less than fair market value), and continued oversight by an independent compensation consultant. Overall, the proposal is a typical, management-sponsored equity reserve increase justified by historical grant rates and near-term hiring/retention needs but should be assessed against dilution tolerance and future capital plans.