Holley Inc

This management proposal asks shareholders to cast a non-binding advisory vote approving the compensation paid to Holley’s named executive officers for fiscal year 2025 as disclosed in the proxy statement. Management notes this is the first year the company is presenting a say-on-pay proposal after exiting emerging growth company status, and the Compensation and Talent Committee and the Board believe the program was aligned with company performance and stockholder value. The vote is advisory only; however, the Board and Compensation Committee state they will review and consider the voting results when making future compensation decisions. The proposal is broad and not a vote on any single element of pay, rather the overall compensation program, which includes base salary, annual cash incentives linked to adjusted EBITDA targets, and long-term equity awards including RSUs and PSUs tied to multi-year performance and stock price metrics. For investors assessing governance, the Board’s recommendation and the fact that the company implemented PSUs and other performance-linked awards is relevant evidence of pay-for-performance design, while the sizable inducement and retention awards disclosed for the CEO and other NEOs may raise dilution and retention-benefit questions. The non-binding nature means even a negative vote would not directly change awards but would signal stockholder dissatisfaction and could lead the Board to modify program features, disclosure, or targets. Given Holley’s recent transition to a full reporting company, this vote functions as an important governance feedback mechanism; management seeks approval to validate its compensation philosophy and to preserve continuity in incentive programs tied to strategic objectives. Analysts should weigh the disclosed pay levels and realized pay (pay actually earned/paid) relative to company TSR and net income trends disclosed elsewhere in the proxy when evaluating whether the compensation program is credibly linked to stockholder value creation.

This management proposal asks shareholders, on a non-binding basis, to select the preferred frequency (one, two, or three years) for future advisory say-on-pay votes; the Board recommends an annual vote. The Board’s rationale is that an annual frequency provides shareholders regular and timely opportunities to express views on executive pay, which helps inform compensation decisions year-to-year. From a governance perspective, annual votes are the most responsive to evolving business performance and pay outcomes, and they are commonly recommended where the Board seeks frequent engagement signals. Opponents sometimes argue that less frequent votes (e.g., triennial) reduce administrative burden and allow longer-term compensation cycles to play out; proponents counter that regular feedback disciplines pay design and fosters alignment. Because the proposal is advisory, management will consider voting outcomes in future decisions but is not bound by them; however, stockholder sentiment can materially influence compensation policy and board practices. Analysts should consider the company’s cadence of disclosure, the structure of long-term incentives (e.g., multi-year PSUs and performance metrics), and recent pay-for-performance alignment when judging whether annual votes are likely to change compensation outcomes or governance behavior. The company's recommendation for annual votes is consistent with its stated desire to maintain ongoing stockholder engagement and to enable regular assessment of the executive compensation program relative to performance.

This management proposal asks shareholders to approve an amendment to the company's 2021 Omnibus Incentive Plan to increase the share reserve by 5,000,000 shares (from 8,850,000 to 13,850,000). Management explains the increase is necessary because the existing reserve is insufficient to support the intended annual equity grants to employees and non-employee directors, including RSUs and PSUs used for retention, inducement, and performance-based incentives. The Board argues that expanding the reserve promotes ownership among employees and directors and aligns their interests with stockholders while allowing the company to remain competitive in attracting and retaining talent. The Amended Plan contains several investor-friendly features highlighted by management — no repricing without stockholder approval, prohibition on discounted options, maximum ten-year option terms, clawback/recoupment subject to company policy, double-trigger vesting for awards assumed in change-in-control transactions, and no automatic grants or tax gross-ups — which management cites to mitigate common dilution and governance concerns. The filing notes NYSE rules require shareholder approval for reserve increases; management is therefore seeking shareholder authorization to comply with listing rules and ensure the plan is effective. From a financial perspective, the amendment will increase potential dilution; analysts should examine the company’s disclosed burn rate (2.8% for 2025), outstanding RSUs/PSUs (including large CEO inducement awards) and projected granularity of future grants when modeling dilution and EPS impact. Although management emphasizes governance safeguards and performance-based elements, stockholders may still weigh incremental dilution, the size and timing of large CEO/inducement awards, and whether the company’s historical equity grant pacing and retention needs justify the requested increase. The Board recommends a FOR vote, noting the plan’s design and governance controls as mitigating factors to support long-term alignment with stockholder interests.