Ideal Power Inc

This advisory proposal asks shareholders to approve, on a non-binding basis, the compensation paid to the Company’s named executive officers as disclosed in the proxy statement, including tables and narrative disclosure. Management is seeking shareholder approval to affirm its executive compensation design — which consists of base salary, cash bonuses tied to performance goals, and equity awards (restricted stock units and performance stock units) — as a means to align executive interests with long-term stockholder value and to support retention and recruitment. The Compensation Committee and Board emphasize that equity and performance-based awards are intended to link pay to Company performance and to incentivize achievement of operating and stock-price related goals; the proxy also discloses that the 2025 CEO inducement grants materially increased reported compensation for that year. The proposal is advisory and non-binding, but the Board states it values stockholder feedback and will consider the vote’s outcome when making future compensation decisions. Contextually, the pay-versus-performance tables and narrative highlight that inducement awards and timing of grants affected alignment metrics in recent years, which could be a point of focus for investors evaluating the program. From a governance perspective, a strong affirmative vote would validate the Committee’s approach and facilitate continuity in the Company’s incentive practices; a weak vote would put pressure on the Compensation Committee to revisit target-setting, mix of cash versus equity, or the use/timing of large inducement grants. The Board recommends a “FOR” vote, arguing the program is designed to reward achievement and retain key talent while mitigating excessive risk through Committee oversight. Investors should weigh the benefits of retention and performance incentives against dilution and the one‑time impact of inducement grants when assessing the merits of the proposal.

This management proposal asks shareholders to approve an amendment and restatement of the Company’s 2013 Equity Incentive Plan that principally increases the share reserve by 800,000 shares and incorporates anti-repricing protections and other technical changes, extending the plan term to June 3, 2036. Management and the Compensation Committee argue the increase is necessary to preserve an adequate supply of equity awards for recruiting, retention and incentive purposes given that, as of March 31, 2026, only 81,274 shares remained available under the plan while nearly 969,440 shares were subject to outstanding awards (at target) and an additional 494,786 shares were subject to inducement awards granted outside the plan. The proposal is designed to maintain the Company’s ability to issue restricted stock units, performance stock units and options that tie executive and employee pay to long-term stockholder outcomes, which the Board contends is aligned with shareholder interests. Importantly, the A&R 2013 Plan includes governance enhancements that prohibit repricing of options without shareholder approval and limits repurchases/cancellations absent shareholder consent (except in certain corporate transactions), which mitigates some investor concerns about opportunistic option resets. From a dilution standpoint, approval would increase potential overhang and dilution at a time when outstanding awards and recent inducement grants are already meaningful; the Board acknowledges this but asserts that the requested increase and current burn rate are reasonable relative to industry norms. For investors, the core trade-off is between enabling management to continue granting equity incentives to motivate and retain talent — especially following a CEO transition and inducement grants — and limiting incremental dilution and potential misalignment from large awards. Because the amendment contains anti-repricing protections and formalizes plan governance, a vote in favor signals shareholder support for the Compensation Committee’s approach; a vote against could restrict the Company’s flexibility to grant equity incentives and could force management to seek alternative (likely cash) compensation. The Board unanimously recommends a “FOR” vote, emphasizing that failure to approve the A&R 2013 Plan could impair the Company’s ability to attract and retain key personnel necessary to execute its business strategy.