Mitek Systems Inc

This non-binding resolution asks shareholders to approve the overall compensation of Mitek’s named executive officers as disclosed in the proxy. Management frames the vote as a referendum on the design and effectiveness of its pay program, which combines base salary, at-risk annual cash incentives tied to revenue and adjusted EBITDA (50/50) and long-term equity awards (PSUs and RSUs), and emphasizes steps taken after the 2025 say-on-pay (which received ~58% support) to address shareholder concerns. Those actions included increasing the weighting of at-risk performance pay for the new CEO, shifting the annual incentive metric from non-GAAP operating income to adjusted EBITDA, rebalancing revenue/EBITDA weighting to 50/50, eliminating the PSU “earn-back” feature, increasing maximum PSU payout potential, and moving fiscal 2026 PSUs to a single three-year rTSR period. The company also granted heavy performance-based equity to its new CEO and COO to align pay with long-term value creation. The board recommends a FOR vote arguing these changes improve alignment with shareholder interests and retention. Critics could still point to significant equity value granted to new hires (e.g., CEO $8M target) and dilution from equity grants, but management highlights investor engagement and iterative program changes as mitigation. As an advisory vote, the outcome is non-binding but the board and human capital committee state they will consider the result when making future compensation decisions, so a negative vote could trigger additional design or disclosure changes. Overall, this proposal is a conventional say-on-pay item that tests investor support for recent compensation policy changes and executive hiring packages and provides a governance signal to the board.

This proposal asks shareholders to approve an amendment and restatement of Mitek’s ESPP to add an additional 1,000,000 shares to the plan (bringing the total authorized under the amended plan to 2,000,000) and to extend the term so the company can continue offering the program. Management’s rationale is retention and alignment: broad-based ESPPs are presented as an important employee benefit that encourages ownership and helps attract and retain talent. The Amended ESPP uses an 85% purchase-price discount on the lower of the offering-period start or end price and features consecutive, overlapping 24‑month offering periods with semi‑annual exercise dates. Company disclosures show the current reserve is nearly exhausted (only 6,020 shares available as of January 16, 2026) and historical participation has been meaningful, so without approval the benefit would terminate for most employees. From a governance perspective the plan is structured to comply with Section 423 of the Code and includes customary limits (15% payroll deduction cap, 2,000-share per exercise limit and $25,000 annual ISO‑style limit). The potential downside for existing shareholders is dilution: management estimates the additional authorized shares will incrementally dilute share count and the program increases share overhang, although the board frames this as necessary to support recruitment, retention and employee alignment. Vote mechanics: approval requires a majority of votes cast. The board’s unanimous recommendation FOR reflects management’s view that the program’s talent and retention benefits outweigh incremental dilution, particularly given the plan’s broad participation and customary safeguards.

This management proposal seeks shareholder approval to increase the 2020 Incentive Plan’s share reserve by 4.1 million shares (to an initial pool of 13,779,079 shares, plus returned shares from prior plans) to support ongoing equity grants used for hiring, retention and performance incentives. Management argues equity awards are central to its compensation philosophy—used broadly across the company—and that the requested increase represents roughly two years of expected grant activity under historical usage assumptions. The company discloses key equity metrics (value-adjusted burn rates ~3.7% in FY2025 and an overhang of ~17%) and estimates the proposed increase would dilute shares by an incremental ~9.1% on a fully diluted basis based on outstanding shares as of the record date; these are material considerations for investors assessing long-term dilution. The Second A&R 2020 Plan incorporates several governance best-practices in its design — including a $350,000 annual limit on non-employee director compensation, prohibition on discounted options and repricing without shareholder approval, clawback provisions, a one‑year minimum vesting rule (with limited exceptions for up to 5% of the reserve and for substitute awards and certain director grants), no evergreen feature and other transfer restrictions — which management highlights to mitigate dilution and governance risk. The compensation committee’s recent large grants to new executives (CEO and COO) illustrate the practical need for additional shares but also raise scrutiny about the size and timing of inducement awards. Approval requires a majority vote; a FOR vote supports management’s ability to continue broad-based equity compensation, while a vote against would constrain the company’s flexibility to grant equity to recruit and retain talent and could force more cash compensation or more limited equity usage. In evaluating the proposal, sophisticated investors will weigh the company’s talent needs and alignment benefits against the magnitude of potential dilution and the reasonableness of grant sizing and governance protections.