Natures Sunshine Products Inc

This proposal asks shareholders to cast a non-binding advisory vote (a "say-on-pay" vote) to approve the compensation of the Company's named executive officers as disclosed in the proxy statement. Management is seeking this vote to obtain shareholder feedback on the Company's pay practices, demonstrate alignment between pay and performance, and satisfy SEC disclosure and governance norms; the Board intends to consider the outcome when setting future compensation. The material disclosures include base salaries, annual cash incentive metrics tied to revenue and adjusted EBITDA, long-term equity awards (RSUs and performance-based RSUs tied to adjusted EBITDA and relative TSR), and severance/change-in-control arrangements. The Compensation Committee uses market benchmarking, peer comparisons, and advice from an external consultant (F.W. Cook) to set pay, and the Company describes multiple governance safeguards—stock ownership guidelines, clawback policy, and compensation committee oversight—intended to mitigate excessive risk-taking. Although advisory, the Board frames the vote as an important signal and has committed to annual say-on-pay votes; management reports the 2025 say-on-pay previously received 78% support and used that result to maintain current compensation structures. The proposal is not binding, so even if it fails the Board retains discretion over future pay but would be expected to engage with dissenting shareholders. Key risks to shareholders include potential misalignment from generous new-hire awards and severance protections that could be viewed as outsized; conversely, the plan's mix of performance-based and time-based equity and clear performance metrics provide alignment incentives. Overall, the Board recommends FOR, arguing that the disclosed program is competitive, performance-linked, and necessary to attract and retain executives while aligning management interests with long-term shareholder value.

This management proposal requests shareholder approval of a new equity incentive plan reserving 1,500,000 shares (the 2026 Plan) to replace previously expired equity plans and to provide the company the ability to grant options, RSUs, PRSUs, and other equity awards to employees, officers, consultants and non-employee directors. Management seeks approval to maintain an ongoing equity program used to recruit, retain, and motivate talent globally; the proxy states that without approval the Company would have no approved plan for new grants, which the Board believes would harm recruiting and retention. The Plan includes governance features (Compensation Committee administration, specified annual limits for non-employee director compensation, anti-repricing protections, and discretionary performance metrics) designed to constrain dilution and align awards with performance, and it folds into the share reserve any forfeited or expired shares from prior plans subject to certain limitations. The proxy discloses the Company’s three-year burn-rate history, fully-diluted overhang implications (increasing overhang to ~14.5% if approved), and proposed anti-dilution adjustments, which are material considerations for shareholder dilution and accounting expense. The Board’s recommendation emphasizes that the Plan supports long-term shareholder value by linking awards to performance goals (adjusted EBITDA, TSR and other metrics) and by maintaining market-competitive compensation tools; it also notes the potential negative — increased dilution and possible shareholder overhang — if broadly used. From a governance perspective, the Plan permits broad discretion by the Compensation Committee in setting award terms but retains limits that require shareholder approval for material changes, which may mitigate some governance risk. Investors evaluating the proposal should weigh the trade-off between dilution and the company’s need to incentivize management around disclosed financial metrics; the Board argues that the 1.5 million share reserve is calibrated to prior usage and the Company's talent needs. The Board unanimously recommends voting FOR the Plan because management believes it is essential to attract and retain key personnel and to align incentives with long-term performance.