Owlet Inc

This proposal asks stockholders to cast a non-binding advisory vote to approve the overall 2025 compensation of Owlet’s named executive officers (NEOs) as disclosed in the proxy statement, including salary, cash bonuses, time-based RSUs and multi-year performance-based RSUs (PRSUs). Management is seeking this advisory endorsement to validate its pay-for-performance design and to confirm that equity and incentive structures appropriately align executive interests with long-term stockholder value. The vote is purely advisory and does not change pay arrangements, but the Compensation Committee has committed to consider stockholder feedback in future pay decisions. Contextually, 2025 compensation included one-time transition payments, annual bonuses tied to EBITDA results, and substantial PRSU awards tied to multi-year cumulative net revenue goals; the company also experienced executive leadership transitions during the year which influenced specific award and payout treatments. The Board recommends approval, arguing the program attracts and retains senior talent while conserving cash through equity-based incentives and linking payouts to measurable performance. Opponents might point to potential dilution from large equity grants, the pro-rata or accelerated vesting of awards during leadership changes, or the fact that advisory votes are non-binding and therefore less effective. The company presents detailed disclosure on grant sizes, burn rate (6.57% for 2025; three-year average 8.96%), overhang and the rationale for award design to help investors evaluate the proposal. Given the Board’s unanimous recommendation and the Compensation Committee oversight, the proposal is likely framed as a governance checkpoint rather than a contractual change. Stockholder support would signal endorsement of management’s compensation philosophy; a significant vote against could prompt the Compensation Committee to reassess program design and disclosure.

This management proposal gives stockholders a non-binding choice among holding future advisory votes on executive compensation every one, two or three years, commonly referred to as the “say-on-frequency” vote. The Board and Compensation Committee recommend a one-year frequency, arguing executive pay is reviewed and adjusted annually and that yearly input allows shareholders to provide timely feedback on compensation policies and practices. The vote is advisory and non-binding; however, the Board will consider the outcome when setting future policy. The company frames the recommendation around its annual compensation-setting process and the desire for regular stockholder engagement, noting that more frequent votes permit faster corrective responses to any material shareholder concerns. Opposing views from some investors often favor triennial votes to reduce administrative costs and proxy solicitation burdens; proponents argue annual votes strengthen accountability. The proxy makes clear the Board’s rationale (annual reviews and responsiveness to shareholder sentiment) while acknowledging stockholders may have differing views. If a majority selects a frequency other than annual, the Board will treat that result as the non-binding preference of the stockholders and consider it in future governance decisions. Given the advisory nature, this proposal affects process and cadence rather than contractual terms or compensation amounts.

This proposal requests stockholder approval to amend the Company’s 2021 Incentive Award Plan by adding 600,000 shares to the plan’s reserve, increasing the pool available for stock options, RSUs, PRSUs and other equity and cash-based awards. Management argues the increase is needed to attract, recruit, motivate and retain high-quality employees, non-employee directors and consultants in a competitive labor market and to continue aligning compensation with long-term shareholder value via equity. The proxy provides quantitative context: 2025 grants included 1,585,885 RSUs, a 2025 burn rate of 6.57%, a three-year average burn rate of 8.96%, and a pro-forma overhang of 14.75% assuming the amendment—numbers management says are reasonable given hiring and market conditions. The amendment’s text (Appendix A) expressly increases the Plan’s share reserve by 600,000 shares and is conditioned on stockholder approval; if not approved, the reserve will revert to the prior amounts. The Company’s Compensation Committee will administer grants but the Plan permits broad administrator discretion (including, notably, the ability to reprice or exchange underwater options in certain circumstances without further stockholder approval), a governance feature investors may scrutinize as it can increase dilution risk and reduce stockholder protections. Approval requires a majority of votes cast and, because of certificate-of-designation provisions, separate affirmative Series A and Series B preferred stock votes; management emphasizes equity grant programs are essential to conserve cash and link pay to performance. From a governance standpoint, investors will weigh the business need for additional shares against potential dilution and the Plan’s repricing flexibility; strong disclosure of expected hiring and grant pacing can mitigate dilution concerns.