Quest Resource Holding Corp

This non-binding advisory proposal asks stockholders to approve the 2025 compensation paid to the Company’s named executive officers as disclosed in the proxy statement. Management frames the program as designed to attract, motivate, and retain qualified executives by aligning their interests with stockholders through a mix of base salary, cash bonuses, and significant long-term equity awards (RSUs, PSUs, DSUs) tied to multi-year performance metrics. The company discloses pay-versus-performance data showing fluctuations in compensation actually paid over 2023–2025 tied to stock price movements and performance metric achievement, and it notes that some 2025 compensation included retention and promotion-related awards. Although advisory and non-binding, the Board intends to consider the vote’s outcome when setting future pay, and it has recommended a vote “FOR” on the grounds that the program promotes long-term stockholder value and alignment. Investors may use this vote to signal concerns about pay levels, design, or outcomes—particularly given the company’s recent net losses and impairment charges—so a negative outcome could prompt the Compensation Committee to revise incentive structures or disclosures. The proposal’s risk profile centers on equity-heavy compensation and performance metric calibration; the Compensation Committee discloses limits and governance safeguards (e.g., clawback policies, annual bonus plan, Committee oversight) intended to mitigate excessive risk-taking. Given the disclosed severance/change-in-control arrangements and discretionary bonus determinations, shareholders should evaluate whether incentive outcomes are sufficiently linked to sustained shareholder value and appropriately tempered by governance safeguards. In sum, the say-on-pay vote is a governance signal to the Board and Compensation Committee; management recommends support to validate its current compensation philosophy, but shareholders should weigh alignment, dilution from equity awards, and historical performance when voting.

The proposal requests shareholder approval to increase the 2024 Incentive Plan share reserve by 600,000 shares, which the formal amendment would reflect by raising the plan’s total authorized delivery amount to 2,100,000 shares. Management argues the increase is necessary to preserve the Company’s ability to grant competitive equity awards (RSUs, PSUs, DSUs and options) used for recruiting, retention, and long-term alignment of executives and employees with stockholders, and warns that failing to increase the reserve could force greater reliance on cash incentives. As of December 31, 2025 the proxy discloses 519,618 shares were available under the 2024 Incentive Plan (and 467,639 as of May 21, 2026), so the requested increase would materially expand the pool available for future grants and reduce immediate run-rate scarcity. The company discloses governance safeguards—such as limits on director grant values, Committee administration, restrictions on repricing without stockholder approval, and clawback policies—that partially mitigate concerns about uncontrolled dilution or opportunistic repricing. Key investor considerations include the dilution and potential overhang resulting from adding 600,000 shares, the projected burn-rate implied by past grants (noting large RSU/PSU grants to executives in 2025), and whether the Committee will use the additional shares primarily for long-term performance-based awards versus time-based grants. The amendment also contains customary adjustment provisions for corporate events and change-in-control acceleration mechanics; investors should evaluate how these mechanics interact with the Company’s M&A strategy and potential successor treatment. If approved, the increase would enable more equity-based compensation without immediate cash expense but could depress near-term EPS and per-share metrics; conversely, it may reduce cash compensation needs and better align management incentives with shareholder return over time. The Board’s unanimous recommendation and the Plan’s stated limits provide some governance protection, but shareholders should weigh the incremental dilution against the operational need for talent retention and the Company’s recent financial performance when deciding how to vote.

This proposal asks shareholders to increase the ESPP share reserve by 150,000 shares, taking the plan total from 250,000 to 400,000 shares, to permit additional employee purchases at the plan’s terms. The ESPP offers six-month offerings with a purchase price equal to the lower of 85% of the fair market value on the offering date or the exercise date, subject to per-employee limits ($25,000 fair-market-value-per-calendar-year cap and a maximum of 10,000 shares per offering), and is intended to broaden employee ownership among the Company’s ~191 employees. Management frames the amendment as a tool to enhance retention, morale, and alignment by allowing more employees to participate in an affordable, discounted stock purchase program; the Board unanimously recommends a “FOR” vote. Investor considerations include dilution from increasing the ESPP reserve and the 85% discount, but the program’s per-employee annual and per-offering caps limit concentration and potential excessive issuance to insiders. The company discloses that as of May 21, 2026 there were 92,689 shares available under the ESPP, so the requested increase would materially expand availability for future offerings. From a governance perspective, the ESPP is administered by the Committee with Section 423 qualification objectives, contains adjustment mechanics for corporate events, and permits employer discretion subject to statutory limits, which together provide structure and some investor protections. Overall, the amendment is presented as a relatively modest increase in potential dilution in exchange for broader employee ownership and retention benefits; shareholders should weigh the marginal dilution and discount against the participation limits and the strategic benefit of employee equity participation when voting.