Spar Group Inc

This proposal asks shareholders to cast a non-binding advisory vote to approve the 2025 compensation of the Company’s Named Executive Officers as disclosed in the proxy statement. Management (through the Compensation Committee) is seeking this advisory approval to satisfy Section 14A of the Exchange Act and to solicit annual shareholder feedback on executive pay; the Company has elected to hold Say on Pay annually. The disclosed pay program includes base salary, annual performance-based cash bonuses, and long-term equity-based incentives (RSUs, PSUs, options) designed to attract and retain executives and to align management’s interests with long-term shareholder value. The Compensation Committee describes processes for setting pay—CEO recommendations, committee review, and Board approval—and links bonuses to corporate and individual performance objectives, with vesting schedules for equity awards meant to emphasize retention and long-term performance. The vote is advisory and non-binding, but a significant negative vote would trigger a review by the Compensation Committee and could lead to changes in compensation practices. Management recommends a FOR vote arguing that the program is competitive, tailored to company objectives, and consistent with governance practices; the Board likewise recommends FOR. From a governance perspective, investors should weigh the program’s mix of cash and equity, historical pay outcomes and realized pay, potential dilution from equity plans, and whether disclosure demonstrates clear performance alignment and robust committee oversight. Finally, the Company’s stated intention to continue annual advisory votes means shareholders have frequent opportunities to express views and influence future compensation design.

This management proposal asks shareholders to ratify and approve the Board’s adoption of a new 2026 Stock Compensation Plan that would authorize up to 2,000,000 shares for grants of non-qualified stock options and restricted stock units, subject to the plan’s terms and stockholder approval. Management seeks shareholder approval to re-establish an equity award program because prior plans have expired and because equity awards are a core retention and long-term incentive tool; no awards can be granted under the 2026 Plan until stockholder approval. The plan as described resets the share reserve, shortens the plan term (to May 31, 2029), removes rarely used award types and certain discretionary repricing and reload features, and adjusts default vesting schedules—changes framed to limit potential abuse while providing flexibility to reward employees, officers and directors. The Compensation Committee will administer grants (with Board approvals where required), setting vesting and exercise terms within the plan’s guardrails; the plan also contains customary adjustments for extraordinary events. The Board’s rationale emphasizes attraction and retention of talent, alignment of participants’ interests with long-term shareholder value, and continuation of an important competitive compensation mechanism. Key investor considerations include dilution risk from the 2,000,000-share reserve, the plan’s governance protections (e.g., limits on repricing), thresholds for awarding senior executives, and how the committee will use discretion in grant sizing and vesting to ensure performance alignment. Management and the Compensation Committee recommend FOR, arguing the plan balances necessary flexibility for incentive grants with safeguards and is in the Company’s and stockholders’ best interests. Approval requires a majority of votes cast; if denied, the Company cannot grant awards under the 2026 Plan and may need to rely on cash incentives or seek an alternative plan in the future.