Neuronetics Inc

This proposal asks shareholders to cast a non-binding advisory vote to approve the 2025 compensation of the Company’s Named Executive Officers. Management is seeking this advisory endorsement to validate its pay practices and to demonstrate alignment between executive incentives and the Company’s operational and financial objectives. The Company’s compensation program for 2025 used a mix of base salary, annual cash incentives tied to revenue, EBIT and individual goals, and long-term equity awards including time-based RSUs and performance-based RSUs (PRSUs) tied to cash balance and cash flow breakeven objectives. The board emphasizes governance safeguards—such as clawback policy, stock ownership guidelines, pre-clearance and trading windows, and a significant portion of pay being “at-risk”—to justify the program. Notably, some performance-based awards’ outcomes were affected by external financing and the Compensation Committee exercised discretion regarding vesting where appropriate, reflecting active committee oversight. The vote is advisory and non-binding, but the Board and Compensation Committee state they will consider shareholder feedback in future compensation decisions. Approval would signal shareholder support for the Company’s pay-for-performance approach and its use of equity incentives to retain management during strategic transitions (including integration of Greenbrook). A negative vote would likely trigger additional engagement and potential design changes by the Compensation Committee to better align pay with shareholder expectations and to address any concerns about discretion or dilution. Given the Company’s emphasis on retention, transitional leadership changes (CEO retirement and new CEO appointment), and recent use of performance metrics tied to cash outcomes, the advisory vote serves as a governance checkpoint on whether the market supports the committee’s approach.

This management proposal requests shareholder approval to adopt the Neuronetics, Inc. 2026 Equity Incentive Plan as the successor vehicle for all future equity grants. Management seeks approval to preserve the Company’s ability to attract, retain, and motivate employees, consultants and non-employee directors by ensuring an adequate share reserve (5,780,542 shares initially, representing the available reserve under the 2018 Plan) and an annual evergreen increase equal to 4% of shares outstanding on each January 1 from 2027 through 2036. The plan will supersede the 2018 Plan for new grants while leaving outstanding awards under the 2018 Plan governed by their existing terms. Board rationale emphasizes competitiveness and continuity of equity compensation programs—particularly given growth and strategic initiatives such as the Greenbrook acquisition and expected workforce expansion. The filing discloses that management monitors dilution through metrics (burn rate and overhang) and argues the requested reserve size and annual increases are reasonable in light of historical usage (burn rates of 5.10% in 2023, 7.47% in 2024 and 4.62% in 2025) and a stable overhang (about 16–19% range). Key governance features include committee administration, minimum six-month vesting (with certain exceptions), limits on annual grants to non-employee directors, clawback provisions, and customary change-in-control and recapture provisions. Risks for shareholders include potential dilution from the evergreen provision and future grants; management addresses this by committing to oversight of share usage and explaining the need to remain competitive. If approved, the plan enables broader use of performance-based and time-based awards to align pay with strategy; a rejection would constrain future equity grants and could limit the Company’s flexibility to retain and incentivize talent. The Board recommends a FOR vote, concluding that the plan balances retention needs with measures intended to mitigate excessive dilution.