DEF 14A of Alto Ingredients, Inc.
Filed Apr 30, 2026 · FY20250001213900-26-050384
Compensation of Directors
Compensation of Directors We use a combination of cash and equity-based incentive compensation to attract and retain qualified candidates to serve on our Board. In setting the compensation of directors, we consider the significant amount of time that Board members spend fulfilling their duties to Alto Ingredients as well as the experience level we require to serve on our Board. The Board, through its Compensation Committee, annually reviews the compensation and compensation policies for Board members. In recommending director compensation, the Compensation Committee is guided by the following three goals:
Compensation of Directors
| ● | compensation should pay directors fairly for work required in a company of our size and scope; |
Compensation of Directors
| ● | compensation should align directors’ interests with the long-term interests of our stockholders; and |
Compensation of Directors
| ● | the structure of the compensation should be clearly disclosed to our stockholders. |
Compensation of Directors
In prior years, when making compensation decisions for our non-employee directors, the Compensation Committee considered market data developed by its independent compensation consultant, including historical survey information obtained regarding cash and equity compensation paid to directors of companies with revenue and market capitalization broadly comparable to ours. For our most recent fiscal year, the Compensation Committee did not update or rely on new market data, nor did it conduct new benchmarking or establish a new peer group for purposes of setting director compensation. Considering our current financial profile, the Compensation Committee believes it is not appropriate to make significant increases to director compensation levels until we demonstrate sustained financial performance and achieve a stronger balance sheet with reduced leverage. Accordingly, for the most recent year the Compensation Committee focused primarily on our overall financial and operational performance, the responsibilities and time commitments of our directors, and our desire to maintain a conservative compensation posture, rather than on market benchmarks. Cash Compensation Our annual cash compensation program for directors includes the following:
Compensation of Directors
| ● | annual cash compensation provided to the Chairman of our Board is $112,500; |
Compensation of Directors
| ● | base annual cash compensation provided to our non-employee directors, other than our Chairman, is $75,000; |
Compensation of Directors
| ● | additional annual cash compensation provided to each of our Board committee chairs is $25,000; and |
Compensation of Directors
| ● | additional annual cash compensation provided to our lead independent director, if applicable, is $12,000. |
Compensation of Directors
These amounts are paid in advance in bi-weekly installments. In addition, directors are reimbursed for specified reasonable and documented expenses in connection with attendance at meetings of our Board and its committees. An employee director does not receive director compensation in connection with his or her service as a director. In lieu of cash compensation, directors may elect to receive additional equity compensation having the same cash value. Equity Compensation Our Compensation Committee or our full Board typically grants equity compensation to our newly elected or reelected directors which normally vests as to 100% of the grants at the earlier of our next annual meeting or approximately one year after the grant date. Vesting is typically subject to continued service on our Board during the full year. In determining the amount of equity compensation for 2025, the Compensation Committee first approved a target value of total compensation for our non-employee directors that is consistent with our conservative compensation posture and does not reflect significant increases from prior levels. The Committee then determined the cash component of director compensation within this overall target, and allocated the remaining portion of the target value to equity awards. The number of shares to be granted to our directors was based on the estimated value of the underlying shares on the expected grant date. Our annual equity compensation program for directors includes the following:
Compensation of Directors
| ● | the value of annual equity compensation provided to the Chairman of our Board is $147,500; and |
Compensation of Directors
| ● | the value of annual equity compensation provided to all other non-employee directors is $110,000. |
Compensation of Directors
In addition, our Compensation Committee may grant, and has from time to time granted, additional equity compensation to directors at its discretion. Compensation of Employee Directors Mr. McGregor was compensated as a full-time employee and officer and therefore received no additional compensation for service as a Board member during 2025. Information regarding the compensation awarded to Mr. McGregor is included in “Executive Compensation and Related Information – Summary Compensation Table” below. Director Compensation Table – 2025 The following table summarizes the compensation of our non-employee directors for the year ended December 31, 2025:
Compensation of Directors
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($)(3) | | Gilbert E. Nathan(4) | $106,346 | $61,949 | $168,295 | | Dianne S. Nury(5) | $100,000 | $46,199 | $146,199 | | Maria G. Gray(6) | $100,000 | $46,199 | $146,199 | | Alan R. Tank(7) | $38,077 | $46,199 | $84,276 | | Jeremy T. Bezdek(8) | $29,423 | $46,199 | $75,622 | | Douglas L. Kieta(9) | $55,385 | $— | $55,385 | | Michael D. Kandris(9) | $36,923 | $— | $36,923 |
Compensation of Directors
| (1) For a description of annual director fees and fees for chair and lead independent director positions, see the disclosure above under “Compensation of Directors – Cash Compensation.” |
Compensation of Directors
| (2) The amounts shown in the “Stock Awards” column represent the aggregate grant date fair value of stock awards granted in 2025, computed in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Stock Compensation. See “Note 14 – Stock-Based Compensation” of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of the relevant valuation assumptions. |
Compensation of Directors
| (3) The value of perquisites and other personal benefits was less than $10,000 in aggregate for each director. |
Compensation of Directors
| (4) At December 31, 2025, Mr. Nathan held 204,887 vested shares from stock awards. Mr. Nathan was granted 49,166 shares of our common stock on July 9, 2025, having an aggregate grant date fair value of $61,949, calculated based on the fair market value of our common stock on the grant date. The shares vest on the earlier of the date of our Annual Meeting or July 1, 2026. |
Compensation of Directors
| (5) At December 31, 2025, Ms. Nury held 180,744 vested shares from stock awards. Ms. Nury was granted 36,666 shares of our common stock on July 9, 2025, having an aggregate grant date fair value of $46,199, calculated based on the fair market value of our common stock on the grant date. The shares vest on the earlier of the date of our Annual Meeting or July 1, 2026. |
Compensation of Directors
| (6) At December 31, 2025, Ms. Gray held 113,958 vested shares from stock awards. Ms. Gray was granted 36,666 shares of our common stock on July 9, 2025, having an aggregate grant date fair value of $46,199, calculated based on the fair market value of our common stock on the grant date. The shares vest on the earlier of the date of our Annual Meeting or July 1, 2026. |
Compensation of Directors
| (7) At December 31, 2025, Mr. Tank held no vested shares from stock awards. Mr. Tank was granted 36,666 shares of our common stock on July 9, 2025, having an aggregate grant date fair value of $46,199, calculated based on the fair market value of our common stock on the grant date. The shares vest on the earlier of the date of our Annual Meeting or July 1, 2026. |
Compensation of Directors
| (8) Mr. Bezdek resigned as a director on November 24, 2025. Mr. Bezdek was granted 36,666 shares of our common stock on July 9, 2025, having an aggregate grant date fair value of $46,199, calculated based on the fair market value of our common stock on the grant date. The award was forfeited upon his resignation prior to vesting. |
Compensation of Directors
| (9) Messrs. Kieta and Kandris ceased serving on our board on June 25, 2025, the date of our prior annual meeting. |
Compensation of Directors
Indemnification of Directors and Officers Section 145 of the Delaware General Corporation Law permits a corporation to indemnify its directors and officers against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with a pending or completed action, suit or proceeding if the officer or director acted in good faith and in a manner the officer or director reasonably believed to be in the best interests of the corporation. Our certificate of incorporation provides that, except in certain specified instances, our directors shall not be personally liable to us or our stockholders for monetary damages for breach of their fiduciary duty as directors, except liability for the following:
Compensation of Directors
| ● | any breach of their duty of loyalty to Alto Ingredients or our stockholders; |
Compensation of Directors
| ● | acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
Compensation of Directors
| ● | unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; and |
Compensation of Directors
| ● | any transaction from which the director derived an improper personal benefit. |
Compensation of Directors
In addition, our certificate of incorporation and bylaws obligate us to indemnify our directors and officers, to the fullest extent permitted by the Delaware General Corporation Law, against expenses and other amounts reasonably incurred in connection with any proceeding arising from the fact that such person is or was an agent of ours or is or was serving at our request as a director, officer, employee or agent of another entity or enterprise. Our bylaws also authorize us to purchase and maintain insurance on behalf of any of our directors or officers against any liability asserted against that person in that capacity, whether or not we would have the power to indemnify that person under the provisions of the Delaware General Corporation Law. We have entered and expect to continue to enter into agreements to indemnify our directors and officers as determined by our Board. These agreements provide for indemnification of related expenses including attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe that these bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain directors’ and officers’ liability insurance. The limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (“Securities Act”), may be permitted to our directors, officers and controlling persons under the foregoing provisions of our certificate of incorporation or bylaws, or otherwise, we have been informed that in the opinion of the Securities and Exchange Commission, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
ADVISORY VOTE ON EXECUTIVE COMPENSATION
The 2026 Plan allows us to promote greater ownership by officers, non-employee directors, employees, and consultants in order to align their interests more closely with the interests of our stockholders. Stockholder approval of the 2026 Plan will also enable us to grant awards under the 2026 Plan that are designed to qualify for special tax treatment under Section 422 of the Internal Revenue Code. The 2026 Plan will become effective on the date it is approved by our stockholders. If our stockholders do not approve the 2026 Plan at the Annual Meeting, it will not become effective and no awards will be granted under the 2026 Plan, and, because our Prior Plan is no longer available for new awards, we will not have a stockholder-approved equity incentive plan under which we can make new equity awards (although awards previously granted under the Prior Plan will remain outstanding in accordance with their terms). Set forth below is information concerning awards of restricted stock and options under our Prior Plan for each of the years ended December 31, 2021, 2022, 2023, 2024 and 2025, as well as the three-year average for the years 2023, 2024 and 2025 (“Three-Year Average”). No other equity incentive compensation, whether under the Prior Plan or otherwise, was awarded in such years.
Key Features
| ● | Limitation on terms of stock options and stock appreciation rights. The maximum term of each stock option and stock appreciation right (“SAR”) is 10 years. |
Key Features
| ● | No repricing or grant of discounted stock options or SARs. The 2026 Plan does not permit the repricing of stock options or SARs either by amending an existing award or by substituting a new award at a lower price. The 2026 Plan prohibits the granting of stock options or SARs with an exercise price less than the fair market value of a share on the date of grant. |
Key Features
| ● | No automatic single-trigger acceleration, “liberal” change in control definition, or excise tax gross-ups. Under the 2026 Plan, except for awards granted to our non-employee directors, we do not automatically accelerate vesting of awards in connection with a change in control of the Company unless such awards are not assumed, converted or replaced. The 2026 Plan does not include a “liberal” change in control definition. We do not provide change in control excise tax gross-ups. |
Key Features
| ● | Dividends. We will not pay dividends or dividend equivalents on stock options, SARs or on other unearned awards (both time-vesting and performance-vesting). |
Types of Awards
| ● | Stock Options. Stock options entitle the holder to purchase a specified number of shares at a specified price (the exercise price), subject to the terms and conditions of the stock option grant. Our Compensation Committee may grant either incentive stock options, which must comply with Section 422 of the Internal Revenue Code, or nonqualified stock options. Our Compensation Committee sets the exercise prices and terms, except that stock options must be granted with an exercise price not less than 100% of the fair market value of a share on the date of grant (excluding stock options granted in connection with assuming or substituting stock options in acquisition transactions). Unless our Compensation Committee determines otherwise, fair market value means, as of a given date, the closing or last price of a share reported on Nasdaq the trading day immediately preceding the given date (or the trading day immediately preceding the given date if the given date is not a trading day). The fair market value of a share reported on Nasdaq as of April 28, 2026 was $5.28. At the time of grant, our Compensation Committee determines the terms and conditions of stock options, including the quantity, exercise price, vesting periods, term (which cannot exceed 10 years), and other conditions on exercise. |
Types of Awards
| ● | Stock Appreciation Rights (SARs). Our Compensation Committee may grant SARs, as a right in tandem with the number of shares underlying stock options granted under the 2026 Plan or as a freestanding award. Upon exercise, SARs entitle the holder to receive payment per share in stock or cash, or in a combination of stock and cash, equal to the excess of the share’s fair market value on the date of exercise over the grant price of the SAR. The grant price of a tandem SAR usually is equal to the exercise price of the related stock option and the grant price for a freestanding SAR is determined by our Compensation Committee in accordance with the procedures described above for stock options. The term of a freestanding SAR cannot exceed 10 years, and the term of a tandem SAR cannot exceed the term of the related stock option. |
Types of Awards
| ● | Restricted Stock, Restricted Stock Units, and Other Stock-Based Awards. Our Compensation Committee may grant awards of restricted stock, which are shares subject to specified restrictions, and restricted stock units, which represent the right to receive shares in the future. These awards may be made subject to repurchase, forfeiture or vesting restrictions at our Compensation Committee’s discretion. The restrictions may be based on continuous service with our Company or the attainment of specified performance goals, as determined by our Compensation Committee. Stock units may be paid in stock or cash, as determined by the Committee. Our Compensation Committee may also grant other types of equity or equity-based awards subject to the terms of the 2026 Plan and any other terms and conditions determined by the Committee. |
Stockholder Rights, Dividends and Dividend Equivalents
Stockholder Rights, Dividends and Dividend Equivalents Holders of restricted stock will have rights as stockholders, including dividend and voting rights. Unless otherwise stated in the award agreement, holders of restricted stock units will have no stockholder rights, including no dividend, dividend equivalent or voting rights. In no event will dividends or dividend equivalents vest or otherwise be paid out prior to the time that the underlying award (or portion thereof) vests for both time-vesting and performance-vesting awards, and no dividends or dividend equivalents will be credited for awards of stock options or SARs.
Minimum Vesting Requirements
Minimum Vesting Requirements While our Compensation Committee generally may set the terms and conditions of awards, the 2026 Plan requires that share-settled awards may not vest earlier than the first anniversary of the date the award is granted. This requirement does not apply to (1) substitute awards, (2) shares delivered in lieu of fully vested cash awards or (3) awards to non-employee directors that vest on the earlier of the one-year anniversary of the date of grant or the next annual meeting of stockholders (but not sooner than 50 weeks after the grant date). Also, our Compensation Committee may grant share-settled awards without regard to the minimum vesting requirement with respect to a maximum of five percent of the available share reserve authorized for issuance under the 2026 Plan. In addition, the minimum vesting requirement does not apply to our Compensation Committee’s discretion to provide for accelerated exercisability or vesting of any award, including in cases of retirement, death, disability, or a change in control, in the terms of the award or otherwise.
No Repricing
No Repricing Without stockholder approval, our Compensation Committee is not authorized to (1) lower the exercise or grant price of a stock option or SAR after it is granted, except in connection with certain adjustments to our corporate or capital structure permitted by the 2026 Plan, such as stock splits, (2) take any other action that is treated as a repricing under generally accepted accounting principles, or (3) cancel a stock option or SAR at a time when its exercise or grant price exceeds the fair market value of the underlying stock, in exchange for cash, another stock option or SAR, restricted stock, restricted stock units, or other equity award unless the cancellation and exchange occur in connection with a change in capitalization or other similar change.
Corporate Transactions and Change in Control
Corporate Transactions and Change in Control Unless otherwise provided for in the award agreement, if we are a party to a merger, reorganization, consolidation, statutory share exchange, sale of all or substantially all of our assets, or the acquisition of assets or stock of another entity by us, or other corporate transaction involving us or any of our subsidiaries, outstanding awards will be subject to the agreement governing the transaction. Upon a change in control, all outstanding awards held by non-employee directors will accelerate and vest in full, with performance-based awards vesting at target. For awards granted to any other service providers, awards that are not assumed, converted or replaced will accelerate and vest in full (except performance-based awards) and awards that are assumed, converted or replaced will accelerate and vest in full (except performance-based awards) if the grantee’s employment is terminated by us without “cause” or the grantee resigns for “good reason” (each as defined in the award agreement) within two years following the change in control. Performance-based awards vest pro rata pursuant to the foregoing at the greater of target or actual performance. “Change in control” is defined under the 2026 Plan and generally means the occurrence of any of the following events:
Corporate Transactions and Change in Control
| ● | A person or group acquires more than 50% of our voting stock, subject to certain limitations; |
Corporate Transactions and Change in Control
| ● | The incumbent Board ceases for any reason to constitute at least a majority of the Board; |
Corporate Transactions and Change in Control
| ● | Consummation of a reorganization, merger, statutory share exchange, consolidation, sale of all or substantially all of our assets, or the acquisition of assets or stock of another entity by us, unless our stockholders continue to hold more than 50% of the voting power of the resulting entity, no person or group holds more than 50% of the voting power of the resulting entity and a majority of the members of the board of directors of the resulting entity were members of our Board; or |
Corporate Transactions and Change in Control
| ● | Our stockholders give approval of our complete liquidation or dissolution. |
Federal Income Tax Information
| ● | Nonqualified Stock Options. A grantee generally will not recognize taxable income upon the grant or vesting of a nonqualified stock option with an exercise price at least equal to the fair market value of our shares on the date of grant and no additional deferral feature. Upon the exercise of a nonqualified stock option, a grantee generally will recognize compensation taxable as ordinary income in an amount equal to the difference between the fair market value of the shares underlying the stock option on the date of exercise and the exercise price of the stock option. When a grantee sells the shares, the grantee will have short-term or long-term capital gain or loss, as the case may be, equal to the difference between the amount the grantee received from the sale and the tax basis of the shares sold. The tax basis of the shares generally will be equal to the greater of the fair market value of the shares on the exercise date or the exercise price of the stock option. |
Federal Income Tax Information
| ● | Incentive Stock Options. A grantee generally will not recognize taxable income upon the grant or vesting of an incentive stock option. If a grantee exercises an incentive stock option during employment or within three months after employment ends (twelve months in the case of permanent and total disability or death), the grantee will not recognize taxable income at the time of exercise for regular U.S. federal income tax purposes (although the grantee generally will have taxable income for alternative minimum tax purposes at that time). If a grantee sells or otherwise disposes of the shares acquired upon exercise of an incentive stock option after the later of (1) one year from the date the grantee exercised the option, and (2) two years from the grant date of the stock option, the grantee generally will recognize long-term capital gain or loss equal to the difference between the amount the grantee received in the disposition and the exercise price of the stock option. If a grantee sells or otherwise disposes of shares acquired upon exercise of an incentive stock option before these holding period requirements are satisfied, the disposition will constitute a “disqualifying disposition,” and the grantee generally will recognize taxable ordinary income in the year of disposition equal to the excess of the fair market value of the shares on the date of exercise over the exercise price of the stock option (or, if less, the excess of the amount realized on the disposition of the shares over the exercise price of the stock option). The balance of the grantee’s gain on a disqualifying disposition, if any, will be taxed as short-term or long-term capital gain, as the case may be. |
Federal Income Tax Information
| ● | Restricted Stock Awards, Restricted Stock Units, and Performance Awards. A grantee generally will not have taxable income upon the grant of restricted stock, restricted stock units or performance awards. Instead, the grantee will recognize ordinary income at the time of vesting or payout equal to the fair market value (on the vesting or payout date) of the shares or cash received minus any amount paid. For restricted stock only, a grantee may instead elect to be taxed at the time of grant. |
Audit Committee Report
| (1) Amount represents the “target” incentive award share payout under the performance-based portion of our long-term equity incentive compensation plan. The amount that may be earned is based on our attainment of preestablished performance goals selected by our Compensation Committee and is additionally subject to time-based vesting. A maximum incentive award payout of 1,186,304 shares may be issuable under incentive awards under the performance-based portion of our long-term equity incentive compensation plan. | | (2) The weighted-average exercise price does not account for the awards reflected in the table and described in footnote 1 above. | | (3) Our Prior Plan terminated effective March 25, 2026 and no new awards will be granted thereunder. |
Executive Summary
| ● | annual cash incentive compensation; and |
Executive Summary
| ● | long-term equity incentive compensation. |
Executive Summary
The 2025 compensation information in this Proxy Statement includes actual results for 2025 under our annual cash incentive compensation plan. Our annual cash incentive compensation plan payouts for 2025 were determined and made in March 2026. Payouts were made in respect of the financial and key performance indicator, or KPI, performance elements of our annual cash incentive compensation plan because our Adjusted EBITDA of $44,651,000 exceeded the minimum Adjusted EBITDA threshold for 2025 of $2,000,000 and we achieved five of our eight KPI goals at or above threshold levels for 2025. Our NEOs also performed well in their execution of a number of other initiatives in 2025, as noted in the 2025 business highlights summarized above and their individual accomplishments noted below, and consequently, our NEOs each received target payouts under the individual performance element of the plan. See “– Individual NEO Compensation Targets and Results” below.
Compensation Governance Practices
| ● | Retention through long-term equity awards. We employ long-term equity awards through grants of restricted stock that vest in the future. These equity awards are designed to aid in our retention of key personnel in important positions and align the interests of our executive officers with those of our stockholders. As noted above, we continued a performance-based equity incentive compensation plan, first instituted in 2024, the awards under which are also subject to long-term time-based vesting. |
Compensation Governance Practices
| ● | Long and minimum vesting periods. Our time-vested equity awards to our NEOs generally vest in annual installments over a three-year period with an initial minimum vesting period of one year. |
Compensation Governance Practices
| ● | Executive stock holding policy. We have adopted an executive stock holding policy to better align executive compensation with our long-term interests and those of our stockholders and to address the time horizon of risks. |
Compensation Governance Practices
| ● | Linkage of annual cash incentive compensation plan to company performance. Our annual cash incentive compensation plan links a majority of targeted and potential payouts to our financial and KPI performance. The 2025 performance measures for the compensation pool for our annual cash incentive compensation plan were: |
Compensation Governance Practices
| o | Financial Performance. Adjusted EBITDA is the financial performance measure we selected for the financial component of our annual cash incentive compensation plan, which we weighted at 50% for our NEOs. |
Compensation Governance Practices
| o | KPI Performance. As discussed below, we selected various KPIs as performance measures for the KPI component of our annual cash incentive compensation plan, which we weighted at 30% for our NEOs. |
Compensation Governance Practices
| ● | Perquisites. We do not currently offer our NEOs any significant perquisites, other than certain travel perquisites or those offered to our employees generally. Our executive officers are not guaranteed any retirement or pension benefits or any non-qualified deferred compensation plans. Instead, we offer our NEOs the opportunity to accumulate assets through their equity awards and the appreciation of their equity awards and offer the opportunity to participate in our 401(k) plan and a health savings account plan on the same basis as our other employees. |
Compensation Governance Practices
| ● | Independent compensation consultant. Our independent compensation consultant is retained directly by our Compensation Committee. |
Compensation Governance Practices
| ● | No option re-pricing. Our equity incentive plan does not permit options or stock appreciation rights to be repriced to a lower exercise price without the approval of our stockholders, except in connection with certain changes to our capital structure. |
Executive Compensation Program and Processes
| ● | our compensation consultant is hired by the Compensation Committee and reports directly to the Compensation Committee; and |
Executive Compensation Program and Processes
| ● | our compensation consultant has a broad base of clients, which reduces reliance on any specific account for achieving its business goals. |
Executive Compensation Program and Processes
| ● | annual cash incentive compensation; and |
Executive Compensation Program and Processes
| ● | long-term equity incentive compensation. |
Executive Compensation Program and Processes
In addition, our executive compensation program also includes indirect compensation in the form of standard employee benefits, limited perquisites and other executive benefits, and severance and change-in-control benefits. Our executive compensation program also allows for special discretionary cash or equity awards to address specific individual or other circumstances not fully addressed by the three principal elements of our executive compensation program. In making compensation decisions, our Compensation Committee exercises its judgment on the overall level of compensation provided by this total compensation package as well as the mix of the three principal elements of compensation. Base Salary Our Compensation Committee reviews the base salary levels of our executive officers annually and makes such adjustments as it deems appropriate after considering the officer’s level and scope of responsibility and experience, company and individual performance, internal pay equity considerations, and in some years, competitive market data. Annual Cash Incentive Compensation Annual cash incentive compensation for key employees, including our NEOs, consists of cash awards under our short-term incentive plan. We have an annual cash incentive compensation plan applicable to all executive officers. Participants are eligible for annual cash incentive compensation based upon the attainment of pre-established goals. Awards under the plan for 2025 were based on three elements: company financial performance as measured by our Adjusted EBITDA, company KPIs and the NEO’s individual performance. Our Compensation Committee believes that these elements will best incentivize our executive officers to attain our short- and long-term financial and other business goals. The 2025 payout structure under our annual cash incentive compensation plan for our NEOs is set forth below:
Executive Compensation Program and Processes
| Target ($)x | Performance Factor | = | Overall Payout | | ● Target $ = % of base salary ● NEO Target %: ➢ CEO: 80% ➢ Other NEOs: 60% | ● Financial performance: ➢ 50% weight ➢ Min/max payout for Adjusted EBITDA: 0%/200% of target ● KPI performance: ➢ 30% weight ➢ Min/max payout: 0%/200% of target ● Individual performance: ➢ 20% weight ➢ Min/max payout: 0%/100% of target | | ● Minimum payout: 0% of target ● Target Payout: 100% of target ● Maximum payout: 180% of target |
Executive Compensation Program and Processes
The Compensation Committee approves equity awards for our NEOs in connection with the annual review of their individual performance and overall compensation. The annual awards are typically made near the end of the first quarter and represent a majority of the shares granted for the year under our long-term equity incentive compensation plan. Each time-vested award is designed primarily as a retention tool, typically requiring the executive to remain with Alto Ingredients for at least one year after the date of grant to receive the benefit of one-third of the award on partial vesting and at least three years to receive the full benefit of the award on full vesting. We believe our equity incentive compensation aligns the interests of our NEOs with those of our stockholders and provides each NEO with a significant incentive to manage our company from the perspective of an owner with an equity stake in the business by tying significant portions of the recipients’ compensation to the market price of our common stock. Time-vested awards of restricted stock typically vest annually over a three-year period of continued service measured from the grant date. Each time-vested award of restricted stock will provide a return to the NEO only to the extent he or she remains employed with us during the partial or full vesting period. For our 2025 performance-based equity incentive compensation plan, performance-based awards will provide a return only to the extent we satisfy the minimum financial performance criteria and the NEO satisfies the applicable time-based vesting requirements. In making long-term equity incentive awards, our Compensation Committee sets a target value for the award for each executive officer based on its judgment about the factors used in setting executive officer total compensation described under “Compensation Philosophy and Objectives” above as well as our Compensation Committee’s judgment regarding the desired mix of base salary, annual cash incentives and long-term equity incentives. Our Compensation Committee also considers outstanding vested and unvested equity awards to executive officers, the stock ownership levels of executive officers and the potential dilutive effect on our stockholders. For annual grants, once our Compensation Committee determines the target value of a recipient’s long-term equity incentive award, we establish the specific number of shares subject to the award by dividing the target value of the equity grant by the closing price of a share of our common stock on March 15th or a higher price determined appropriate under the circumstances by our Compensation Committee. Grants typically occur later during our annual compensation decision-making cycle. We chose the date of March 15th to avoid the appearance of market-timing and because it is a consistent date year-to-year. However, the number of shares granted multiplied by the closing price of a share of our common stock on the date of grant is the valuation model we use for our financial statements determined in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Stock Compensation. For this reason, the long-term equity incentive compensation target amounts for our NEOs differ from the actual amounts reflected in the “Stock Awards” column in the Summary Compensation Table below. See “Individual NEO Compensation Targets and Results” and “Summary Compensation Table” below. Performance-Based Equity Incentive Compensation Plan Our Compensation Committee adopted a performance-based equity incentive compensation plan to be administered initially under our 2016 Stock Incentive Plan. The compensation program applies to our executive officers and is designed to tie certain equity incentive compensation to our financial performance. Under the compensation program, the Compensation Committee may grant awards to our executive officers. The awards consist of performance-based grants of restricted stock that vest upon the attainment of predetermined financial targets and are additionally subject to time-based vesting. Our Compensation Committee selected the financial performance measure of Adjusted EBITDA ROA to determine payouts under the program. The Compensation Committee has the discretion to define and determine Adjusted EBITDA ROA. The Compensation Committee currently defines Adjusted EBITDA the same as under our annual cash incentive compensation plan. Adjusted EBITDA ROA is calculated as (1) Adjusted EBITDA, divided by (2) average gross fixed assets after deducting construction in progress and capitalized interest. We will determine Adjusted EBITDA for each calendar month and average gross fixed assets after deducting construction in progress and capitalized interest as of the end of each calendar month. The sum of the Adjusted EBITDA ROA for the twelve calendar months will represent annual Adjusted EBITDA ROA. Our long-term equity incentive compensation plan for 2025 was comprised of 50% of these performance-based equity incentive awards and 50% of time-vested equity incentive awards. The Compensation Committee expects to make additional grants under the program in future years and anticipates maintaining the proportion of awards at 50% performance-based equity incentive awards and 50% time-vested equity incentive awards. March 2024 Awards For 2024, the Compensation Committee established Adjusted EBITDA ROA amounts at threshold, target and maximum values, which would determine the amount of any payouts of restricted stock depending on the levels attained. There would be no payout under the compensation program if the threshold Adjusted EBITDA ROA was not attained. If Adjusted EBITDA ROA fell between established levels, the amount of any payouts of restricted stock would be calculated on a straight-line basis and determined based on where Adjusted EBITDA ROA falls between the two values, but in all cases, subject to the minimum threshold. On March 20, 2024, we made the following awards under our performance-based equity incentive compensation plan that may be paid out in the following amounts of restricted stock to our executive officers in consideration of services to be provided and based on the attainment of Adjusted EBITDA ROA amounts for 2024, 2025 and 2026.
Executive Compensation Program and Processes
Of the amounts set forth above, 33% of the executive officer’s award is eligible to be earned for 2026, 33% of the executive officer’s award is eligible to be earned for 2027 and 34% of the executive officer’s award is eligible to be earned for 2028, in each case based on the attainment of a minimum Adjusted EBITDA ROA threshold, and subject to the executive officer’s continued service through the time-based vesting period that ends in early 2029. The Adjusted EBITDA ROA threshold and amounts for 2026 are set forth below. Adjusted EBITDA ROA Amounts Our Compensation Committee established the following Adjusted EBITDA ROA levels for 2025 and 2026 and will establish in the future the Adjusted EBITDA ROA levels for 2027 and 2028. Year Ending December 31, 2025
Executive Compensation Program and Processes
| Performance-Based LTI | Threshold | Target | Maximum | | Adjusted EBITDA | $5,000,000 | $25,000,000 | $50,000,000 | | 2025 Adjusted EBITDA ROA | 1.05% | 5.26% | 10.53% | | % of Target Shares Earned | 20.00% | 100.00% | 200.00% |
Executive Compensation Program and Processes
| Performance-Based LTI | Threshold | Target | Maximum | | Adjusted EBITDA | $5,000,000 | $33,000,000 | $66,000,000 | | 2026 Adjusted EBITDA ROA | 1.04% | 6.85% | 13.69% | | % of Target Shares Earned | 15.15% | 100.00% | 200.00% |
Executive Compensation Program and Processes
If Adjusted EBITDA ROA falls between the established levels, the amount of any payouts of restricted stock will be calculated on a straight-line basis and determined based on where Adjusted EBITDA ROA falls between the two values, but in all cases, subject to the minimum threshold. Timing of Stock Option and other Equity Awards We do not currently utilize stock options, SARs or similar option-like instruments as part of our equity incentive award program for our NEOs. Accordingly, our long-term equity incentive awards to NEOs currently take the form of restricted stock units and/or performance-based equity awards. Although we do not have a separate written policy that specifically addresses the timing of stock option, SAR or similar option-like awards to our NEOs, we do not grant these awards, or any other form of equity compensation, in anticipation of the release of material nonpublic information. Similarly, we do not time the release of material nonpublic information based on equity award grant dates for the purpose of affecting the value of any NEO award. As discussed above, for annual grants of equity incentive compensation, once our Compensation Committee determines the target value of a recipient’s long-term equity incentive award, we establish the number of shares subject to the award by dividing the target value of the equity grant by the closing price of a share of our common stock on March 15 (or a higher price determined appropriate under the circumstances by our Compensation Committee). Annual equity awards are typically approved later during our annual compensation decision-making cycle at a regularly scheduled meeting of the Compensation Committee. We selected March 15 as the valuation date to avoid the appearance of market timing and because it is a consistent date year to year. During 2025, none of our NEOs were granted options to purchase shares of our common stock, SARs or similar option-like instruments. Other Compensation and Benefits We do not currently offer retirement or pension benefits or any non-qualified deferred compensation plans. Instead, we provide our NEOs with the opportunity to accumulate retirement income primarily through a defined contribution plan and through the appreciation of the value of their equity awards. Consistent with our pay-for-performance compensation philosophy, we do not provide our executive officers with any significant perquisites, other than certain travel perquisites or those offered to our employees generally. Except as noted below, our NEOs are eligible to participate in the following employee benefit programs on the same basis as all other regular employees: 401(k) Plan. Each of our NEOs and other salaried employees are eligible to participate in a defined contribution plan qualified under Internal Revenue Code Section 401(k). In 2025, we contributed $1.00 for each $1.00 of employee contributions, up to a maximum contribution of 6.0% of the participant’s eligible compensation, and subject to a maximum matching contribution of $21,000. Our contributions to the accounts of the NEOs are included in the “All Other Compensation” column in the Summary Compensation Table below. Group Life, Health and Disability Plans. We have established group life, health and disability plans for our employees. The NEOs may participate in these plans on the same basis as other employees. Perquisites and Other Benefits. We furnish a limited number of perquisites to our NEOs, of which only travel-related perquisites, if any, and those benefits offered to our employees generally are provided. In accordance with Securities and Exchange Commission rules, the components of “All Other Compensation” are separately identified in the footnotes where required, including where total perquisites for a particular NEO exceed $10,000.
Compensation Decisions for 2025
Compensation Decisions for 2025 Our Compensation Committee established compensation for our NEOs in 2025 in a manner consistent with our executive compensation philosophy and objectives. See “– Compensation Philosophy and Objectives” above. Our Compensation Committee made its annual compensation decisions for 2025 in March 2025 and March 2026. Our Compensation Committee’s decisions were based upon its judgment about our financial and other business performance for 2024, expected and actual financial and other business performance for 2025, and the positions, scope and importance of the roles of our NEOs and how their positions compared to other Alto Ingredients executive officers and personnel. The Compensation Committee also considered certain other factors such as budget constraints and executive officer recommendations. Through these efforts, our Compensation Committee established a desired level and mix of total compensation. Total Compensation Our Compensation Committee previously targeted total compensation for our NEOs to be competitive with similarly situated personnel at approximately the 50th percentile relative to peer group companies based on historical data provided by our compensation consultant. However, for 2025, our Compensation Committee did not benchmark compensation. Our Compensation Committee believes that meaningful changes in executive compensation should follow, and not precede, sustained financial success and a stronger balance sheet with reduced leverage. Accordingly, our Compensation Committee focused primarily on our financial and operational performance and individual executive performance, while maintaining a conservative compensation posture rather than on market benchmarks. In doing so, the Compensation Committee instituted limited salary increases and continued to focus on performance-based compensation. In 2024, our Compensation Committee conducted a thorough evaluation and redesign of our incentive compensation program for our NEOs which underscores our Compensation Committee’s steadfast dedication to aligning executive compensation with our financial results and in accordance with our pay-for-performance philosophy. Starting in 2024 and continuing through 2025, this redesign included:
Compensation Decisions for 2025
| ● | an increase in STI targets from 70% to 80% for our CEO and from 50% to 60% for our other NEOs; |
Compensation Decisions for 2025
| ● | a new performance-based STI element based on KPIs; and |
Compensation Decisions for 2025
| ● | a reduction in time-vested LTI compensation targets and an increase in performance-based LTI compensation targets. |
Compensation Decisions for 2025
Base Salary Our Compensation Committee increased our executive officers’ base salaries by 2.0% in 2025. Annual Cash Incentive Compensation Our Compensation Committee targeted 2025 annual cash incentive compensation at 80% of base salary for our President and Chief Executive Officer and at 60% of base salary for each of our Chief Operating Officer, Chief Financial Officer, Chief Legal Officer and Secretary, and Chief Commercial Officer. As discussed above, awards under our annual cash incentive compensation plan for 2025 were based on three elements: company financial performance, company KPI performance and the NEO’s individual performance. For 2025, our Compensation Committee weighted for each of our NEOs, company financial performance at 50%, company KPI performance at 30% and individual NEO performance at 20%. In doing so, our Compensation Committee desired to incentivize most heavily activities intended to lead to strong overall financial performance while still rewarding individual performance efforts. Financial Performance Our Compensation Committee established our 2025 financial performance element under our annual cash incentive plan using our financial projections determined early in the year. Those projections were viewed as attainable but challenging and were used as the Compensation Committee’s internal planning reference point for sizing the 2025 annual cash incentive opportunity. Payout under the financial performance element was non-discretionary and ranged from 0% to 200% of a participant’s targeted payout amount, based on our actual Adjusted EBITDA for 2025, with the underlying bonus pool for the financial performance element funded at 5% of our Adjusted EBITDA for 2025, subject to a minimum Adjusted EBITDA threshold of $2,000,000 and a maximum payout cap. Our internal Adjusted EBITDA projections for 2025 reflected a lower level of expected performance than our internal Adjusted EBITDA goal of $40,000,000 for 2024. We reduced our internal expectations for 2025 due to a multi-year history of not meeting our internal Adjusted EBITDA goals in challenging market conditions and a belief that prior-years’ goals may have been too aspirational. Notably, our internal expectations for 2025 were well above our actual Adjusted EBITDA for 2024. Our Compensation Committee approved a sliding scale of achievement and payout opportunities under which lower actual Adjusted EBITDA for 2025 corresponded to lower levels of goal achievement and lower payouts, subject to the minimum Adjusted EBITDA threshold; and higher actual Adjusted EBITDA for 2025 corresponded to higher levels of goal achievement and higher payouts, subject to a maximum payout, with the amount available for the financial performance element determined by the 5%-of-Adjusted EBITDA funding formula described above. The Compensation Committee initially sized for 2025 a targeted payout amount of $3,667,000 based on our internal Adjusted EBITDA projections for 2025, assuming that we achieved our KPI goals at target and all personnel covered by the plan attained all of their individual performance goals. The targeted payout amount of $3,667,000 was comprised of $1,666,000 attributable to financial performance, $537,000 attributable to company KPI performance and $1,464,000 attributable to individual performance. The Compensation Committee established for 2025 a maximum aggregate plan pool of $5,869,000 comprised of $3,332,000 attributable to financial performance, $1,073,000 attributable to company KPI performance and $1,464,000 attributable to individual performance. Because the financial performance element was funded at 5% of Adjusted EBITDA, the targeted and maximum pools of $1,666,000 and $3,332,000 for the financial performance element correspond to effective Adjusted EBITDA levels of $33,000,000 (for a 100% target payout of the financial performance element) and $66,000,000 (for a 200% maximum payout of the financial performance element). These amounts reflected a preliminary estimate of the at-target pool and were subsequently adjusted at the time of payout to reflect the then-eligible employee population, resulting in an actual at-target company-wide financial component of $1,712,000. In setting the initial targeted and maximum plan payout amounts, the Compensation Committee assumed that all eligible plan participants would continue their eligibility through 2025 and until final payment of amounts earned under the plan. In addition, in setting these initial targeted and maximum plan payout amounts, the Compensation Committee did not build in any additional capacity in the plan pool for potential new eligible plan participants. The $2,202,000 difference between the maximum aggregate plan pool of $5,869,000 and the targeted payout amount of $3,667,000 represented the additional aggregate opportunity available at higher levels of performance under the plan. Under the 5%-of-Adjusted EBITDA funding formula, the maximum financial performance pool of $3,332,000 corresponds to an effective Adjusted EBITDA level of approximately $66,000,000. We had to attain minimum Adjusted EBITDA of $2,000,000 for 2025 to result in any payout under the financial performance element. This feature was intended to assure that we achieved an acceptable minimum level of financial performance before annual cash incentives would be paid to any participant, including our NEOs, under the financial performance element of the plan. For 2025, we achieved Adjusted EBITDA of $44,651,000. The payout under the financial performance element was calculated by multiplying this Adjusted EBITDA by 5%, which resulted in a preliminary financial performance pool of approximately $2,232,000, and dividing that amount by the actual calculated company-wide financial component at target, based on the eligible employees at the time of payout, of $1,712,000. Under this 5%-of-Adjusted EBITDA funding formula, this level of performance resulted in funding of the financial performance element at approximately 130% of target for our NEOs. KPI Performance The threshold, targeted and maximum payout amounts for the KPI performance element were $268,000, $537,000 and $1,073,000, respectively. These amounts correspond to 50%, 100%, and 200% of the target KPI pool. We had to attain a minimum of three of our eight KPIs at threshold levels to result in any payout under the KPI performance element. As with our financial performance element, this feature was intended to assure that we achieved an acceptable minimum level of KPI performance before annual cash incentives would be paid to any participant, including our NEOs, under the KPI performance element of the plan. As an additional limitation, if we did not attain minimum Adjusted EBITDA of $2,000,000 for 2025, our NEOs could not receive more than 100% of targeted payout amounts for the company KPI performance element even if we achieved more than four of our eight KPI goals. For 2025, the payout levels for the KPI performance element were as follows:
Compensation Decisions for 2025
| KPI Goals Achieved | Payout % | | Two or fewer | 0% | | Three | 50% | | Four (target) | 100% | | Five | 125% | | Six | 150% | | Seven | 175% | | Eight | 200% |
Compensation Decisions for 2025
| ● | achievement of five of our eight KPIs at or above threshold levels, which corresponded to a 125% payout factor for the KPI performance element; and |
Compensation Decisions for 2025
| ● | full attainment by our NEOs of their respective individual performance goals under our annual cash incentive compensation plan. |
Compensation Decisions for 2025
| ○ | initiated a strategic technical review of our corn wet mill and distillery at our Pekin Campus to support long-term site competitiveness and capital allocation priorities; |
Compensation Decisions for 2025
| ○ | oversaw new annual metric targets for the STI and LTI components of our executive compensation program; |
Compensation Decisions for 2025
| | | | Change | | | Bryon T. McGregor | 2025 | 2024 | Dollars | Percent | | Base Salary* | $556,920 | $546,000 | $10,920 | 2.0% | | Annual Cash Incentive Compensation | | | | | | Target Percent of Base Salary | 80.0% | 80.0% | | —% | | Target Dollars | $445,536 | $436,800 | $8,736 | 2.0% | | Long-Term Equity Incentive Compensation | | | | | | Target Percent of Base Salary | 167.5% | 170.9% | | (2.0)% | | Target Dollars | $933,000 | $933,000 | $— | —% | | Target Total Direct Compensation | $1,935,456 | $1,915,800 | $19,656 | 1.0% |
Compensation Decisions for 2025
| | | | Change | | | Todd E. Benton | 2025 | 2024 | Dollars | Percent | | Base Salary* | $357,000 | $350,000 | $7,000 | 2.0% | | Annual Cash Incentive Compensation | | | | | | Target Percent of Base Salary | 60.0% | 60.0% | | —% | | Target Dollars | $214,200 | $210,000 | $4,200 | 2.0% | | Long-Term Equity Incentive Compensation | | | | | | Target Percent of Base Salary | 93.3% | 95.1% | | (1.9)% | | Target Dollars | $333,000 | $333,000 | $— | —% | | Target Total Direct Compensation | $904,200 | $893,000 | $11,200 | 1.3% |
Compensation Decisions for 2025
| | | | Change | | | Robert R. Olander | 2025 | 2024 | Dollars | Percent | | Base Salary* | $370,260 | $363,000 | $7,260 | 2.0% | | Annual Cash Incentive Compensation | | | | | | Target Percent of Base Salary | 60.0% | 60.0% | | —% | | Target Dollars | $222,156 | $217,800 | $4,356 | 2.0% | | Long-Term Equity Incentive Compensation | | | | | | Target Percent of Base Salary | 89.9% | 91.7% | | (2.0)% | | Target Dollars | $333,000 | $333,000 | $— | —% | | Target Total Direct Compensation | $925,416 | $913,800 | $11,616 | 1.3% |
Compensation Decisions for 2025
| | | | Change | | | Auste M. Graham | 2025 | 2024 | Dollars | Percent | | Base Salary* | $371,280 | $364,000 | $7,280 | 2.0% | | Annual Cash Incentive Compensation | | | | | | Target Percent of Base Salary | 60.0% | 60.0% | | —% | | Target Dollars | $222,768 | $218,400 | $4,368 | 2.0% | | Long-Term Equity Incentive Compensation | | | | | | Target Percent of Base Salary | 77.3% | 78.8% | | (1.9)% | | Target Dollars | $287,000 | $287,000 | $— | —% | | Target Total Direct Compensation | $881,048 | $869,400 | $11,648 | 1.3% |
Compensation Decisions for 2025
| | | | Change | | | James R. Sneed | 2025 | 2024 | Dollars | Percent | | Base Salary* | $369,838 | $362,586 | $7,252 | 2.0% | | Annual Cash Incentive Compensation | | | | | | Target Percent of Base Salary | 60.0% | 60.0% | | —% | | Target Dollars | $221,903 | $217,552 | $4,351 | 2.0% | | Long-Term Equity Incentive Compensation | | | | | | Target Percent of Base Salary | 77.6% | 79.2% | | (2.0)% | | Target Dollars | $287,000 | $287,000 | $— | —% | | Target Total Direct Compensation | $878,741 | $867,138 | $11,603 | 1.3% |
COMPENSATION COMMITTEE REPORT
| ● | the mix and balance of base salary, annual cash incentive compensation and long-term equity incentive compensation, with an emphasis on long-term equity incentive compensation that increases along with our executives’ respective levels of responsibility; |
COMPENSATION COMMITTEE REPORT
| ● | a long-term equity incentive compensation plan under which grants of restricted stock are made, which is intended to mitigate the risk of actions intended to capture short-term stock appreciation at the expense of sustainable total stockholder return over the longer-term; |
COMPENSATION COMMITTEE REPORT
| ● | vesting of a significant portion of long-term equity incentive awards tied to financial performance; |
COMPENSATION COMMITTEE REPORT
| ● | vesting of long-term equity incentive awards over multiple years; |
COMPENSATION COMMITTEE REPORT
| ● | caps on annual cash incentive compensation; |
COMPENSATION COMMITTEE REPORT
| ● | broad performance ranges for minimum, target and maximum financial performance goals with, after the minimum financial performance goals are attained, continuous increments for annual cash incentive compensation that reduce the risk of accelerating or delaying revenue or expense recognition to satisfy the next tier for larger incentive payouts; |
COMPENSATION COMMITTEE REPORT
| ● | we use Adjusted EBITDA as the financial performance measure for our annual cash incentive compensation plan, which accounts for controllable factors such as attaining higher margins through managing production volumes relative to both specialty alcohol and essential ingredient sales prices and production input costs, increasing production efficiencies, controlling operating costs such as selling, general and administrative expenses, and successfully implementing capital improvement projects that increase Adjusted EBITDA; and |
COMPENSATION COMMITTEE REPORT
| ● | the KPI performance measures we utilize under our annual cash incentive compensation plan, which take into account controllable factors such operational efficiency. |
COMPENSATION COMMITTEE REPORT
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation(3) | Total ($) | | Bryon T. McGregor(4) | 2025 | $553,980 | $— | $354,540(5) | $545,800 | $22,900 | $1,477,220 | | President and Chief | 2024 | $537,115 | $— | $615,760(6) | $87,360 | $22,500 | $1,262,735 | | Executive Officer | 2023 | $427,346 | $— | $846,000 | $62,756(7) | $21,400 | $1,357,502 | | Todd E. Benton(8) | 2025 | $355,115 | $5,000(9) | $126,540(10) | $262,400 | $22,900 | $771,955 | | Chief Operating Officer | 2024 | $331,103 | $— | $219,760(11) | $36,000 | $22,500 | $609,363 | | | 2023 | $270,737 | $— | $56,250 | $24,400 | $19,256 | $370,643 | | Robert R. Olander(12) | 2025 | $368,305 | $— | $126,540(10) | $272,100 | $22,900 | $789,845 | | Chief Financial Officer | 2024 | $354,231 | $— | $219,760(11) | $43,560 | $22,500 | $640,051 | | | 2023 | $292,843 | $— | $313,065 | $27,974(13) | $21,387 | $655,269 | | Auste M. Graham | 2025 | $369,320 | $— | $109,062(14) | $272,900 | $21,000 | $772,282 | | Chief Legal Officer and Secretary | 2024 | $360,769 | $— | $189,407(15) | $43,680 | $20,700 | $614,556 | | | 2023 | $346,154 | $— | $161,250 | $35,000 | $19,800 | $562,204 | | James R. Sneed | 2025 | $367,885 | $— | $109,062(14) | $271,800 | $22,900 | $771,647 | | Chief Commercial Officer | 2024 | $349,479 | $— | $189,407(15) | $43,510 | $22,500 | $604,896 | | | 2023 | $329,409 | $— | $161,250 | $32,941 | $21,400 | $545,000 |
COMPENSATION COMMITTEE REPORT
| (2) The dollar amounts reported in columns (c) represent the respective amounts of “compensation actually paid” to Messrs. McGregor and Kandris, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Messrs. McGregor and Kandris during the applicable year. |
COMPENSATION COMMITTEE REPORT
| (c) The amounts included in this column are the amounts reported, if any, in the “Change in Pension and Nonqualified Deferred Compensation” column of the Summary Compensation Table for each applicable year. There were no such amounts for any applicable year, therefore we have excluded the “Change in Pension and Nonqualified Deferred Compensation” column from the Summary Compensation Table. |
COMPENSATION COMMITTEE REPORT
| (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Messrs. McGregor and Kandris for the applicable years during which they served as our PEO), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group during the applicable year (excluding Messrs. McGregor and Kandris for the applicable years during which they served as our PEO). In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Messrs. McGregor and Kandris for the applicable years during which they served as our PEO) for each year to determine the compensation actually paid to them, using the same methodology described above in Note 2: |
COMPENSATION COMMITTEE REPORT
| ● | Adjusted EBITDA ROA to link executive compensation actually paid to our NEOs to our performance through performance-based equity incentive awards. |
Neil M. Koehler
Neil M. Koehler Neil M. Koehler is a holder of more than 5% of a class of our voting securities through his ownership of our Series B Preferred Stock. On May 20, 2008, we sold to Mr. Koehler, 256,410 shares of our Series B Preferred Stock, all of which were initially convertible into an aggregate of 7,326 shares of our common stock based on an initial preferred-to-common stock conversion ratio of approximately 1-for-0.03, and warrants to purchase an aggregate of 3,663 shares of our common stock at a split-adjusted exercise price of $735 per share, for an aggregate purchase price of $5,000,000. As a result of various anti-dilution adjustments, the preferred-to-common conversion ratio of the Series B Preferred Stock has increased to approximately 1-for-1.06. For the years ended December 31, 2025 and 2024, we accrued and paid cash dividends in the amount of $350,000 and $350,958, respectively, attributable to shares of Series B Preferred Stock held by Mr. Koehler. For the three months ended March 31, 2026, we accrued and paid cash dividends in the amount of $86,301 attributable to shares of Series B Preferred Stock held by Mr. Koehler.