DEF 14A of Energy Recovery, Inc., Apr 22, 2024

DEF 14A of Energy Recovery, Inc.

Filed Apr 22, 2024 · FY20230001421517-24-000081

Open on EDGAR

  1. to receive and access future copies of the Company’s proxy statements, annual reports and

    | | Page | | Additional Information Regarding Executive Compensation | 76 | | Grants of Plan-Based Awards in 2023 | 76 | | Outstanding Equity Awards as of December 31, 2023 | 77 | | Option Exercises and Stock Vested in 2023 | 80 | | CEO Pay Ratio | 80 | | Executive Officers | 81 | | Proposal No. 3: Ratification of Appointment of Independent Registered Public Accounting Firm | 83 | | Principal Accountant Fees and Services | 83 | | Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm | 84 | | Ratification of Deloitte & Touche LLP | 84 | | Report of the Audit Committee | 85 |

  2. 2024 Director Nominees

    2024 Director Nominees

  3. 2024 Director Nominees

    | Name | Age (1) | Director Since | Principal Occupation | Independent | Roles and Committee Memberships (1) | | Alexander J. Buehler | 48 | 2015 | President and CEO of Integrated Water Services | Yes | Audit (Chair), Compensation | | Joan K. Chow | 63 | 2021 | Former Executive Vice President and Chief Marketing Officer of Conagra Foods | Yes | Compensation (Chair), Audit | | Arve Hanstveit | 69 | 1995 | CFO of Foldstar, Inc. | Yes | Nominating and Corporate Governance (Chair), Audit | | David W. Moon | 62 | 2023 | President and CEO of Energy Recovery, Inc. | No | | | Colin R. Sabol | 56 | 2023 | Former President of Measurement & Control Solutions at Xylem | Yes | Compensation, Nominating and Corporate Governance | | Pamela L. Tondreau | 64 | 2019 | Executive Vice President and Chief Legal Officer of onsemi | Yes | Board Chair, Compensation, Nominating and Corporate Governance |

  4. 2024 Director Nominees

    (1)As of Record Date, April 8, 2024. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 3

  5. DIRECTOR NOMINEES

    DIRECTOR NOMINEES

  6. DIRECTOR NOMINEES

    | Director Since | Name, Principal Occupation, and Other Information | | February 2015 | Alexander J. Buehler Age 48 |

  7. DIRECTOR NOMINEES

    Alexander J. Buehler currently serves as President & CEO of Integrated Water Services, a PE-backed company focused on product solutions, technical and digital services, and field services for water and wastewater treatment facilities. Beforehand, Mr. Buehler served as the Interim CEO of LiqTech International, a publicly traded manufacturing and technology company based in Copenhagen, Denmark that specializes in advanced membranes and filters comprised of silicon carbide ceramics. Prior to LiqTech, Mr. Buehler served as the President & CEO of the Brock Group, a leading soft craft services provider with established business across multiple end markets. Previously, he was EVP of Global Resources for Intertek, a publicly traded company headquartered in London that is a market leader in quality assurances services across multiple industries—namely energy, mining, power, infrastructure, aerospace, and others. Before Intertek, Mr. Buehler served at Energy Maintenance Services (“EMS”) from July 2014 to September 2017, first with a brief stint as Chief Financial Officer and then as President & Chief Executive Officer, during which time he steered the company through the market downturn in oil and gas, repositioned the business as a leading integrity maintenance company and led the marketing and sale of the business. Mr. Buehler became a member of the Company’s Board of Directors in February 2015. From 2011 to 2014, Mr. Buehler served as Energy Recovery’s Chief Financial Officer. From 2004 to 2011, Mr. Buehler held executive-level positions at Insituform Technologies, Inc. (now Aegion Corporation), a global leader in water infrastructure technology and services for municipalities and industry. With substantial experience across industrial end markets (water, energy), including products and services, with multiple C-level roles at publicly traded and private equity-backed companies, Mr. Buehler is a highly impactful business executive with years of experience in leadership, strategy, commercial excellence, financial oversight and execution discipline. He currently serves as Chairman of the Board for LiqTech International and has previously served as a board member and Chair of the Audit Committee for Viscount Systems. The Board selected Mr. Buehler to serve as a director because of his substantial experience in the global water, oil and gas and manufacturing industries, his knowledge of the Company and its products and his executive and financial experience.

  8. EDUCATION

    EDUCATION B.S. in Civil Engineering from the United States Military Academy at West Point and an M.B.A. in Finance from the Wharton School at the University of Pennsylvania.

  9. CURRENT BOARD COMMITTEES

    CURRENT BOARD COMMITTEES Audit Committee (Chair) Compensation Committee (Member) Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 12

  10. CURRENT BOARD COMMITTEES

    | Director Since | Name, Principal Occupation, and Other Information | | December 2021 | Joan K. Chow Age 63 |

  11. CURRENT BOARD COMMITTEES

    Joan K. Chow has extensive leadership experience in retail and marketing, consumer insights and human resources matters, and has served as senior leader at some the world’s most recognizable companies. Ms. Chow is the former Executive Vice President and Chief Marketing Officer at ConAgra Foods, one of North America’s leading packaged food companies. Prior to that, Ms. Chow spent extensive time with Sears Holdings Corporation in various marketing roles and ultimately served as Senior Vice President and Chief Marketing Officer for Sears Retail. She has also held executive positions with Information Resources Inc., Johnson & Johnson Consumer Products, Inc. and the Greater Chicago Food Depository. Ms. Chow is also a director at High Liner Foods and Spectrum Brands. She has previously served as a Director of Welbilt, Inc., The Manitowoc Company, RC2 Corporation and Feeding America. The Board selected Ms. Chow because of her extensive executive and marketing experience as well as her prior public company board experience, which provides her unique insight on key board and company issues.

  12. EDUCATION

    EDUCATION B.A. Cornell University and an M.B.A. from the Wharton School of the University of Pennsylvania.

  13. CURRENT BOARD COMMITTEES

    CURRENT BOARD COMMITTEES Compensation Committee (Chair) Audit Committee (Member) Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 13

  14. CURRENT BOARD COMMITTEES

    | Director Since | Name, Principal Occupation, and Other Information | | January 1995 | Arve Hanstveit Age 69 |

  15. CURRENT BOARD COMMITTEES

    Arve Hanstveit is the Chief Financial Officer at Foldstar, Inc. Previously, between August 1997 and November 2010, he served as Partner and Vice President of ABG Sundal Collier, a Scandinavian investment bank, where he was responsible for advising U.S. institutional investors on equity investments in Nordic companies. Prior to joining ABG Sundal Collier, Mr. Hanstveit worked as a securities analyst and as a portfolio manager for TIAA-Cref, a large U.S. institutional investor. From February 2007 to January 2010, Mr. Hanstveit served on the Board of Directors of Kezzler AS, a privately-held Norwegian company, which delivers secure track and trace solutions to the industry. Mr. Hanstveit is also a member of the Norwegian American Chamber of Commerce and the New York Angels, an independent consortium of individual accredited angel investors that provide equity capital for early-stage companies in the New York City area. The Board selected Mr. Hanstveit to serve as a director because of his early investment in the Company, his years of experience as a portfolio manager and securities analyst, his detailed understanding of global financial markets and his extensive knowledge of the Company, its products, and markets.

  16. EDUCATION

    EDUCATION B.A. in Business from the Norwegian School of Management and an M.B.A. from the University of Wisconsin, Madison.

  17. CURRENT BOARD COMMITTEES

    CURRENT BOARD COMMITTEES Nominating and Corporate Governance Committee (Chair) Audit Committee (Member) Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 14

  18. CURRENT BOARD COMMITTEES

    | Director Since | Name, Principal Occupation, and Other Information | | July 2023 | David W. Moon Age 62 |

  19. CURRENT BOARD COMMITTEES

    David W. Moon became the Company’s President and CEO in January 2024 and served as the Company’s interim-President and CEO from October 2023 to January 2024. Mr. Moon first joined the Company as a Board Member in July 2023. Mr. Moon was previously President of Carrier Commercial Refrigeration (“CCR”), a division of Carrier Global Corporation, from 2020 to 2021. Based in Paris, CCR was a leading supplier of high-efficiency CO2 turnkey refrigeration systems and services to the food retail, processing and storage segments and pharma segment in Europe, the Middle East, Africa and Asia. Prior to that, Mr. Moon worked as an Advisor for Ares Management LLC on the acquisition of CoolSys Inc., the U.S. market leader in commercial refrigeration and heating, ventilation and air conditioning (“HVAC”) services. He joined the CoolSys Board of Directors post-acquisition. Mr. Moon was President & Chief Operating Officer of Heatcraft Worldwide Refrigeration (“Heatcraft”), a division of Lennox International, Inc., from 2006 to 2017. Heatcraft was the global OEM leader in commercial refrigeration equipment. Mr. Moon joined Lennox International, Inc. in 1998 holding various management positions in the United States, Singapore and Australia. Prior to that, Mr. Moon held various management positions at Allied Signal, Inc., Case Corporation and Tenneco Oil Company in the United States, Hong Kong, Taiwan and Germany. Mr. Moon served on the Board of Directors of American Woodmark Corporation from 2015 to 2020. The Board selected Mr. Moon as a director because of his 25 years of commercial/industrial refrigeration and commercial HVAC leadership, his executive experience and leadership qualities.

  20. EDUCATION

    EDUCATION B.S. in Civil Engineering and an M.B.A. from Texas A&M University.

  21. CURRENT BOARD COMMITTEES

    CURRENT BOARD COMMITTEES None Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 15

  22. CURRENT BOARD COMMITTEES

    | Director Since | Name, Principal Occupation, and Other Information | | July 2023 | Colin R. Sabol Age 56 |

  23. CURRENT BOARD COMMITTEES

    Colin R. Sabol joined the Board in July 2023. Mr. Sabol is an accomplished business leader, strategist and deal maker with over 20 years of experience in the global water and energy markets. From 2017-2022, Mr. Sabol was President of Measurement & Control Solutions at Xylem, Inc., a global water technology provider. Between 2013 and 2017, he led a wide range of global business at Xylem including Analytical Instrumentation, Water Treatment and the Dewatering Pump Rental businesses. Mr. Sabol joined ITT, Inc. in 2006 as VP Growth for the Fluid & Motion Control segment, where he led the transformation of a mechanical equipment portfolio into a technology and services leader. He was instrumental in effecting the spin-off of Xylem from ITT in 2011. Mr. Sabol first entered the water industry at General Electric Company where he served as Chief Growth Officer of GE Water from 2003 to 2006. He served on the board of Faradyne Motors, LLC, a JV between Xylem and Pentair from 2009 to 2017 and was Board Chair of Xylem Watermark, Xylem’s corporate social responsibility program, from 2009 to 2017. The Board selected Mr. Sabol as a director because of his extensive executive experience and his expertise within the water industry, which provides him with unique insight on key issues involving the Company’s water business unit.

  24. EDUCATION

    EDUCATION B.S. in Material Engineering from Alfred University.

  25. CURRENT BOARD COMMITTEES

    CURRENT BOARD COMMITTEES Compensation Committee (Member) Nominating and Corporate Governance Committee (Member) Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 16

  26. CURRENT BOARD COMMITTEES

    | Director Since | Name, Principal Occupation, and Other Information | | July 2019 | Pamela L. Tondreau Age 64 |

  27. CURRENT BOARD COMMITTEES

    Pamela L. Tondreau was elected as Chair of the Board in October 2023 and had served as the Board’s Lead Independent Director since May 2020. Ms. Tondreau is the Executive Vice President and Chief Legal Officer of ON Semiconductor Corporation (now onsemi. Previously, she served as a consultant to Infineon Technologies AG, which purchased Cypress Semiconductor Corporation (“CY”) in April 2020 until July 2020. Prior to her consulting role, Ms. Tondreau served as Chief Legal Officer, Corporate Secretary and Executive Vice President of Human Resources of CY from 2014 through 2016. Prior to her tenure with CY, Ms. Tondreau was an executive with Hewlett-Packard Corporation (“HP”) from 1999 to 2012 holding various positions including Chief Intellectual Property Counsel, Deputy General Counsel to the Chief Technology Officer, counsel to the Technology Committee of the Board, counsel for the networking business including leading the acquisition of 3Com and integrating the China entity into HP. Ms. Tondreau has extensive experience in the areas of intellectual property strategy, corporate governance and executive compensation, enterprise risk management and domestic and international mergers and acquisitions (“M&A”). The Board selected Ms. Tondreau as a director because of her experience as a technology executive and General Counsel and her knowledge and experience with corporate governance, compliance, intellectual property, policy and M&A.

  28. EDUCATION

    EDUCATION B.A. in Anthropology and Economics from the University of California at Berkeley and a J.D. from McGeorge School of Law.

  29. CURRENT BOARD COMMITTEES

    CURRENT BOARD COMMITTEES Compensation Committee (Member) Nominating and Corporate Governance Committee (Member)

  30. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT

    THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT

  31. STOCKHOLDERS VOTE “FOR” THE ELECTION OF

    STOCKHOLDERS VOTE “FOR” THE ELECTION OF ALEXANDER J. BUEHLER, JOAN K. CHOW, ARVE HANSTVEIT, DAVID W. MOON, COLIN R. SABOL AND PAMELA L. TONDREAU. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 17

  32. INFORMATION ABOUT THE BOARD OF DIRECTORS

    INFORMATION ABOUT THE BOARD OF DIRECTORS

  33. Board of Directors

    Board of Directors The number of directors is fixed by the Board, subject to the terms of the Charter and the Bylaws.

  34. Directors

    Directors Until the 2024 Annual Meeting, the Board will continue to consist of seven directors:

  35. Directors

    | | | Board Committee Memberships | | | | Director | Age (1) | Audit | Compensation | Nominating & Corporate Governance | | Alexander J. Buehler | 48 | Chair | Member | | | Joan K. Chow | 63 | Member | Chair | | | Arve Hanstveit | 69 | Member | | Chair | | Robert Yu Lang Mao | 80 | | | | | David W. Moon | 62 | | | | | Colin R. Sabol | 56 | | Member | Member | | Pamela L. Tondreau (2) | 64 | | Member | Member |

  36. Directors

    (1)As of the Record Date. (2)Ms. Tondreau also serves as Chair of the Board. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 20

  37. Board of Directors

    Board of Directors The Board, either directly or through one or more of its committees, reviews the Company’s business strategy and the Company’s management assessment of the related risk, and discusses with the Company’s management the appropriate level of risk. The Board relies on each Board committee to oversee the Company’s management of specific risks related to that Board committee’s function. While the Board is responsible for setting, monitoring, and maintaining the Company’s risk management policies and practices, the Company’s executive officers and members of the Company’s management team are responsible for implementing and overseeing the Company’s day-to-day risk management processes. Certain risks are reviewed and discussed with the entire board, such as (but not limited to): •Significant commercial risks •Capital market risks •Material legal or reputational matters •Mergers and acquisitions •Strategy •Competitive developments •Risks related to sustainability •Cybersecurity risks Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 29

  38. Director Compensation

    Director Compensation When establishing and reviewing the Company’s non-employee directors’ compensation, the Company considers the level of work and involvement the directors have with the Company’s business. The Company also considers compensation paid to directors in the marketplace generally and at the Company’s peer group companies. In 2023, the Company also had its independent compensation consultant perform a Board compensation assessment. For board service period June 2023 to June 2024, the Company’s annual non-employee director compensation structure is as follows:

  39. Director Compensation

    | | Retainer Fee | | Board Fees | | | Cash Retainer | 50,000 | | Equity Retainer (1) | 100,000 | | | 150,000 | | Chair of the Board Fees (2) | | | Cash Retainer | 50,000 | | Equity Retainer (1) | 35,000 | | | 85,000 | | Committee and Lead Independent Director Fees (2) (3) | | | Lead Independent Director | 15,000 | | Chair of the Audit Committee | 15,000 | | Chair of the Compensation Committee | 10,000 | | Chair of the Nominating & Corporate Governance Committee | 5,000 |

  40. Director Compensation

    (1)Fair value of equity awarded at grant date. Awards granted vest on the earlier of 1-year or on date of the 2024 Annual Meeting following the date of grant. (2)Fees are in addition to base Board Fees. (3)Fees are paid in cash Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 35 In October 2023, Mr. Moon was appointed as the Company’s Interim President and CEO replacing Mr. Mao. Also in October, 2023, Ms. Tondreau was elected as Chair of the Board replacing Mr. Mao. Upon his appointment as the Company’s Interim President and CEO, Mr. Moon became an employee of the Company and consequently was no longer eligible to receive the annual cash retainer, which is paid quarterly; however, Mr. Moon retained his annual equity retainer which was granted when he joined the Board. While serving as the Company’s President and CEO, Mr. Mao was not eligible to receive any board related compensation for serving as a director or as the Chair of the Board. Once Mr. Mao ceased to be an employee of the Company when he departed as President and CEO, he received a prorated portion of the compensation outlined above. Ms. Tondreau received a prorated portion of the Lead Independent Director compensation and Chair of the Board compensation, prorated for her dates of service in those roles, respectively.

  41. Director Compensation for the Year Ended December 31, 2023

    Director Compensation for the Year Ended December 31, 2023 The table below summarizes the compensation paid to non-employee directors for the year ended December 31, 2023. Directors who are also the Company’s employees receive no additional compensation for their service as a director. During the fiscal year ended December 31, 2023, Mr. Moon became an employee of the Company on October 23, 2023. Mr. Mao’s and Mr. Moon’s compensation as employees is discussed in “Executive Compensation.”

  42. Director Compensation for the Year Ended December 31, 2023

    | Director | Fees Earned and Paid in Cash | Equity Awards (1) | Total | Unvested RSU Shares Held December 31, 2023 | | | ($) | ($) | ($) | (#) | | Alexander J. Buehler (2) (3) | 70,000 | 99,981 | 169,981 | 3,703 | | Joan K. Chow (4) | 54,405 | 99,981 | 154,386 | 3,703 | | Arve Hanstveit (3) (5) | 60,000 | 99,981 | 159,981 | 3,703 | | Robert Yu Lang Mao (6) | 9,659 | 62,461 | 72,120 | 4,153 | | David W. Moon (7) | 14,615 | 91,207 | 105,822 | 3,232 | | Colin R. Sabol (8) | 24,038 | 91,207 | 115,245 | 3,232 | | Pamela L. Tondreau (9) | 77,068 | 121,744 | 198,812 | 5,150 | | Total | 309,785 | 666,562 | 976,347 | 26,876 |

  43. Director Compensation for the Year Ended December 31, 2023

    (1)The amount in the Equity Awards column sets forth the fair value on the grant date of the restricted stock unit awards granted in 2023 as calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Share-Based Compensation (“ASC 718”), without regard to estimated forfeitures. The method and assumptions used to calculate the fair value on the grant date of the Company’s equity awards is discussed in Note 12 of the Notes to Consolidated Financial Statements included in the 2023 Annual Report on Form 10-K for the year ending December 31, 2023. (2)Mr. Buehler is a director and the Chair of the Audit Committee. (3)Includes compensation to Mr. Buehler and Mr. Hanstveit for participation in a special committee of the Board. (4)Ms. Chow assumed the position of Chair of the Compensation Committee on June 23, 2023. The amount of fees earned and paid in cash in fiscal year 2023 includes the annual cash retainer and compensation for service as the Chair of the Compensation Committee prorated for the period of service from June 23, 2023 through December 31, 2023. (5)Mr. Hanstveit is a director and the Chair of the Nominating and Governance Committee. (6)Mr. Mao ceased to be an employee of the Company on October 23, 2023. The amount of fees earned and paid in cash in fiscal year 2023 represents the prorated cash retainer for the period of service from October 23, 2023 through December 31, 2023. In addition, Mr. Mao received a prorated equity award for service between October 23, 2023 through the 2024 Annual Meeting date. (7)Mr. Moon was appointed a director on July 10, 2023. On October 23, 2023, Mr. Moon assumed the role of Interim President and CEO and was no longer eligible to receive the board retainer fee. The amount of fiscal year 2023 fees earned and paid in cash represents the prorated cash retainer for the period of service from July 10, 2023 through October 23, 2023. Mr. Moon received a prorated equity award for service between July 10, 2023 through the 2024 Annual Meeting date. Unvested RSUs presented relates to Mr. Moon’s director position only. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 37 (8)Mr. Sabol was appointed a director on July 10, 2023. The amount of fees earned and paid in cash represents the pro rated cash retainer for the period of service from July 10, 2023 through December 31, 2023. Mr. Sabol received a prorated equity award for service between July 10, 2023 through the 2024 Annual Meeting date. (9)Ms. Tondreau is a director and serves as the Chair of the Board. Ms. Tondreau was elected Chair of the Board on October 24, 2023 and had previously served as Lead Independent Director. Ms. Tondreau also served as the Chair of the Compensation Committee through June 23, 2023. The amount of fiscal year 2023 fees earned and paid in cash represents the annual cash retainer paid in 2023, the prorated portion of the fee for service as the Chair of the Board from October 24, 2023 to December 31, 2023, the prorated portion of the fee for Lead Independent Director from January 1, 2023 to October 24, 2023 and the prorated portion of the fee for Chair of the Compensation Committee from January 1, 2023 through June 23, 2023. The amount of equity awards includes grant for Ms. Tondreau’s service as Chair of the Board prorated for the period of service from October 24, 2023 through the 2024 Annual Meeting date. The Company’s non-employee directors are also reimbursed for travel, lodging and other reasonable expenses incurred in connection with their attendance at the Board or Board committee meetings.

  44. 2023 Actual Compensation Allocations

    | Annual Incentives Variable pay to incentivize and recognize performance in areas of short-term strategic importance. (3) |

  45. 2023 Actual Compensation Allocations

    | Long-Term Incentives Equity-based pay to incentivize and recognize performance in areas of long- term strategic importance, promote retention and stability, and align executives with shareholders. |

  46. Compensation Philosophy and Objectives

    The 2023 MBOs for the Other NEOs included the two financial performance objectives and a third objective, which the Company’s President and CEO determined was most critical to the Company’s future growth and most likely to hold executives accountable for the operations for which they are responsible. Each Other NEO receives an annual performance review from the Company’s President and CEO (with review and discussion with the Compensation Committee) to evaluate his performance on both a qualitative and quantitative basis in connection with their individual objectives. The Compensation Committee, however, ultimately determines the payout of cash incentives for all of the Company’s NEOs. For 2023, the Compensation Committee determined that approximately 82% of the Company’s President and CEO’s objectives were met, however, due to the Company’s President and CEO transition that occurred in October of 2023, no award was granted to the Company’s former or interim President and CEO. For all Other NEOs, their actual AIP payout was determined based on a combination of financial performance and each individual’s performance relative to their individual objectives. For a more detailed discussion of the AIP, please refer to “Annual Cash Incentive Compensation,” discussed below. Additionally, in 2023, the Company’s granted to its NEOs RSUs. RSUs serve as a meaningful and durable retention tool even in periods of volatile stock price performance with realized executive pay outcomes also tied to the Company’s stock performance and are a component of its compensation program that the Compensation Committee believes is necessary in order to retain the Company’s executive officers and be competitive with compensation packages to executives offered by comparable companies. In addition, the Company’s 2023 long-term incentive awards vest over four years, reinforcing the long term focus and the performance dynamic of the Company’s executive compensation program. For a more detailed discussion of the Company’s incentive plans, please refer to “Equity-Based Incentive Compensation”. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 46

  47. Independent Compensation Consultant for Compensation Committee

    Independent Compensation Consultant for Compensation Committee The Compensation Committee has the authority under its charter to engage the services of outside advisors, experts and others to assist it. Accordingly, the Compensation Committee retained Compensia to advise on matters related to the compensation of its executive officers, including the Company’s President and CEO, and the Board. For 2023, Compensia advised the Compensation Committee on best practices to attract, retain and incentivize the Company’s executives, assisted in the design of the Company’s compensation plan, and derived the peer group and resulting compensation benchmark data against which the Company’s overall compensation structure and levels are compared. Based on the consideration of the various factors as set forth in the rules of the SEC and the listing standards of NASDAQ, the Compensation Committee has determined that its relationship with Compensia and the work of Compensia on behalf of the Compensation Committee have not raised any conflict of interest.

  48. Competitive Positioning

    Competitive Positioning In 2015, the Compensation Committee began the process of formally reviewing competitive market compensation data and directed Compensia to develop a peer group of companies against which the Company’s overall compensation may be compared. While the Company has historically believed that it has a unique footprint that makes such comparisons extremely difficult, based on the advice of the Company’s advisors, the Company attempts to find meaningful comparisons and periodically test and adjust such peers to better reflect its relative position. The Company conducted its latest assessment in late 2022 and updated its list of peers that were used for the Company’s 2023 compensation decisions utilizing a process similar to past years. The Company’s peer group consists of companies in industrial machinery, clean technology, energy, and broader technology and health care equipment industries that are comparable to the Company in terms of revenue, market capitalization, headcount and location, where possible. The Company’s peers were relatively similar to the Company in terms of revenue and market cap and had median revenue of approximately $190 million and a median market cap of approximately $1.04 billion at the time of the Company’s 2023 executive officer compensation assessment. As part of this process, the following peer group companies were identified and used by Compensia in its 2023 compensation assessment that was relied upon by the Compensation Committee for its 2023 executive pay decision-making: 908 Devices Inc. ACM Research, Inc. Alphatec Holdings, Inc. Atlus Power, Inc. Aspen Aerogels, Inc. Ballard Power Systems Inc. CEVA, Inc. Clean Energy Fuels Corp. DMC Global Inc. FARO Technologies, Inc. FuelCell Energy, Inc. Helios Technologies, Inc. Impinj, Inc. Mesa Laboratories, Inc. Middlesex Water Company nLIGHT, Inc. Omega Flex, Inc. PROCEPT BioRobotics Corp. Stem, Inc. Zynex, Inc. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 51

  49. Annual Cash Incentive Compensation

    Annual Cash Incentive Compensation The Company’s Annual Incentive Plan (“AIP”), is a cash incentive plan designed to encourage the performance and retention of eligible employees in recognition of individual achievement that contributes to the Company’s strategic and financial success. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 52 The AIP is intended to incentivize short-term performance consistent with the Company’s strategy and the achievement of key financial metrics. Payments under the AIP to the Company’s NEOs are based on a formula that takes into account both the level of achievement of the Company’s performance goals for the year and the level of achievement of individual performance objectives. For 2023, each NEO’s bonus determination under the AIP was determined based on the following formula:

  50. Annual Cash Incentive Compensation

    | Base Salaryx | NEO Target Bonus Percentagex | NEO Individual Performance Objective Achievement |

  51. Approved Annual Incentive Plan Levels

    Approved Annual Incentive Plan Levels The Compensation Committee met in January 2024 to consider the 2023 performance of each NEO as compared to their respective MBOs and approved the AIP allocation levels for each NEO, as set forth in the table below. Importantly, the Compensation Committee did not apply any upward discretion with respect to bonus payouts to any NEO.

  52. Approved Annual Incentive Plan Levels

    | | 2023 AIP | | | | | Named Executive Officer | Target (1) | Target (1) | AIP Paid (2) | 2023 AIP Paid in 2024 | | | (%) | ($) | (%) | ($) | | David W. Moon (3) | — | — | — | — | | Robert Yu Lang Mao (4) | 100 | 555,240 | 82 | — | | Joshua Ballard | 60 | 224,184 | 41 | 153,819 | | Rodney Clemente (5) | 65 | 229,883 | 54 | 192,173 | | Farshad Ghasripoor | 60 | 189,760 | 53 | 168,156 | | William W. Yeung | 60 | 199,886 | 53 | 177,135 |

  53. Approved Annual Incentive Plan Levels

    (1)Target percentage is the weighted average for the year. Target amount is the 2023 weighted average base salary multiplied by the weighted average target percentage. (2)AIP Paid percentage is the 2023 AIP Paid in 2024 compared to the 2023 weighted average base salary. (3)On October 23, 2023, Mr. Moon was appointed as Interim President and CEO. Mr. Moon was not eligible for any AIP payments for fiscal year 2023. (4)On October 23, 2023, Mr. Mao departed as President and CEO. Although the Compensation Committee approved Mr. Mao’s AIP percentage, he was not eligible to receive any AIP payments for fiscal year 2023 in 2024. (5)In July 2023, Mr. Clemente received an increase in his 2023 AIP target percentage.

  54. Equity-Based Incentive Compensation

    Equity-Based Incentive Compensation Historically, the Company granted equity-based awards, including stock options and RSUs, to eligible NEOs and other employees pursuant to its 2020 Incentive Plan. As with other elements, the grant date fair value received through various stock-based awards is included in the Company’s annual compensation review process. The Company periodically collects and reviews competitive data from the peer group that includes data with respect to the use of, and value received through, equity incentives. Individual equity awards are made based on the Company’s assessment of this market data along with several other factors, including such individual's prior performance, overall company contributions, future potential as well as the retentive impact of such individual's unvested equity. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 55 In 2023, the Company granted RSUs to executives and other key employees to provide long-term incentives to align management with long-term stockholder interest intended to increase stockholder value. Further, the Company uses stock options, RSUs and other equity based incentive awards to remain competitive in its efforts to retain and recruit key talent. The Compensation Committee believes that with management having a stake in the Company’s long-term success, the likelihood of enhancing stockholder value increases.

  55. 2023 Equity-Based Incentive Awards

    2023 Equity-Based Incentive Awards In 2023, the Compensation Committee explored whether to shift a portion of its long- term equity incentive compensation from stock options to awards with vesting tied to relative stock price performance criteria. For part of the Company’s annual equity grant program, in January 2023, the Compensation Committee authorized the grant of RSUs to the NEOs in amounts intended to cover partial-year equity allocations for each individual with the intent to grant additional performance-based awards later in the year once those award terms were finalized. In July 2023, the Compensation Committee determined to postpone the development of this performance-based equity program and issued an additional grant of RSUs to NEOs to constitute the full intended annual award for each individual. In addition, in October 2023, the Compensation Committee approved additional RSUs to Messrs. Clemente and Ghasripoor as part of annual compensation planning.

  56. 2023 Equity-Based Incentive Awards

    | Named Executive Officer | RSUs | Value | | | (#) | ($) | | David W. Moon (1) (2) | 15,233 | 279,983 | | Robert Yu Lang Mao (3) | 46,707 | 1,298,829 | | Joshua Ballard (4) (5) | 29,704 | 832,756 | | Rodney Clemente (2) (4) (5) | 53,055 | 1,281,286 | | Farshad Ghasripoor (2) (4) (5) | 48,290 | 1,141,052 | | William W. Yeung (4) (5) | 23,680 | 659,389 |

  57. 2023 Equity-Based Incentive Awards

    (1)On October 23, 2023, Mr. Moon was appointed as Interim President and CEO. Mr. Moon’s equity awards are related to his appointment as Interim President and Chief Executive Officer. (2)The vesting schedule for the RSU awards granted in October 2023, including the award to Mr. Moon for his service as interim President and CEO, provides that 100.0% of the RSU awards vest on the first anniversary of the vesting commencement date. (3)On October 23, 2023, Mr. Mao departed as President and CEO. Mr. Mao received RSU shares awarded as part of the Company’s annual long-term incentive plan as an employee. Please refer to Director Compensation for information regarding equity based Incentive Awards granted to Mr. Mao in his role as a Director. (4)The vesting schedule for the RSU awards granted in January 2023 as part of the Company’s annual equity grant program provides that 25% of the RSU awards vest on the first four anniversaries of the vesting commencement date. (5)The vesting schedule for the RSU awards granted in July 2023 provides that 33.3% of the RSU awards vest on the first three anniversaries of the vesting commencement date. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 56 The Compensation Committee determined these grants primarily based on an assessment of: (i) with respect to the President and CEO, the Compensation Committee’s annual review and assessment of the President and CEO’s performance and contributions during the previous year as well as expected contributions in fiscal year 2023, (ii) with respect to the NEOs, other than the President and CEO, the President and CEO’s recommendations tied to his review of each Other NEO’s performance and contributions during the previous year as well as expected contributions in fiscal year 2023, (iii) the Compensation Committee’s review of each executive officer’s historical equity compensation levels and retention hold at the Company and (iv) the Compensation Committee’s review of applicable competitive market compensation data (including the Company’s peer practices) and company-wide compensation levels, including the aggregate equity budget and available share pool for fiscal year 2023.

  58. Change in Control Severance Plan

    Change in Control Severance Plan The Energy Recovery, Inc. Change in Control Severance Plan (the “CIC Plan”) is summarized below under the caption “Change in Control Plan” and the potential payments are summarized below under the caption “Potential Payments under the Change in Control Plan.” Designed as a retention tool, the CIC Plan protects participating executives from economic harm in the event that their employment is actually or constructively terminated after a change in control of the Company. Under this “double trigger” approach, participating executives are eligible for severance and other benefits under the CIC Plan if they are terminated without “Cause” or leave for “Good Reason,” as those terms are defined below, within 18 months after a change in control of the Company. The Company believes these change of control severance benefits are an essential element of its executive compensation program and assist the Company in recruiting and retaining talented individuals. By establishing these change in control severance benefits, the Company believes it can mitigate the distraction and loss of executive officers that may occur in connection with a rumored or actual change in control and protect stockholder interests while a transaction is under consideration or pending. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 57

  59. Change in Control Plan

    Change in Control Plan Pursuant to the terms of the CIC Plan, on each December 31, the CIC Plan is extended automatically for an additional year unless the Compensation Committee delivers written notice, at least six months prior to the end of each such term, to each participant that the CIC Plan will not be extended. As a result, on December 31, 2023, the CIC Plan was automatically extended through December 31, 2024. The Compensation Committee is authorized by the CIC Plan to designate any full-time employee of the Company as a participant. The participants include the Company’s executive officers and other designated key employees. A participant is entitled to severance benefits under the CIC Plan if a change of control occurs and the acquiring company terminates the participant’s employment without cause, or the participant terminates his or her employment with good reason, in either case within 18 months after a change in control (including, but not limited to, an acquisition of a controlling interest in the Company by a third party). The CIC Plan sets forth definitions of cause, good reason and change in control, which are described in full at the end of this summary. The severance benefits, conditioned on the participant’s signing a release in favor of the Company and complying with certain other covenants under the CIC Plan, include the following (in addition to then earned and unpaid amounts owed less deductions required or permitted by law):

  60. Change in Control Plan

    | Cash Compensation | •Additional 12 months of base salary upon termination | | | •100% of participant’s target annual bonus in the year of the occurrence of the change of control | | COBRA Benefits | •Company paid coverage following first eligibility limited to the lower of 12 months or re-employment eligibility of a comparable plan with another employer | | Equity Compensation | •Immediate vesting of 100% of unvested equity awards upon termination | | Other Compensation | •Maximum of $10,000 of reasonable outplacement costs |

  61. Change in Control Plan

    The CIC Plan also provides that if a change in control occurs and a participant’s equity compensation is not converted, assumed or replaced by a successor entity with an equivalent award, then immediately prior to the change in control, the participant’s equity compensation shall become fully exercisable and vested and all forfeiture restrictions on such equity compensation shall immediately lapse. In the case of equity compensation, the amount of which is based on the satisfaction of performance criteria, all performance criteria will be deemed satisfied at target. The conversion, assumption or replacement of an equity award for another equity award of stock that is not publicly traded shall not be considered an equivalent award for purposes of the CIC Plan. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 58 In no event is the Company obligated to gross up any payment or benefit to a participant to avoid the effects of the “parachute rules” of IRC Sections 280G and 4999. Benefits to a participant, however, may be reduced if the reduction would result in the participant receiving a greater payment on an after-tax basis due to the application of those sections of the tax law (such provision, a “better after-tax” provision). Additionally, payments may be conditioned or delayed as needed to be exempt from or comply with IRC Section 409A relating to “non- qualified deferred compensation.” The CIC Plan also obligates the Company to make all payments to a Participant required by applicable law upon employment termination such as earned but unpaid salary and bonus (without regard to a release or other covenants of the participant in the CIC Plan and subject to deductions required or permitted by applicable law).

  62. Key Defined Terms of the Change in Control Plan

    Key Defined Terms of the Change in Control Plan “Cause” means in the context of employment termination: (i)any act by participant in the course of employment or participant’s performance of any act which, if participant were prosecuted, would constitute a felony; (ii)participant’s failure to carry out his or her material duties, after not less than thirty (30) days prior written notice of such failure, and which failure is unrelated to an illness or disability of not greater than twelve (12) work weeks; (iii)participant’s dishonesty towards or fraud upon the Company which is injurious to the Company; (iv)participant’s violation of confidentiality obligations to the Company or misappropriation of Company assets; or (v)participant’s death or disability, as defined in the Company long-term disability plan in which the participant participates, or if the participant does not participate in such a plan, the principal long-term disability plan that covers the Company’s senior-level executives. “Change in Control” means: (i)an acquisition of 50% or more of the Company’s outstanding common stock or voting securities of the Company by any person or entity, other than the Company, a Company employee benefit plan, or a corporation controlled by the Company’s stockholders; Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 59 (ii)changes in the composition of the Board over a rolling twelve-month period, which changes result in less than a majority of the directors consisting of Incumbent Directors. “Incumbent Directors” include directors who are or were either (x) members of the Board as of the effective date, as defined in the CIC Plan or (y) elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination. Incumbent Directors do not include any individual not otherwise an Incumbent Director whose election or nomination resulted from an actual or threatened proxy contest (relating to the election of directors to the Board); or (iii)consummation of a complete liquidation or dissolution of the Company, or a merger, consolidation, or sale of all or substantially all of the Company’s then existing assets (collectively, a “Business Combination”) other than a Business Combination: (x) in which the stockholders of the Company immediately prior to the Business Combination receive 50% or more of the voting stock resulting from the Business Combination, (y) through which at least a majority of the members of the Board are Incumbent Directors, and (z) after which no individual, entity, or group (excluding any corporation resulting from the Business Combination or any employee benefit plan of such corporation or of the Company) owns 50% or more of the stock of the corporation resulting from the Business Combination who did not own such stock immediately before the Business Combination. “Good Reason” means the occurrence of any one or more of the following without the participant’s express written consent: (i)the termination or material breach of this CIC Plan by the Company; (ii)the failure by the Company to have any successor, or any assignee of all or substantially all of the Company’s assets, assume this CIC Plan; (iii)any material diminishment in participant’s title, position, duties, responsibilities, or status other than those in effect immediately prior to the Change in Control (including, in the case of a participant who is the CEO who reports directly to the Board or a participant who is the CFO or General Counsel who reports directly to the CEO immediately prior to the change, if, after such Change in Control, the CEO no longer reports directly to the Board of a public company and the CFO and/or General Counsel no longer report directly to the CEO of a public company), it being understood that in the case of a participant other than the CEO, CFO, or General Counsel, a participant’s reporting to a business unit head instead of to the CEO will not constitute a material diminishment if the participant’s duties and responsibilities otherwise remain substantially the same; (iv)any material reduction in, limitation of, or failure to pay or provide any compensation provided to the participant under any agreement or understanding between the participant and the Company, pursuant to the Company’s policies and past practices, as of the date immediately prior to the Change in Control; Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 60 (v)any material reduction in the participant’s annual base salary or target bonus opportunity from the amounts in effect immediately prior to the Change in Control; or (vi)any change in the participant’s place of employment that increases participant’s commuting distance by more than thirty (30) miles over his or her commuting distance immediately prior to the Change in Control. Good Reason will only be deemed to exist if the participant provides notice of the condition(s) constituting Good Reason within thirty (30) days of the existence of the condition and gives the Company thirty (30) days from its receipt of such notice to remedy the condition. If the condition is remedied, Good Reason will not be deemed to exist. The benefits provided in the CIC Plan are summarized in the table below, and the amounts shown assume hypothetically that each applicable termination or event was effective as of December 31, 2023. The actual amounts that will be paid can only be determined at the time of the termination or other applicable event. The table below does not include payments that are generally required by applicable law for all salaried employees (notwithstanding that these requirements are referred to in the applicable arrangement) such as payment of accrued but unpaid wages and unused vacation or rights to previously incurred business expense reimbursement. The amounts set forth below do not take into account the “better after-tax” provision or reflect taxes, tax withholding, or other deductions required by law and may be subject to reduction or delay in payment in accordance with the specific provisions of the applicable arrangement or law. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 61

  63. Potential Payments under the Change in Control Plan

    Potential Payments under the Change in Control Plan The payments summarized below are triggered if a change of control, as defined in the CIC Plan, occurs on December 31, 2023, and the acquiring company terminates the participant’s employment without cause, or the participant terminates his/her employment with good reason, in either case within 18 months after a change in control (including, but not limited to, an acquisition of a controlling interest in the Company by a third party). The amounts described below do not take into account the “better after-tax” provision or applicable taxes.

  64. Potential Payments under the Change in Control Plan

    | Named Executive Officer | Lump-Sum Payment (1) | Vesting of all Unvested Equity Compensation Awards (2) | COBRA Benefits for up to 12 Months (Medical, Dental and Vision Benefits) (3) | Maximum Outplacement Services Reimbursement | | | ($) | ($) | ($) | ($) | | David W. Moon (4) | — | — | — | — | | Robert Yu Lang Mao (5) | — | — | — | — | | Joshua Ballard | 605,664 | 757,372 | 38,141 | 10,000 | | Rodney Clemente | 608,505 | 1,480,943 | 29,739 | 10,000 | | Farshad Ghasripoor | 512,662 | 1,264,506 | 28,182 | 10,000 | | William W. Yeung | 534,744 | 854,952 | 42,026 | 10,000 |

  65. Potential Payments under the Change in Control Plan

    (1)These amounts consist of twelve months’ base pay and 100% of the target annual bonus. (2)The CIC Plan further provides that all unvested equity compensation, including time and performance vesting awards, held by a participant will vest and become exercisable immediately prior to a Change in Control (whether or not the participant’s employment is terminated) if a Change of Control occurs and (i) the Company’s shares are no longer publicly traded or (ii) if a publicly-traded company acquires the Company, but does not replace unvested Company awards with defined equivalent equity compensation applicable to the acquiring company’s stock. For this purpose, all performance criteria, if any, underlying unvested awards are deemed to be satisfied at 100% of target. The amount in this column for vesting of equity compensation awards assumes hypothetically that each applicable trigger under the CIC Plan occurred on December 31, 2023, and in the case of vesting RSUs is based on the closing price of the Company’s common stock of $18.84 on December 31, 2023 and in the case of vesting option awards is based on $18.84 minus the exercise price of the applicable option. (3)COBRA amounts are based on NEO participation at December 31, 2023, and are estimated based on medical, dental and vision amounts paid by Company on behalf of the Named Executive and amounts paid by the Named Executive. (4)On October 23, 2023, Mr. Moon was appointed as Interim President and CEO. This interim position did not qualify under the Company’s Change in Control plan at December 31, 2023. (5)On October 23, 2023, Mr. Mao departed as President and CEO and was not eligible to receive compensation under the Company’s Change in Control plan as of October 23, 2023. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 62

  66. Severance and Termination Plan

    Severance and Termination Plan The Energy Recovery, Inc. Severance Plan (the “Severance Plan”) was approved and adopted by the Board in February 2021 for the benefit of certain key members of management and other senior employees, including each of the NEOs. Designed as a retention tool, the Severance Plan is designed to protect participating executives from economic harm in the event of a Qualifying Termination (as defined in the Severance Plan). The Company believes these severance benefits are an essential element of its executive compensation program and assist the Company in recruiting and retaining talented individuals. The Severance Plan is summarized below under the caption “Severance Benefits” and the potential payments are summarized below under the caption “Potential Payments under the Severance Plan.”

  67. Severance Benefits

    Severance Benefits The Severance Plan sets forth severance benefits in the event of a Qualifying Termination, which includes all payments required by applicable law, including all earned and unpaid salary, all earned but unpaid and undeferred bonus attributable to the year that ends immediately before the year in which the termination occurs and other benefits under applicable benefit plans to which the employee was entitled upon such termination. In addition, the Severance Plan includes the following benefits.

  68. Severance Benefits

    | Cash Compensation | •Additional 6 months of base salary upon termination | | COBRA Benefits | •Company paid coverage following first eligibility limited to the lower of 6 months or re-employment eligibility of a comparable plan with another employer | | Equity Compensation | •Immediate vesting of 25% of unvested equity awards upon termination | | | •Extension of post-termination exercise period of vested stock options from 3 months to 6 months |

  69. Severance Benefits

    In the case of unvested equity compensation where the amount payable is based on the satisfaction of performance criteria, the amount of unvested equity will be determined by deeming all performance criteria satisfied at 100% target; to the extent the equity compensation is subject to the IRC Section 409A, the vesting acceleration of the equity compensation shall not cause any distribution or payment under the equity compensation to be made before the earliest date it may be made without violating the IRC Section 409A. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 63 The severance benefits are contingent upon the employee meeting certain eligibility requirements, including delivering to the Company a general release. Because it may be difficult for the Company’s executive officers to find comparable employment following a termination without cause, these severance benefits are intended to ease the consequences to an executive officer of an unexpected termination of employment. The Company also believes that having such arrangements in place can help the Company attract and retain key employees in a marketplace where these types of arrangements are commonly offered by its peer companies.

  70. Key Defined Terms of the Severance Plan

    Key Defined Terms of the Severance Plan “Qualifying Termination” means an (i) involuntary termination without “Cause” as defined in the CIC Plan, as amended and in effect at the time of the Eligible Employee’s termination and (ii) Eligible Employee is not terminated for a “Non-Qualifying Reason,” each as determined by the Plan Administrator in its sole discretion. For clarity, a “Qualifying Termination” shall include the situation where the Eligible Employee is notified of an involuntary termination without “Cause” as defined in the CIC Plan, as amended and in effect at the time of their termination, and which is not for a “Non-Qualifying Reason,” followed by an agreement between the Eligible Employee and the Employer to have the employee voluntarily resign their employment with Employer. In order for an involuntary termination to qualify, the termination of employment must occur with respect to employment with all entities in the Plan Sponsor’s controlled group as determined under the rules of IRC Section 414, as modified by IRC Section 409A. “Non-Qualifying Reason” means either (i) the Eligible Employee voluntarily terminates their employment for whatever reason (except when such voluntary termination of employment is based on an agreement with Employer following notice by Employer to the Eligible Employee of a “Qualifying Termination”); or (ii) the Eligible Employee separates from Employer for whatever reason, and (a) Eligible Employee accepts any position with Employer that begins prior to the effective date of their employment termination with Employer, or (b) a comparable position with Employer is offered to the Eligible Employee prior to the effective date of their employment termination with Employer. For comparison of internal positions, a comparable position is a position determined by the Plan Administrator as having the same or higher base salary or which is paid no more than 15% lower in base salary than the employee’s terminated position. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 64

  71. Potential Payments under the Severance Plan

    Potential Payments under the Severance Plan The payments summarized below are triggered if a termination, as defined in the Severance Plan, occurs on December 31, 2023. The amounts described below do not take into account the “better after-tax” provision or applicable taxes.

  72. Potential Payments under the Severance Plan

    | Named Executive Officer | Lump-Sum Payment (1) | Vesting of 25% of all Unvested Equity Compensation Awards (2) | COBRA Benefits for up to 6 Months (Medical, Dental and Vision Benefits) (3) | | | ($) | ($) | ($) | | David W. Moon (4) | — | — | — | | Robert Yu Lang Mao (5) | — | — | — | | Joshua Ballard | 189,270 | 189,343 | 19,071 | | Rodney Clemente | 178,972 | 370,236 | 14,870 | | Farshad Ghasripoor | 160,207 | 316,127 | 14,091 | | William W. Yeung | 167,108 | 213,738 | 21,013 |

  73. Potential Payments under the Severance Plan

    (1)These amounts consist of six months’ base pay. (2)The Severance Plan further provides that 25% of all unvested equity compensation, including time and performance vesting awards, held by a participant will vest and become exercisable immediately prior to termination. The amount in this column for vesting of equity compensation awards assumes hypothetically that each applicable trigger under the Severance Plan occurred on December 31, 2023, and in the case of vesting RSUs is based on the closing price of the Company’s common stock of $18.84 on December 31, 2023 and in the case of vesting option awards is based on $18.84 minus the exercise price of the applicable option. (3)COBRA amounts are based on each NEO’s participation at December 31, 2023, and are estimated based on medical, dental and vision amounts paid by the Company on behalf of the NEO and amounts paid by the NEO. (4)On October 23, 2023, Mr. Moon was appointed as Interim President and CEO. This position does not qualify under the Company’s Severance Plan. (5)On October 23, 2023, Mr. Mao departed as President and CEO and was not eligible to receive compensation under the Company’s Severance Plan as of October 23, 2023.

  74. Summary Compensation Table

    Summary Compensation Table The table below summarizes certain compensation information with respect to the Company’s NEOs for the applicable fiscal years ending December 31, 2023, 2022 and 2021.

  75. Summary Compensation Table

    | Named Executive Officer | Year | Salary | Stock Award (1) | Option Award (2) | Non-Equity Incentive Compensation (3) | All Other Compensation (4) | Total | | | | ($) | ($) | ($) | ($) | ($) | ($) | | David W. Moon(5) | 2023 | 84,615 | 279,983 | — | — | 618 | 365,216 | | President and Chief Executive Officer | | | | | | | | | Robert Yu Lang Mao(6) | 2023 | 470,999 | 1,298,829 | — | — | 23,643 | 1,793,471 | | Former President and Chief Executive Officer | 2022 | 534,016 | — | 999,997 | 473,454 | 25,698 | 2,033,165 | | | 2021 | 514,423 | — | 1,000,771 | 463,500 | 28,239 | 2,006,934 | | Joshua Ballard | 2023 | 372,897 | 832,756 | — | 153,819 | 22,277 | 1,381,748 | | Chief Financial Officer(7) | 2022 | 355,788 | 149,993 | 349,996 | 218,385 | 22,558 | 1,096,720 | | (7) | 2021 | 342,735 | — | 375,244 | 205,871 | 21,091 | 944,941 | | Rodney Clemente(8) | 2023 | 352,608 | 1,281,286 | — | 192,173 | 19,067 | 1,845,133 | | Senior Vice President, Water(8) | 2022 | 336,430 | 324,985 | 174,998 | 221,248 | 18,013 | 1,075,675 | | | 2021 | 324,087 | 174,989 | 175,138 | 194,670 | 17,132 | 886,015 | | Farshad Ghasripoor(9) | 2023 | 315,637 | 1,141,052 | — | 168,156 | 30,600 | 1,655,445 | | Chief Technology Officer | 2022 | 301,156 | 162,497 | 162,498 | 191,647 | 30,722 | 848,521 | | | 2021 | 290,107 | 162,494 | 162,624 | 174,259 | 26,133 | 815,617 | | William W. Yeung | 2023 | 332,732 | 659,389 | — | 177,135 | 26,413 | 1,195,669 | | Chief Legal Officer(10) | 2022 | 320,409 | 299,976 | 150,006 | 213,447 | 27,147 | 1,010,984 | | | 2021 | 308,654 | 137,492 | 137,606 | 185,400 | 21,433 | 790,585 |

  76. Summary Compensation Table

    (1)The amounts in the “Stock Award” column set forth the grant date fair value of RSU awards as calculated in accordance with ASC 718 without regard to estimated forfeitures. The grant date fair value of each award is measured based on the closing price of the Company’s common stock on the date of grant, unless there is no closing price on the date of grant, in which case it is based on the closing price on the trading day last preceding the date of grant. (2)The amounts in the “Option Award” column set forth the grant date fair value of stock options granted in the years indicated as calculated in accordance with ASC 718 without regard to estimated forfeitures. The methodology and assumptions used to calculate the grant date fair value are discussed in Note 12 of the Notes to Consolidated Financial Statements included in the Company’s 2023 Annual Report on Form 10-K filed on February 22, 2024. (3)Non-Equity Incentive Plan Compensation is also referred to as cash incentive bonuses. The amounts for each year shown were paid to the employee in the following year (e.g., 2023 non-equity incentives were earned in 2023 and paid to the employee in 2024). Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 70 (4)“All Other Compensation” includes the following components:

  77. Summary Compensation Table

    | Named Executive Officer | Year | Insurance Premiums | 401(k) Match | Other (a) | Total | | | | ($) | ($) | ($) | ($) | | David W. Moon | 2023 | 442 | — | 176 | 618 | | Robert Yu Lang Mao | 2023 | 13,743 | 9,900 | — | 23,643 | | | 2022 | 16,250 | 9,150 | 298 | 25,698 | | | 2021 | 19,058 | 8,700 | 481 | 28,239 | | Joshua Ballard | 2023 | 13,110 | 8,991 | 176 | 22,277 | | | 2022 | 13,110 | 9,150 | 298 | 22,558 | | | 2021 | 11,910 | 8,700 | 481 | 21,091 | | Rodney Clemente | 2023 | 8,565 | 9,900 | 601 | 19,067 | | | 2022 | 8,565 | 9,150 | 298 | 18,013 | | | 2021 | 7,951 | 8,700 | 481 | 17,132 | | Farshad Ghasripoor | 2023 | 21,424 | 9,000 | 176 | 30,600 | | | 2022 | 21,424 | 9,000 | 298 | 30,722 | | | 2021 | 17,301 | 8,700 | 132 | 26,133 | | William W. Yeung | 2023 | 16,513 | 9,900 | — | 26,413 | | | 2022 | 16,513 | 9,150 | 1,484 | 27,147 | | | 2021 | 12,252 | 8,700 | 481 | 21,433 |

  78. Summary Compensation Table

    (a)Other Compensation in fiscal year 2022 and 2021 includes cash value of certain gifts awarded. (5)On October 23, 2023, Mr. Moon was appointed as Interim President and CEO. The annual base salary for Mr. Moon represents the number of months of service for the period beginning on October 23, 2023 through December 31, 2023. In addition to the annual base salary, Mr. Moon was granted RSUs valued at $279,983 in October 2023. In January 2024, Mr. Moon was appointed as President and CEO. (6)Mr. Mao was appointed the President and CEO on May 5, 2020 and served as the interim President and CEO since November 1, 2019. On October 23, 2023, Mr. Mao departed as President and CEO. Mr. Mao’s annual salary for 2023 represents the number of months of service to the Company for the period beginning on January 1, 2023 through October 23, 2023. (7)In addition to the 2022 annual equity incentive award of $349,996, Mr. Ballard was granted additional RSUs valued at $149,993 in March 2022. In addition to the 2021 annual equity incentive award of $325,248, Mr. Ballard was granted additional stock options valued at $49,996 in July 2021. (8)In addition to the 2023 annual equity incentive award of $881,300, Mr. Clemente was granted additional RSUs valued at $399,986 in October 2023. In addition to the 2022 annual equity incentive award of $349,991, Mr. Clemente was granted additional RSUs valued at $149,993 in March 2022. (9)In addition to the 2023 annual equity incentive award of $741,066, Mr. Ghasripoor was granted additional RSUs valued at $399,986 in October 2023. (10)In addition to the 2022 annual equity incentive award of $299,989, Mr. Yeung was granted additional RSUs valued at $149,993 in March 2022. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 71

  79. Pay Versus Performance

    Pay Versus Performance The follow table provides a description of (a) the relationship between executive compensation actually paid (“CAP”) to the Company’s NEOs including the Company’s principal executive officer (“PEO”) and the Company’s cumulative total shareholder return (“TSR”) and (b) the TSR relationship between the Company and the peer group and (c) the Company’s net income and operating income over each of the four most recently completed fiscal years. The Compensation Committee makes executive compensation decisions independent of SEC disclosure requirements. For a discussion of the Company’s decision making process, please see “Compensation Discussion and Analysis” above.

  80. Pay Versus Performance

    | Year | Principal Executive Officer (1) | | Other Named Executive Officers (2) | | Value of Initial Fixed $100 Investment Based On: | | Net Income | Operating Income | | | Summary Compensation Table | Compensation Actually Paid (3) | Summary Compensation Table | Compensation Actually Paid (4) | Total Shareholder Return (5) | Peer Group Total Shareholder Return (6) | | | | | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | | (In thousands, except value of initial fixed investment which are presented in whole dollars) | | | | | | | | | 2023 | 2,159 | 1,886 | 1,519 | 1,289 | 192.44 | 177.93 | 21,504 | 19,050 | | 2022 | 2,033 | 2,123 | 1,008 | 1,004 | 209.30 | 136.03 | 24,049 | 24,829 | | 2021 | 2,007 | 4,671 | 859 | 1,736 | 219.51 | 161.44 | 14,269 | 13,831 | | 2020 | 2,092 | 3,266 | 834 | 1,110 | 139.33 | 118.52 | 26,387 | 31,294 |

  81. Pay Versus Performance

    (1)Includes the compensation actually paid (“CAP”) of all PEOs (current and previous). For fiscal year 2023, the Company’s PEOs were Messrs. Moon and Mao. Mr. Moon was Interim President and CEO for October 23, 2023 through December 31, 2023 and Mr. Mao was President and CEO from January 1, 2023 through October 23, 2023; salary compensation and equity awards granted related to their Board memberships have been excluded from the above table. For fiscal years 2020 through 2022, Mr. Mao was the Company’s only PEO. (2)Includes average CAP of all NEOs (current and previous) excluding the Company’s PEO. For fiscal years 2021 through 2023, NEOs other than the PEO consisted of Messrs. Ballard, Clemente, Ghasripoor and Yeung. For fiscal year 2020, NEOs other than the PEO consisted of Messrs. Ballard, Clemente and Ghasripoor, and Ms. Emily Smith. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 72 (3)In accordance with SEC rules, the following adjustments were made to determine the CAP on the Company’s PEOs during fiscal years 2020 through 2023, which consist solely of adjustments to the PEOs’ equity awards. Since Mr. Mao remains on the Board through the 2024 Annual Meeting and continues to provide service to the Company, the change in fair value of his outstanding awards are based on the Company’s share value as of December 31, 2023.

  82. Pay Versus Performance

    | | | Deductions | Adjustments | | | | | | Year | Summary Compensation Table | Stock Awards Granted in the Year | Fair Value of Equity Awards Granted in the Year and Unvested at Year End | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Total Adjustments from Amounts Presented in the Summary Compensation Table * | Total Compensation * | | | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | | (In thousands) | | | | | | | | 2023 | 2,159 | (1,579) | 1,167 | (251) | 390 | (273) | 1,886 | | 2022 | 2,033 | (1,000) | 1,218 | (101) | (28) | 89 | 2,123 | | 2021 | 2,007 | (1,001) | 2,161 | 978 | 525 | 2,664 | 4,671 | | 2020 | 2,092 | (1,224) | 2,430 | — | (32) | 1,174 | 3,266 |

  83. Pay Versus Performance

    *Amounts may not total due to rounding. (4)In accordance with SEC rules, the following adjustments were made to determine the CAP on average to the Company’s non-PEO NEOs during fiscal years 2020 through 2023, which consist solely of adjustments to the non-PEO NEOs’ equity awards.

  84. Pay Versus Performance

    | | | Deductions | Adjustments | | | | | | Year | Summary Compensation Table | Stock Awards Granted in the Year | Fair Value of Equity Awards Granted in the Year and Unvested at Year End | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Total Adjustments from Amounts Presented in the Summary Compensation Table * | Total Compensation * | | | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | | (In thousands) | | | | | | | | 2023 | 1,519 | (979) | 729 | (70) | 90 | (230) | 1,289 | | 2022 | 1,008 | (444) | 508 | (31) | (37) | (4) | 1,004 | | 2021 | 859 | (331) | 629 | 388 | 191 | 877 | 1,736 | | 2020 | 834 | (337) | 450 | 172 | (9) | 276 | 1,110 |

  85. Pay Versus Performance

    *Amounts may not total due to rounding. (5)Cumulative total shareholder return of the Company’s common stock for each fiscal year from 2020 through 2023, respectively. Assumes the investment of $100 in the Company’s common stock on December 31, 2019 and the reinvestment of dividends, if any, although dividends have never been declared on the Company’s common stock. (6)Cumulative total shareholder return of the Company’s peer group used in 2023, as discussed above under “Compensation Discussion and Analysis,” for each fiscal year from 2020 through 2023, respectively. Assumes the investment of $100 on December 31, 2019 and the reinvestment of dividends. In addition, the weighting of the market value of companies denominated in foreign current are revalued using the current foreign exchange rate. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 73

  86. Grants of Plan-Based Awards in 2023

    Grants of Plan-Based Awards in 2023 The following table sets forth information concerning non-equity and equity incentive plan awards to the Company’s NEOs during 2023. The non-equity incentive plan consists of the 2023 cash incentive plan described in the “Compensation Discussion and Analysis” section above. The actual amounts realized in accordance with the non-equity incentive plan are reported in the “Summary Compensation Table” under the column entitled “Non-Equity Incentive Plan Compensation.” During 2023, the Company did not grant any stock option awards.

  87. Grants of Plan-Based Awards in 2023

    | | | Estimated future payouts under non-equity incentive plan awards | | | All other stock awards: Number of shares of stock or units | All other option awards: Number of securities underlying options | Base price of stock awards or fair value of option awards | Grant date fair value of stock and option awards (1)(2) | | Named Executive Officer | Grant Date | Threshold | Target | Maximum | | | | | | | | ($) | ($) | ($) | (#) | (#) | ($/Sh) | ($) | | David W. Moon (3) | 10/24/23 | — | — | — | 15,233 | — | 18.38 | 279,983 | | Robert Yu Lang Mao (4) (5) | 1/30/23 | — | (5) | — | 14,012 | — | 21.41 | 299,997 | | | 7/25/23 | — | — | — | 32,695 | — | 30.55 | 998,832 | | Joshua Ballard (4) | 1/30/23 | — | 224,184 | — | 8,173 | — | 21.41 | 174,984 | | | 7/25/23 | — | — | — | 21,531 | — | 30.55 | 657,772 | | Rodney Clemente (4) (6) | 1/30/23 | — | 229,883 | — | 8,173 | — | 21.41 | 174,984 | | | 7/25/23 | — | — | — | 23,120 | — | 30.55 | 706,316 | | | 10/24/23 | — | — | — | 21,762 | — | 18.38 | 399,986 | | Farshad Ghasripoor (4) (6) | 1/30/23 | — | 189,760 | — | 7,589 | — | 21.41 | 162,480 | | | 7/25/23 | — | — | — | 18,939 | — | 30.55 | 578,586 | | | 10/24/23 | — | — | — | 21,762 | — | 18.38 | 399,986 | | William W. Yeung (4) | 1/30/23 | — | 199,886 | — | 7,006 | — | 21.41 | 149,998 | | | 7/25/23 | — | — | — | 16,674 | — | 30.55 | 509,391 |

  88. Grants of Plan-Based Awards in 2023

    (1)Amounts reflect the aggregate grant date fair value of option awards granted in 2023, calculated in accordance with ASC 718 without regard to estimated forfeitures. See Note 12 of the Notes to Consolidated Financial Statements included in the Company’s 2023 Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024, for a discussion of assumptions made in determining the grant date fair value of these option awards. See the “Outstanding Equity Awards as of December 31, 2023” table for information regarding the vesting schedule of such option awards. (2)Amounts reflect the aggregate grant date fair value of RSU awards calculated in accordance with ASC 718 without regard to estimated forfeitures. The grant date fair value of each award is measured based on the closing price of the Company’s common stock on the date of grant, unless there is no closing price on the date of grant, in which case it is based on the closing price on the trading day last preceding the date of grant. See the “Outstanding Equity Awards as of December 31, 2023” table for information regarding the vesting schedule of such RSU awards. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 76 (3)In October 2023, Mr. Moon received equity awards related to his appointment as the Interim President and CEO. Mr. Moon was not eligible to earn a cash award. See the section entitled “Annual Cash Incentive Compensation” table for more information regarding 2023 cash awards. (4)In 2023, under the Company’s non-equity incentive plan, Mr. Mao was eligible to earn a cash award in an amount not to exceed 81.9% of his annual salary; Messrs. Ballard, Ghasripoor and Yeung each were eligible to earn a cash award in an amount not to exceed 60% of their annual salary; and Mr. Clemente was eligible to earn a cash award in an amount not to exceed 65% of his annual salary. See the section entitled “Annual Cash Incentive Compensation” table for more information regarding 2023 cash awards. (5)In October 2023, Mr. Mao departed as President and Chief Executive Officer and consequently was no longer eligible to receive a non-equity incentive plan award. (6)In October 2023, Messrs. Clemente and Gharispoor each received an additional RSU award that fully vests on the 1st anniversary following the date of grant.

  89. Outstanding Equity Awards as of December 31, 2023

    Outstanding Equity Awards as of December 31, 2023 The following table presents certain information concerning equity awards held by the Company’s NEOs as of December 31, 2023.

  90. Outstanding Equity Awards as of December 31, 2023

    | | | Option Awards (1) | | | | Stock Awards (1) | | | Named Executive Officer | Date of Grant | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of shares or units of stock that have not vested | Market value of shares or units of stock that have not vested (2) | | | | (#) | (#) | ($) | | (#) | ($) | | David W. Moon(3) | 7/10/23 | | | | | 3,232 | 60,891 | | (4) | 10/24/23 | | | | | 15,233 | 286,990 | | | | — | — | | | 18,465 | 347,881 | | Robert Yu Lang Mao(5) | 2/6/15 | 44,456 | — | 3.53 | 2/6/25 | | | | (5) | 6/23/15 | 53,392 | — | 2.92 | 6/23/25 | | | | (5) | 6/23/16 | 15,327 | — | 8.60 | 6/23/26 | | | | (5) | 6/22/17 | 16,726 | — | 7.71 | 6/22/27 | | | | (5) | 6/14/18 | 15,879 | — | 8.49 | 6/14/28 | | | | (5) | 6/13/19 | 21,303 | — | 9.98 | 6/13/29 | | | | (6) | 5/20/20 | 9,317 | 23,294 | 7.79 | 5/20/30 | | | | (6) | 5/20/20 | 2,083 | 5,209 | 7.79 | 5/20/30 | | | | (6) | 2/1/21 | 7,980 | 55,865 | 13.96 | 2/1/31 | | | | (6) | 1/28/22 | 64,822 | 70,459 | 18.99 | 1/28/32 | | | | (9) | 1/30/23 | | | | | 14,012 | 263,986 | | (8) | 7/25/23 | | | | | 32,695 | 615,974 | | (5) | 10/26/23 | | | | | 4,153 | 78,243 | | | | 251,285 | 154,827 | | | 50,860 | 958,203 |

  91. Outstanding Equity Awards as of December 31, 2023

    Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 77

  92. Outstanding Equity Awards as of December 31, 2023

    | | | Option Awards (1) | | | | Stock Awards (1) | | | Named Executive Officer | Date of Grant | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of shares or units of stock that have not vested | Market value of shares or units of stock that have not vested (2) | | | | (#) | (#) | ($) | | (#) | ($) | | Joshua Ballard(7) | 8/13/18 | 186,393 | — | 9.27 | 8/13/28 | | | | (7) | 1/31/19 | 20,800 | — | 7.60 | 1/31/29 | | | | (7) | 1/31/20 | 53,295 | 1,134 | 10.21 | 1/31/30 | | | | (7) | 2/1/21 | 44,092 | 18,156 | 13.96 | 2/1/31 | | | | (7) | 7/26/21 | 3,840 | 2,516 | 20.86 | 7/26/31 | | | | (7) | 1/28/22 | 22,687 | 24,661 | 18.99 | 1/28/32 | | | | (8) | 3/7/22 | | | | | 5,274 | 99,362 | | (9) | 1/30/23 | | | | | 8,173 | 153,979 | | (8) | 7/25/23 | | | | | 21,531 | 405,644 | | | | 331,107 | 46,467 | | | 34,978 | 658,985 | | Rodney Clemente(7) | 1/31/20 | 13,107 | 611 | 10.21 | 1/31/30 | | | | (7) | 2/1/21 | 23,742 | 9,777 | 13.96 | 2/1/31 | | | | (7) | 1/28/22 | 11,343 | 12,331 | 18.99 | 1/28/32 | | | | (9) | 1/31/20 | | | | | 4,285 | 80,729 | | (9) | 2/1/21 | | | | | 6,268 | 118,089 | | (9) | 1/28/22 | | | | | 6,912 | 130,222 | | (8) | 3/7/22 | | | | | 5,274 | 99,362 | | (9) | 1/30/23 | | | | | 8,173 | 153,979 | | (8) | 7/25/23 | | | | | 23,120 | 435,581 | | (10) | 10/24/23 | | | | | 21,762 | 409,996 | | | | 48,192 | 22,719 | | | 75,794 | 1,427,958 | | Farshad Ghasripoor(7) | 2/2/17 | 1,119 | — | 10.19 | 2/2/27 | | | | (7) | 1/31/20 | 26,648 | 567 | 10.21 | 1/31/30 | | | | (7) | 2/1/21 | 22,046 | 9,078 | 13.96 | 2/1/31 | | | | (7) | 1/28/22 | 10,533 | 11,450 | 18.99 | 1/28/32 | | | | (9) | 1/31/20 | | | | | 3,979 | 74,964 | | (9) | 2/1/21 | | | | | 5,820 | 109,649 | | (9) | 1/28/22 | | | | | 6,418 | 120,915 | | (9) | 1/30/23 | | | | | 7,589 | 142,977 | | (8) | 7/25/23 | | | | | 18,939 | 356,811 | | (10) | 10/24/23 | | | | | 21,762 | 409,996 | | | | 60,346 | 21,095 | | | 64,507 | 1,215,312 |

  93. Outstanding Equity Awards as of December 31, 2023

    Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 78

  94. Outstanding Equity Awards as of December 31, 2023

    | | | Option Awards (1) | | | | Stock Awards (1) | | | Named Executive Officer | Date of Grant | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of shares or units of stock that have not vested | Market value of shares or units of stock that have not vested (2) | | | | (#) | (#) | ($) | | (#) | ($) | | William W. Yeung(7) | 6/20/16 | 46,331 | — | 8.95 | 6/20/26 | | | | (7) | 2/2/17 | 21,867 | — | 10.19 | 2/2/27 | | | | (7) | 2/1/18 | 31,807 | — | 7.50 | 2/1/28 | | | | (7) | 1/31/19 | 30,293 | — | 7.60 | 1/31/29 | | | | (7) | 1/31/20 | 22,547 | 480 | 10.21 | 1/31/30 | | | | (7) | 2/1/21 | 18,654 | 7,682 | 13.96 | 2/1/31 | | | | (7) | 1/28/22 | 9,723 | 10,570 | 18.99 | 1/28/32 | | | | (9) | 1/31/20 | | | | | 3,367 | 63,434 | | (9) | 2/1/21 | | | | | 4,925 | 92,787 | | (9) | 1/28/22 | | | | | 5,924 | 111,608 | | (8) | 3/7/22 | | | | | 5,274 | 99,362 | | (9) | 1/30/23 | | | | | 7,006 | 131,993 | | (8) | 7/25/23 | | | | | 16,674 | 314,138 | | | | 181,222 | 18,732 | | | 43,170 | 813,322 |

  95. Outstanding Equity Awards as of December 31, 2023

    (1)Includes unvested options awards and stock awards for shares, subject to time vesting, granted under the 2008 Equity Incentive Plan, the 2016 Incentive Plan and the 2020 Incentive Plan. (2)The market values of the RSU awards that have not vested are calculated by multiplying the number of shares underlying the RSU awards shown in the table by $18.84, the closing price of the Company’s common stock on December 29, 2023, the last trading day of fiscal 2023. (3)Mr. Moon received an equity award in connection with his service as an independent Director of the Board. These awards vest at the earlier of 1-year following the date of the grant or on the date of the 2024 Annual Meeting. (4)Mr. Moon received RSU awards of 15,233 shares of the Company’s common stock in connection with his appointment as Interim President and CEO. These RSU awards were granted under the 2020 Incentive Plan with 100% vesting on the first anniversary following the date of grant. (5)Mr. Mao receive an equity award in connection with his service as an independent Director of the Board. These awards vest at the earlier of 1-year following the date of the grant or on the date of the 2024 Annual Meeting. (6)Mr. Mao was appointed the President and CEO on May 5, 2020 and served as the interim President and CEO since November 1, 2019. These stock options were granted under the 2016 Equity Incentive Plan or the 2020 Incentive Plan, with 25% vesting on the first anniversary following the date of grant, and 1/48th each month thereafter. These stock options are fully vested 4-years following the date of grant and unexercised vested options expire 10-years from date of grant. (7)These stock options were granted under the 2008 Equity Incentive Plan, 2016 Equity Incentive Plan, or the 2020 Incentive Plan with 25% vesting on the first anniversary following the date of grant, and 1/48th of the total award each month thereafter. These stock options are fully vested 4-years following the date of grant and unexercised vested stock options expire 10-years from date of grant. (8)These RSUs were granted under the 2020 Incentive Plan with 33⅓% vesting on each of the first three anniversaries following the date of grant. (9)These RSUs were granted under the 2016 Equity Incentive Plan or the 2020 Incentive Plan with 25% vesting on each of the first four anniversaries following the date of grant. (10)These RSUs were granted under the 2020 Incentive Plan with 100% vesting on the anniversary following the date of grant. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 79

  96. Option Exercises and Stock Vested in 2023

    Option Exercises and Stock Vested in 2023 The table below provides supplemental information regarding option exercises and stock award vested by the Company’s NEOs during fiscal year 2023.

  97. Option Exercises and Stock Vested in 2023

    | | Option Awards | | Stock Awards | | | Named Executive Officer | Number of shares acquired on exercise | Value realized on exercise | Number of shares acquired on vesting | Valued realized on vesting (1) | | | (#) | ($) | (#) | ($) | | Robert Yu Lang Mao (2) | 361,399 | 2,491,737 | — | — | | Joshua Ballard | 15,000 | 214,212 | 7,983 | 179,459 | | Rodney Clemente | 31,373 | 593,803 | 17,705 | 393,597 | | Farshad Ghasripoor | 51,131 | 1,040,375 | 14,374 | 317,158 | | William W. Yeung | — | — | 14,963 | 333,022 |

  98. Option Exercises and Stock Vested in 2023

    (1)Represents the number of shares acquired on vesting multiplied by the fair market value of the Company’s common stock as reported by the NASDAQ on the applicable date of vesting. (2)Mr. Mao exercised vested employee stock options awarded while he was the President and CEO.

  99. CEO Pay Ratio

    CEO Pay Ratio For fiscal year 2023, the ratio of the median of the annual total compensation of all of the Company’s employees other than the Company’s President and CEO (“Median Annual Compensation”) to the combined annual total compensation of Mr. Moon, the Company’s current President and CEO, and Mr. Mao, the Company’s former President and former CEO, (“CEO Compensation”) was 16.92 to 1. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S‑K using the data and assumptions summarized below. In this summary, the Company refers to the employee who received such Median Annual Compensation, who was selected in a manner consistent with Item 402(u) of Regulation S-K, as the “Median Employee.” For purposes of this disclosure, the date used to identify the Median Employee was December 31, 2023 (the “Determination Date”) and the 2023 Median Annual Compensation was $126,265, which was calculated by totaling all applicable elements of compensation of the Company’s Median Employees in accordance with Item 402(c)(2)(x) of Regulation S‑K for fiscal year 2023. When calculating the Median Annual Compensation, the Company first determined its U.S. and non-U.S. employee population as of the Determination Date. The Company then measured the compensation of these 253 employees, which represented all full-time employees using the employee’s 1) annualized base wage; 2) value of equity compensation awarded; and 3) non-equity compensation earned in 2023. Table of Contents Energy Recovery, Inc. — 2024 Proxy Statement | 80 The CEO Compensation for purposes of this disclosure represents the sum of the annualized base salary for Mr. Moon and Mr. Mao prorated for the period of service reported for Mr. Moon and Mr. Mao under the “Base Salaries of Named Executive Officers Table” and the sum of the value of equity awards and non-equity compensation earned, reported under the “Summary Compensation Table” for fiscal year 2023.