DEF 14A of Stem, Inc., Apr 19, 2024

DEF 14A of Stem, Inc.

Filed Apr 19, 2024 · FY20230001758766-24-000069

Open on EDGAR

  1. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS Our Board is currently divided into three classes, with members of each class holding office for staggered three-year terms. There are currently three Class III directors who are up for election at the Annual Meeting to serve for a term expiring at the 2027 Annual Meeting of Stockholders; two Class I directors, whose terms expire at the 2025 Annual Meeting of Stockholders; and three Class II directors, whose terms expire at the 2026 Annual Meeting of Stockholders, in all cases until their successors have been duly elected and qualified or until the earlier of their resignation or removal. Our Board has nominated David Buzby, John Carrington and Michael C. Morgan for election as Class III directors. They have indicated that they are willing and able to serve as directors. However, if any of them becomes unable or, for good cause, unwilling to serve, proxies may be voted for the election of such other person as will be designated by our Board, or the Board may decrease the size of the Board.

  2. Information Regarding Director Nominees and Continuing Directors

    Information Regarding Director Nominees and Continuing Directors Biographical and other information regarding our director nominees and directors continuing in office, including the primary skills and experiences considered by our Nominating, Governance and Sustainability Committee (the “Nominating Committee”) in determining to recommend them as nominees, is set forth below.

  3. Information Regarding Director Nominees and Continuing Directors

    | Name | Class | Age (as of April 19) | Position | | David Buzby (2) | III | 64 | Independent Chairman of the Board | | John Carrington | III | 57 | Chief Executive Officer and Director | | Ira Birns (1) | II | 61 | Independent Director | | Adam E. Daley (1) | II | 47 | Independent Director | | Michael C. Morgan (2) | III | 55 | Independent Director | | Anil Tammineedi (1),(3) | II | 47 | Independent Director | | Laura D’Andrea Tyson (3) | I | 76 | Independent Director | | Jane Woodward (2),(3) | I | 64 | Independent Director | | Gerard Cunningham | I | 60 | Independent Director |

  4. Information Regarding Director Nominees and Continuing Directors

    _______________ (1)Member of the Audit Committee. (2)Member of the Compensation Committee. (3)Member of the Nominating Committee.

  5. Information Regarding Director Nominees and Continuing Directors

    | Class III Director Nominees | | | | DAVID BUZBY INDEPENDENT CHAIRMAN OF THE BOARD MEMBER, COMPENSATION COMMITTEE | | PROFILE | CAREER HIGHLIGHTS | | Mr. Buzby has served as a member of our Board since the closing of our IPO in April 2021, and served on the Legacy Stem board of directors from April 2010 until our IPO. In April 2021 he was appointed Chairman of our Board. Mr. Buzby is qualified to serve as a director due to his extensive experience in the climate transition sector and as a director on the boards of other public companies. | Chairman of Wondrall Group Ltd., a UK-based developer of integrated software and hardware systems designed to reduce energy costs and create net-zero homes, 2023 – present Investment Advisory Committee Member at the PRIME Coalition, a 501(c)(3) charity focused on accelerating climate technology, 2016 – 2022 Founding Investor and CEO of Bright Plain Renewable Energy, LLC, a company focused on the acquisition and management of solar projects, 2011 – 2016 | | | Founding Investor & Director of SunRun Inc. (Nasdaq: RUN), North America’s leading residential solar energy company, 2008 – 2012 Founding Investor, Chairman and CEO of SunEdison, Inc (formerly NYSE: SUNE), until its sale in 2009. North America’s leading commercial and utility scale solar energy company, 2004 – 2009 Founding Investor & Director of Valueclick, Inc. (formerly Nasdaq: CNVR), an online marketing company, 1998 – 2014 Founding Investor, Director, & Chief Financial Officer of Best Internet, a shared server web hosting company, 1995 – 1999 | | | OTHER COMPANY BOARDS | | | Public Companies: Spring Valley Acquisition Corp. II (Nasdaq: SVIIU), a special purpose acquisition company focused on sustainability, 2022 – present Climate Transition Capital Acquisition (AEX: CTCA 1), 2021 – 2023 Private Companies: Leading Edge Equipment Technologies, a developer of solar panel technology, 2017 – 2023 Cambrian Innovation Inc., a provider of wastewater treatment and resource recovery solutions, 2016 – 2020 | | | EDUCATION | | | BA, Middlebury College MBA, Harvard Business School |

  6. Information Regarding Director Nominees and Continuing Directors

    | | JOHN CARRINGTON CHIEF EXECUTIVE OFFICER AND DIRECTOR | | PROFILE | CAREER HIGHLIGHTS | | Mr. Carrington has served as our Chief Executive Officer and a member of our Board since the closing of our initial public offering in April 2021, and was our Chief Executive Officer and a member of the board of directors of Legacy Stem from December 2013 until our IPO. Mr. Carrington leads the energy storage and analytics movement at the Company. Mr. Carrington is qualified to serve as a director due to his extensive executive experience in the energy, technology, and industrials sectors spanning over 25 years. Additionally, as CEO of Stem, he possesses a deep knowledge of our business operations, financial strategy, and operational strategy, as well as the industry, all of which enhance his contributions to our Board. The Board believes that Mr. Carrington’s service as the Company’s Chief Executive Officer is an important link between management and the Board, enabling the Board to perform its oversight function with the benefit of his perspectives on the Company’s business and operations. | CEO of Stem, Inc., 2013 – present CEO & Director of MiaSolé, a leading developer of copper indium gallium selenide (CIGS) thin-film photovoltaic products, 2011 – 2013 Executive Vice President of Marketing & Business Development of First Solar, a provider of photovoltaic solar solutions, April 2008 – December 2009 General Manager & Chief Marketing Officer of GE Plastics, a subsidiary of General Electric Company, 1991 – 2008 | | | EDUCATION | | | BS, Economics, University of Colorado |

  7. Information Regarding Director Nominees and Continuing Directors

    | | MICHAEL C. MORGAN INDEPENDENT DIRECTOR CHAIR, COMPENSATION COMMITTEE | | PROFILE | CAREER HIGHLIGHTS | | Mr. Morgan has served as a member of our Board since the closing of our IPO in April 2021, and he served as the chairman of the board of directors of STPK from August 2020 until our IPO. Mr. Morgan is qualified to serve as a director due to his extensive experience in the energy infrastructure and clean energy sectors, corporate finance, capital markets and M&A, and corporate development and strategy, as well as his extensive experience as a director on other public company boards. | President & CEO of Portcullis Partners, LP, a private investment partnership and limited partner of Triangle Peak Partners, 2004 – present Triangle Peak Partners, LP, a multi-strategy asset management firm focused on venture capital and growth equity • CEO, 2008 – 2022 • Chairman, 2008 – present Kinder Morgan, Inc. (NYSE: KMI), one of the largest energy infrastructure companies in North America • Lead Director, 2011 – present • President, 2001 – 2004 • Head of Corporate Development, 1997 – 2001 Co-Chair at Precourt Energy Institute Advisory Council, 2014 – present | | | OTHER COMPANY BOARDS | | | Sunnova Energy International, Inc. (NYSE: NOVA), a solar company, 2015 – present Kinder Morgan, Inc. (NYSE: KMI), an energy infrastructure company, 2003 – present Star Peak Corp. II (formerly NYSE: STPC), merged with Benson Hill, a sustainable food technology company, January 2021 – September 2021 | | | EDUCATION | | | BA, Economics, Stanford University MA, Sociology, Stanford University MBA, Harvard Business School |

  8. Information Regarding Director Nominees and Continuing Directors

    A nominee will be elected as a director at the Annual Meeting if the nominee receives a plurality of the votes cast “FOR” his election. “Plurality” means that the individuals who receive the largest number of votes cast “FOR” are elected as directors. Broker non-votes, if any, will not be counted as votes cast on this proposal and will have no effect on the outcome of the election.

  9. Recommendation of the Board

    Recommendation of the Board The Board recommends a vote “FOR” the election of each Class III director nominee set forth above.

  10. Recommendation of the Board

    | Class I Directors Continuing in Office |

  11. Recommendation of the Board

    | | LAURA D’ANDREA TYSON INDEPENDENT DIRECTOR CHAIR, NOMINATING COMMITTEE | | PROFILE | CAREER HIGHLIGHTS | | Dr. Tyson has been a member of our Board since the closing of our IPO in April 2021. Dr. Tyson is qualified to serve as a director due to her extensive experience in public company board and governance, technology and energy industries, economics and public policy, advisory in various business and political arenas, and her accomplishment at the highest levels of government service. Dr. Tyson was a member of President Clinton's cabinet from 1993 to 1996 and was the first woman to serve in the positions of Chair of the President's Council of Economic Advisors, from 1993 to 1995, and Director of the White House National Economic Council, from 1995 to 1996. She is a regular opinion columnist for Project Syndicate, an international media group that publishes on its website and in numerous print publications around the world. Dr. Tyson has held numerous advisory roles, such as Senior Advisor to the Rock Creek Group since 2009 and to APAX Partners since 2021. She is a Senior External Advisor to the McKinsey Global Institute and an Advisory Board member at the Morgan Stanley Institute for Sustainable Investing. Dr. Tyson was a member of the Commission d'experts sur les grands dѐfis ѐconomiques for French President Emmanuel Macron from 2020-2021. She has served as an advisory board member of Generation Investment Management since 2005, and Angeleno Group since 2019. She is the co-chair of the California Governor's Council of Economic Advisors. Other government roles include membership on the US President's Council of Advisors on Science and Technology (Semiconductor Working Group) from 2016 to 2017, US Department of State Foreign Affairs Policy Board (2011 to 2013); President Obama’s Council on Jobs from 2011 to 2013, and the US President's Economic Recovery Advisory Board from 2009 to 2011. | University of California, Berkeley •Distinguished Professor of the Graduate School and Professor Emeritus of the Haas School of Business, 2016 – present •Faculty Director and Interim Faculty Director of the Haas School’s Institute for Business and Social Impact, 2013 – 2020 •Ex-Officio Board Member, Haas School of Business, 2020 – present •Interim Dean of the Haas School of Business, July 2018 – December 2018 •Professor of Business Administration and Economics at the Haas School of Business, 1992 – 2016 •Dean of the Haas School of Business, 1998 – 2001 •Chair of the Board of Trustees and a Steering Committee Member of the Blum Center for Developing Economies, 2006 – present •Dean of the London Business School, University of London, 2002 – 2006 | | | OTHER PUBLIC COMPANY BOARDS | | | Silver Springs Networks, Inc. (NYSE: SSNI), 2009 – 2018 AT&T Inc. (NYSE: T), 1999 – 2020 CBRE Group, Inc. (NYSE: CBRE), 2010 – April 2022 Morgan Stanley (NYSE: MS), 1997 – 2016 | | | EDUCATION | | | BA, Economics, Smith College Ph.D., Economics, Massachusetts Institute of Technology |

  12. Recommendation of the Board

    | | JANE WOODWARD INDEPENDENT DIRECTOR MEMBER, COMPENSATION COMMITTEE AND NOMINATING COMMITTEE | | PROFILE | CAREER HIGHLIGHTS | | Ms. Woodward has served as a member of our Board since the closing of our IPO in April 2021. Ms. Woodward is qualified to serve as a director due to her extensive private sector experience in numerous areas within the energy and renewables industries, as well as three decades of energy-related teaching experience. Prior to founding MAP and teaching at Stanford, Ms. Woodward worked as an exploration geologist with ARCO Exploration Company and later as a petroleum engineering consultant to Stanford University's endowment. | Managing Partner of WovenEarth, a fund of funds focused on early-stage venture and niche project development, 2022 – present Founding Partner of MAP Energy, LLC, a firm focusing on energy investing and manages one the largest private mineral portfolios in the U.S., 1986 – present Adjunct Professor of Civil & Environmental Engineering at Stanford University, where she has taught energy classes for more than 30 years, 1991 – present Member of Precourt Institute for Energy Advisory Council at Stanford University, an institute that seeks to help the creativity, collaboration, learning, and leadership needed for the global energy transformation, 2006 – present | | | OTHER COMPANY BOARDS | | | Public Companies: None Private Companies: Ambient Fuels, a green hydrogen project developer, 2022 – present Fervo Energy, an enhanced geothermal project developer, 2021 – present Project Canary, an emissions intelligence data platform, 2021 – present | | | EDUCATION | | | BA, Geological Sciences, University of California, Santa Barbara MS, Applied Earth Science, Stanford University MBA, Stanford University |

  13. Recommendation of the Board

    | | GERARD CUNNINGHAM INDEPENDENT DIRECTOR | | PROFILE | CAREER HIGHLIGHTS | | Mr. Cunningham has served as a member of our Board since April 2024 upon appointment by the Board. Mr. Cunningham is qualified to serve as a director due to his extensive expertise spanning climate technology, software services (SaaS), and artificial intelligence. His background as a technology entrepreneur and co-head of McKinsey’s cleantech consulting team uniquely positions him to contribute valuable insights and strategic guidance to our Board. | Partner at McKinsey & Company, a multinational strategy and management consulting firm, 2019 – April 2024, where he co-founded its global clean technology practice and launched its AI for Sustainability service line Founder and CEO at Winistry, an AI-powered web and mobile hyper-personalization platform, 2016 – 2019 Founder and CEO at Koolbit, an AI-powered mobile game-as-a-service studio, 2011 – 2016 Board Member at Kabam, an AI-driven mobile game-as-a-service studio, 2009 – 2011 Founder and President at FanDuel (f/k/a Betfair USA), a leading regulated online gaming operator, 2008 – 2010 Entrepreneur in Residence at Shasta Ventures, a venture capital firm, 2008 Chief Marketing Officer at Lands’ End, a U.S. apparel retailer, 2006 – 2008 Vice President, Operating Strategy, at Gap, Inc., a clothing and accessories retailer, 2001 – 2006, where he spearheaded its digital transformation initiatives Chief Marketing Officer and Vice President, Product (Data Science), at Evant, a provider of AI-powered supply chain optimization solutions, 1997 – 2000 Principal, Internet Practice, at Booz & Company, a global strategy consulting company, 1991 – 1997 Group Manager, Marketing, at Procter & Gamble, a multinational consumer goods company, 1986 – 1991 | | | EDUCATION | | | BSc, Mathematics, The University of Manchester MSc, Operations Research, Strathclyde Business School |

  14. Recommendation of the Board

    | Class II Directors Continuing in Office | | | | IRA BIRNS INDEPENDENT DIRECTOR CHAIR, AUDIT COMMITTEE | | PROFILE | CAREER HIGHLIGHTS | | Mr. Birns has served as a member of our Board since November 2023. Mr. Birns is qualified to serve as a director due to his extensive experience in management, finance and accounting, as well as his significant experience in M&A, capital markets, investor relations and in the energy sector, including renewable fuels and power. | Executive Vice President & Chief Financial Officer at World Kinect Corp. (f/k/a World Fuel Services Corporation) (NYSE: WKC), a management company that provides energy procurement and related services to commercial and industrial customers in the aviation, marine and land transportation industries, 2007 – present Vice President – Treasurer at Arrow Electronics, Inc. (NYSE: ARW), a global provider of technology products, services and solutions to technology manufacturers and service providers. •Vice President and Treasurer, 2002 – 2007 •Treasurer, 1996 – 2002 •Assistant Treasurer, 1989 – 1996 | | | EDUCATION | | | BBA Public Accounting, Hofstra University Certified Public Accountant Certified Treasury Professional |

  15. Recommendation of the Board

    | | ADAM E. DALEY INDEPENDENT DIRECTOR MEMBER, AUDIT COMMITTEE | | PROFILE | CAREER HIGHLIGHTS | | Mr. Daley has served as a member of our Board since the closing of our IPO in April 2021, and was a member of the STPK board of directors from 2020 until our IPO. Mr. Daley is qualified to serve as a director due to his broad transactional experience in the energy, energy infrastructure and renewables sectors, his strong strategic focus and his financial expertise, all of which enable him to make valuable contributions to Stem’s financial and strategic planning and industry competitiveness. | Co-Founder & Managing Partner at Elda River Capital Management, LLC, a real assets investment firm focusing on energy transition and infrastructure opportunities, 2024 – present Partner, Co-Head of Magnetar’s Energy & Infrastructure Group, and Member of the Management Committee and Investment Committee at Magnetar Capital LLC, a leading alternative investment management firm, 2005 – 2024 Investment Banker at Global Corporate & Investment Bank of Citigroup, 1999 – 2005 | | | OTHER COMPANY BOARDS | | | Public Companies: Star Peak Corp. II (formerly NYSE: STPC), merged with Benson Hill, a sustainable food technology company, January 2021 – September 2021 Private Companies: PosiGen, PBC., a residential solar and energy efficiency company, 2021 – present Vesper Energy Development LLC, a developer and operator of utility-scale renewable energy and energy storage assets, 2020 – present Double Eagle Energy III, LLC, an energy exploration, development, and production company, 2018 – present DoublePoint Energy, LLC, a developer of energy assets, 2018 – present | | | EDUCATION | | | BS, Finance, with High Honors from the University of Illinois |

  16. Recommendation of the Board

    | | ANIL TAMMINEEDI INDEPENDENT DIRECTOR MEMBER, AUDIT COMMITTEE AND NOMINATING COMMITTEE | | PROFILE | CAREER HIGHLIGHTS | | Mr. Tammineedi has served as member of our Board since the closing of our IPO in April 2021, and was a member of the Legacy Stem board of directors from 2019 until our IPO. Mr. Tammineedi is qualified to serve as a director due to his extensive experience in the technology sector and with high-growth and clean energy companies, and as a director on the boards of other companies, as well as his financial expertise. | Partner at the Angeleno Group, LLC, a leading global investment firm, focused on high-growth clean energy and climate solutions companies, where he has been leading investments across a number of sectors, including sustainable mobility, energy storage, resource efficiency, and smart infrastructure, 2008 – present Senior Faculty Advisor and Lecturer on Impact Investing and Entrepreneurship at UCLA Anderson School of Management, 2019 – present Various product development and management roles at Broadcom, Inc., a semiconductor company, focused on semiconductors targeting communications, mobile, and power management applications, 1997 – 2006 | | | OTHER COMPANY BOARDS | | | Public Companies: None Private Companies: Fictiv (observer), a digital manufacturing software platform for customer manufacturing mechanical parts, 2022 – present Locana, a geospatial location and mapping company focused on enterprise GIS products and services, 2016 – 2023 Patriot Environmental Services, Inc., an environmental services company specializing in wastewater, emergency response and industrial services, 2016 – 2022 | | | EDUCATION | | | MBA, UCLA Anderson School of Management MS, Electrical and Computer Engineering, Iowa State University Kauffman Fellow |

  17. Strong Alignment Between Company Performance and CEO Compensation

    Strong Alignment Between Company Performance and CEO Compensation Our compensation program is designed to deliver more compensation to our executives when our stock price increases and lower compensation when our stock price decreases. This is evidenced by comparing our CEO’s Compensation Actually Paid (as defined in the Pay Versus Performance section, below) to our CEO’s total compensation as shown in the Summary Compensation Table, which shows grant date fair values of our LTI awards that do not reflect changes in our stock price after the awards are made. For example, in 2023, the Summary Compensation Table total compensation to our CEO was $3.8 million, while Compensation Actually Paid to our CEO was negative $6.1 million (and negative $13.2 million in 2022), primarily due to a decline in our stock price during those years, which caused the value of LTI awarded in the beginning of 2023 and in prior years to decrease significantly. In addition, our CEO’s 2023 PSU award was similarly negatively affected by a significant reduction in our stock price. As stated above, as of March 31, 2024, none of our CEO’s PSUs have been earned. For clarity, the 2023 LTI awards made to our CEO were made on February 24, 2023 when our stock price was $7.82 and had a total grant date fair value of $2.81 million. At the end of 2023 our stock price was $3.88 and these 2023 equity awards had an intrinsic value of $408,424, which is 85% lower than their grant date fair value.

  18. Philosophy and Objectives

    Philosophy and Objectives Our success is highly dependent on our ability to attract, engage and retain executives who possess the skills, competencies and passion that are consistent with our vision. To this end, we have developed our compensation program with the following overarching principles: •the pay of our NEOs and other executive officers should be strongly linked to performance that is evaluated against pre-established financial and strategic objectives, and should balance incentivizing performance, promoting retention and maximizing stockholder value. •the higher an executive’s position in the Company, the greater the percentage of compensation that is “at risk.” At-risk compensation refers to long-term incentive (“LTI”) awards and annual cash incentive opportunity because such compensation is subject to forfeiture and/or fluctuate based on our performance. We believe that having a significant portion of our executives’ compensation at risk more closely aligns their interests with those of the Company and of our stockholders. •our executive compensation program should enable us to recruit, develop, motivate and retain top talent, both in the short-term and long-term. •stock ownership guidelines, which require our executive officers to hold Stem stock, should further align the interests of our executives with those of our other stockholders. Periodically, the Compensation Committee reviews the objectives and components of our executive compensation program to ensure they continue to align with these principles. To establish compensation parameters for our NEOs, our Compensation Committee evaluated each element of compensation separately and the total direct compensation for each NEO, and considered the information provided by Pearl Meyer & Partners, LLC (the Committee’s independent compensation consultant for the first part of 2023) and Frederic W. Cook & Co., Inc. (the Committee’s independent compensation consultant for the latter part of 2023, for the applicable period, our “Compensation Consultant”). Based on this review and analysis, our Compensation Committee concluded that, for fiscal year 2023, overall base salaries, target annual cash incentives, and the target value of LTI awards were competitive as compared to companies in our compensation peer group (discussed below).

  19. Best Practices

    | What We Do | What We Don’t Do | | Performance-Based Short-Term Incentive Awards – 100% of our executives’ target 2023 short-term incentive opportunity is based on achieving rigorous quantitative Company financial goals. | No annual cash incentive payouts for below minimum performance achievement. No hedging of Stem stock by executive officers or directors. | | Stock Ownership Guidelines – We maintain stock ownership requirements for our executives and directors. | No repricing or exchanging of stock options without stockholder approval. | | Mandatory Retention of Shares – Executives must retain 50% of the net shares they acquire upon the exercise of stock options and the vesting of RSUs, until they achieve the required ownership level under our stock ownership guidelines | No dividends on stock options and no dividends on unvested awards. No excise tax gross-ups. | | Alignment – Align the compensation of our NEOs to the long-term performance of our common stock, with emphasis on at-risk pay. | | | Peer Group Analysis – Conduct an annual review of our compensation philosophy and our compensation practices as compared to a peer group and survey data. | |

  20. Elements of 2023 Total Direct Compensation

    | TYPE | ELEMENT | KEY FEATURES | HOW THIS ELEMENT SUPPORTS OUR STRATEGY | PERFORMANCE-BASED? | AT RISK? | | Fixed | Base Salary | Only compensation element that is fixed | Provides a base level of competitive cash compensation when all other pay elements are variable or contingent | No | No | | Short-Term | Annual Cash Incentive | Payout is 100% based on achievement of rigorous quantitative financial goals | Incentivizes performance of key objectives | Yes | Yes | | | RSUs | Time vesting, subject to continued employment on the vesting date | Promotes stability and retention of our executive team | No | Yes | | Long-Term | Stock Options | Have value only when the stock price is higher than the exercise price | Aligns interests of our executive officers with our stockholders | Yes | Yes | | | PSUs (CEO Only) | Earned if pre-determined performance targets are achieved | Rewards long-term financial results and aligns with stockholder value creation | Yes | Yes |

  21. Elements of 2023 Total Direct Compensation

    * For a reconciliation of adjusted EBITDA to net loss on a GAAP basis, see Appendix A. Although these four metrics remained unchanged from our 2022 Annual Incentive Plan (the “2022 AIP”), the Committee approved changes in the relative weightings of the performance metrics to align with our strategy. The Committee increased the weighting for the adjusted EBITDA metric compared to the 2022 AIP (from 20% to 30%) to focus our executive team on the Company’s long-standing goal of achieving positive adjusted EBITDA; similarly, the Committee increased the weighting for the CARR metric (from 20% to 25%) to better align with the Company’s goal of expanding its higher-margin software-enabled service offerings. When considering the Company’s operating results for purposes of the annual cash incentive, the Compensation Committee may take into account unusual or infrequent charges or gains, depending on the nature of the item. The Compensation Committee exercises this discretion when it believes that our executives would inappropriately benefit from, or would be inappropriately penalized by, such items. The table below summarizes the 2023 performance metrics, weighting per metric, the threshold and target goals per metric, actual attainment per metric (as a percentage of the target goal) and attainment expressed as a percentage of target. If a metric is achieved at a level between defined achievement levels, the Committee performs a linear interpolation to determine the award earned for that metric. No cash incentive is earned as to any metric if we do not achieve the threshold performance level for that metric.

  22. Elements of 2023 Total Direct Compensation

    | Metric | Weighting | Performance Threshold (70%) | Performance Target (100%) | Actual Performance | Attainment (% of Performance Target) | % of Target Bonus (2) | | Adjusted EBITDA (1) | 30% | $(28.6M) | $(20.0M) | $(19.5M) | 102% | 110% | | CARR | 25% | $59.5M | $85.0M | $91.0M | 107% | 110% | | Revenue | 20% | $420.0M | $600.0M | $461.5M | 77% | 77% | | Contracted Backlog | 25% | $1,295.0M | $1,850.0M | $1,929.3M | 104% | 110% | | Approved Payout | | | | | | 85% |

  23. Elements of 2023 Total Direct Compensation

    | NEO | Target Bonus (as a % of Base Salary) | Earned 2023 AIP Bonus ($) | Number of Shares Earned(1) | | Mr. Carrington | 110% | 514,250 | 191,884 | | Mr. Bush | 75% | 270,938 | 101,096 | | Mr. Laureles | 65% | 221,000 | 82,462 | | Mr. Patel | 65% | 207,188 | 77,308 |

  24. Elements of 2023 Total Direct Compensation

    (1) The number of shares of common stock paid to each NEO was determined by dividing their earned 2023 AIP bonus amount by $2.68, the closing price of our common stock on February 29, 2024. Chief Revenue Officer Bonus Plan (Mr. Russo only) Mr. Russo participates in the Chief Revenue Officer Bonus Plan (the “CRO Plan”) instead of the 2023 AIP. The CRO Plan provided an opportunity for Mr. Russo to earn a cash incentive for achievement of performance targets relating to gross margins of bookings and revenue. The numerical targets pertaining to Mr. Russo’s CRO Plan are not being disclosed because we believe such disclosure would cause substantial competitive harm without adding to a meaningful understanding of our executive compensation program. However, we believe his targets were difficult to achieve and were set at levels necessary to drive stockholder value. Pursuant to the CRO Plan, Mr. Russo earned a payout of 91% of target. Long-Term Equity Incentive Awards Overview LTI awards are designed to give NEOs and our other executives a longer-term stake in the Company, provide incentives for the creation of sustained stockholder value, act as long-term retention and motivation tools, and directly tie employee and stockholder interests over the longer term. Our 2023 LTI awards to NEOs other than our CEO were in the form of 50% stock options and 50% RSUs. Our CEO received 2023 LTI awards in the form of 50% PSUs, 25% RSUs, and 25% stock options. In consultation with the Compensation Consultant, the Compensation Committee annually evaluates the type and mix of LTI awards to be granted. The Compensation Committee believes that our LTI program for our NEOs is well-aligned with stockholders, which is demonstrated by the significantly lower values disclosed in the “Compensation Actually Paid” compared to the values reported in the Summary Compensation Table during years in which the Company share price decreased (see the Pay vs. Performance table beginning on page 63). As the Company continues to mature, the Compensation Committee is actively considering the introduction of additional types of performance-based LTI awards for all executives, including making PSU grants to executive officers other than our CEO. The Compensation Committee believes that establishing a longer record of performance as a public company will allow the Compensation Committee to better evaluate additional types of performance-based LTI awards and associated longer-term metrics and targets. RSUs The Compensation Committee believes that RSUs are an important element in an executive’s LTI mix because RSUs align the interests of our executive officers with those of our stockholders and help manage the dilutive effect of our equity compensation program. Our RSUs are subject to service-based vesting. Because RSUs have value even in the absence of stock price appreciation, RSUs help us retain and incentivize employees during periods of market volatility, and also result in our granting fewer shares of common stock than through stock options of equivalent grant date fair value. Unlike our RSUs granted in 2022, which vest over a four-year period, our RSUs granted in 2023 vest annually over a three-year period. The Compensation Committee approved this change based on its review of market data and in consultation with the Compensation Consultant to align more closely with peer practices. The Compensation Committee believes that, as with stock options, RSUs help incentivize our executive officers to build value that can be sustained over time. On April 12, 2023, Mr. Bush was awarded an additional grant of 298,804 RSUs (in addition to his 2023 annual RSU grant) to recognize his differentiated impact as Chief Financial Officer. Such RSUs will vest 100% on April 12, 2026, subject to his continued employment through such date. PSUs (CEO only) Mr. Carrington, our CEO, was the sole recipient of a PSU award in 2023 (the “2023 CEO PSUs”). The award, the target dollar value of which was $2.0 million and was granted on February 24, 2023, will be earned, if at all, based upon the Company’s common stock achieving certain pre-determined price targets. Fifty percent of the 2023 CEO PSUs will be earned if our common stock reaches a price target of at least $12.50 for 30 consecutive trading days during the three-year performance period beginning January 1, 2023 and ending December 31, 2025. The remaining 50% of the 2023 CEO PSUs will be earned if our common stock reaches a price target of at least $15.00 for 30 consecutive trading days during the same period. Solely to the extent earned, the 2023 CEO PSUs will vest on December 31, 2025, subject to Mr. Carrington’s continued employment on such date. No shares will be issued under the 2023 CEO PSUs if we do not achieve the applicable stock price targets during the performance period. As of March 31, 2024, none of the 2023 CEO PSUs have been earned, demonstrating the challenging nature of the performance goals and the Company’s focus on strengthening pay-for-performance alignment. To earn 100% or more of the 2023 CEO PSUs, the Company’s closing stock price of $1.86 on March 26, 2024 must increase by 806% over the remaining one year and nine months of the performance period. The grant of 2023 CEO PSUs was the first time the Company had ever awarded PSUs to an executive officer. In deciding to grant the 2023 CEO PSUs, the Compensation Committee considered various factors, including (1) the existing mix of cash and equity compensation awarded to Mr. Carrington, (2) the desire to more closely align his equity compensation package with the Company’s commitment to stockholder value creation, and (3) the fact that he received no LTI award in 2022. The Compensation Committee used the Company’s stock price as the performance metric for the 2023 CEO PSUs because it most directly measures the Company’s objective of generating stockholder value and delivering financial results in the near term. Additionally, the Compensation Committee chose the performance period beginning January 1, 2023 and ending December 31, 2025 in order to further incentivize Mr. Carrington in alignment with stockholder interests during a critical juncture of our growth. Stock Options While the 2023 CEO PSUs further align our CEO’s compensation with the stock price returns experienced by our stockholders and encourage achievement of strategic and financial goals that support our long-term stock performance, the Compensation Committee also believes that stock options are a similar form of performance-based compensation because the value of stock options is tied solely to the Company’s stock price, and any decline in the Company’s stock price should also have a negative impact on our executives’ pay. Starting in 2023, our stock options vest over a three-year period, rather than a four-year period. Similar to the corresponding change made for our RSUs, the Compensation Committee approved the three-year vesting period to align more closely with peer company practice. Because these options typically vest over a three-year period and expire after 10 years, they incentivize our executive officers to increase stockholder value that can be sustained over time. Therefore, the Compensation Committee believes that options, with an exercise price equal to (or greater than) the closing price of our common stock on the date of grant, are inherently performance-based and are an effective tool to motivate our executive officers to build stockholder value. Target Value of 2023 LTI Awards

  25. Elements of 2023 Total Direct Compensation

    When determining the amount of LTI awards granted to an NEO, the Company considers the executive’s experience, level of responsibilities, and contributions to the success of the Company, as well as market data and internal pay equity. In addition to rewarding our NEOs based on personal and Company performance, equity awards have also served to retain the services of such executives since they are subject to time-based vesting conditions. The Compensation Committee approved the following LTI awards to our NEOs in 2023, based on market data and internal pay equity, and other factors set forth below the table. Except as described below, the awards were granted on February 15, 2023 in connection with the Company’s annual LTI award cycle, will vest in three annual installments (33%/33%/34%) beginning on February 15, 2024, and, in the case of options, have an exercise price of $10.25.

  26. Elements of 2023 Total Direct Compensation

    | NEO | Target Value of 2023 Grants (1) | Number of RSUs Granted | Number of Options Granted | Number of PSUs Granted | | Mr. Carrington (2) | $4,000,000 | 105,264 | 135,502 | 210,527 | | Mr. Bush (3) | $4,300,000 | 446,172 | 190,375 | — | | Mr. Laureles | $2,000,000 | 105,263 | 135,982 | — | | Mr. Russo | $1,900,000 | 100,000 | 129,183 | — | | Mr. Patel | $1,900,000 | 100,000 | 129,183 | — |

  27. Elements of 2023 Total Direct Compensation

    (1) See “Executive Compensation Tables—Grants of Plan-Based Awards” beginning on page 56 for the grant date fair value of each grant, computed in accordance with applicable accounting standards. (2) Mr. Carrington’s RSU, PSU, and option grants were made on February 24, 2023. See “PSUs (CEO only),” above, for a description of the material terms of Mr. Carrington’s PSU grant, none of which are earned as of March 31, 2024. Although granted on February 24, 2023, Mr. Carrington’s stock options also have an exercise price of $10.25, which is higher than the closing price of our common stock on February 24, 2023 of $7.82. (3) Includes 147,368 RSUs awarded on February 15, 2023 as part of the 2023 LTI grants and 298,804 RSUs awarded on April 12, 2023, as discussed above. Additional information regarding the equity awards granted to NEOs in 2023, 2022, and 2021 is set forth below in the “Summary Compensation Table,” “Grants of Plan-Based Awards” table, and the “Outstanding Equity Awards at 2023 Fiscal-Year End” table, below, beginning on pages 55, 56 and 57, respectively.

  28. Process for Setting Executive Compensation

    Process for Setting Executive Compensation Peer Group Companies The Compensation Committee considers formal executive compensation survey data prepared or provided by our Compensation Consultant (including custom cuts of survey data from Radford) when it reviews and determines executive compensation. The Compensation Committee also considers the executive compensation practices at various “peer group” companies when evaluating changes to the Company’s executive compensation program. To prepare for its executive compensation analysis, the Company’s executive compensation department works with our Compensation Consultant to match Company positions and responsibilities against survey positions and responsibilities and to compile the annual compensation data for each executive officer. The purpose of our peer group comparison and Radford data is to ensure that our total executive compensation package operates effectively and remains both reasonable and competitive. The Compensation Committee’s selection criteria for companies comprising our 2023 peer group included: •high-growth energy technology companies in the United States, with a focus on energy storage system, battery technology, clean energy, and artificial intelligence companies serving the utilities sectors or major commercial and industrial enterprises, or both; •companies with global operations; •companies with high valuation multiples and fast growth trajectories; •companies with revenues up to $1.5 billion, market capitalization between $1 billion and $10 billion, and over 600 employees; and •potential competition for executive talent. In arriving at these selection criteria, the Committee recognized that, due to the recently public nature of many companies reviewed for inclusion in the peer group, revenues at such companies were still growing, and market capitalizations were very volatile. For these reasons, revenue and market capitalization ranges approved by the Compensation Committee were somewhat wider than would normally be seen for more mature companies. The Compensation Committee, with the assistance of our Compensation Consultant, annually reviews specific criteria and recommendations regarding companies to add to or remove from the comparator groups. As a general matter, the Company selects suitable comparator companies such that Stem is near the median of the companies in the peer group in terms of estimated revenue in the then-current year and then-current market capitalization. Applying the criteria above, the Compensation Committee approved the following companies as our executive compensation peer group, effective for 2023 compensation decisions:

  29. Process for Setting Executive Compensation

    (1) Volta Inc. was acquired in March 2023 by Shell Oil Inc. For 2023, Fluence Energy, Inc. was added to our peer group due to business overlap. The Compensation Committee reassesses the executive compensation peer group when appropriate to reflect, for instance, consolidation between comparator companies or other industry changes and other developments. In approving our peer group for 2024 compensation decisions, the Compensation Committee made adjustments to our peer group to reflect our lower market capitalization. Similarly, in making our 2024 compensation decisions, the Compensation Committee considered the impact of our lower market capitalization on our equity incentive plan share reserve and, accordingly, adjusted downward the size of executive equity awards. Compensation Committee Review Our Compensation Committee reviews the elements of our NEOs’ total direct compensation throughout the year, to evaluate whether each element remains competitive and is aligned with our internal pay equity. In making compensation decisions, the Compensation Committee relies on its own judgment after reviewing external market data, and also considers the following factors: •the executive’s scope of responsibilities, as well as leadership, management and technical expertise, growth potential, and position in our reporting structure; •overall Company and individual performance; •retention needs; •the recommendations of our CEO (except with respect to his own compensation); •feedback received during our stockholder engagements; and •internal pay equity. In February of each year, the Compensation Committee evaluates all elements of executive officer compensation, after reviewing the prior year’s results and the achievement of Company financial objectives. The purpose of this annual evaluation is to determine whether any changes in an officer’s compensation may be appropriate. The CEO does not participate in the Compensation Committee’s deliberations regarding his own compensation. At the Compensation Committee’s request, the CEO reviews with the Compensation Committee the performance of the other executive officers. Our Compensation Committee gives substantial weight to the CEO’s evaluations and recommendations because he is particularly able to assess the other executive officers’ performance and contributions. Our Chief People Officer assists the CEO in developing the other executives’ performance reviews and reviewing external market data to determine the CEO’s executive compensation recommendations for other executive officers. The Compensation Committee annually reviews the base salary of our CEO in executive session and recommends his base salary to the independent members of the Board for approval, based on the criteria described above. The CEO presents his recommendations for his leadership team for base salary adjustments to the Compensation Committee for their review and approval. Independent Compensation Consultant Our Compensation Committee has retained our Compensation Consultant as its independent consultant with respect to executive compensation matters, as well as non-employee director compensation matters. Our Compensation Consultant works with our management team to: •Review and develop our executive compensation peer group; •Compile annual total direct compensation data for each executive officer, and to compare the compensation opportunities of our executive officers with those at comparable roles at companies in our peer group; •Conduct an analysis of competitive non-employee director compensation levels and market trends using the same peer group; •Assist in the design of the short- and long-term incentive plans; •Work any other related compensation needs; and •Participate in each compensation committee meeting. Our Compensation Consultant reports only to, and acts solely at the direction of, our Compensation Committee. The Compensation Committee assessed the independence of both Compensation Consultants engaged during 2023 (both Pearl Meyer & Partners, LLC and Frederic W. Cook & Co., Inc. during their respective periods of engagement) pursuant to SEC rules and concluded that their work did not raise any conflict of interest that would prevent our Compensation Consultants from independently representing our Compensation Committee. Other Compensation Plans Health and Welfare Plans and 401(k) Plan. The NEOs are eligible to participate in the Company’s employee benefit plans and programs, including medical and dental benefits, flexible spending accounts, long-term care benefits, and short- and long-term disability and life insurance, to the same extent as the Company’s other full-time employees, subject to the terms and eligibility requirements of those plans. The NEOs also participate in our 401(k) plan, subject to limits imposed by the Internal Revenue Code, to the same extent as the Company’s other full-time employees. Other Benefits. We do not maintain any defined benefit pension plans or any nonqualified deferred compensation plans. Limited Perquisites. We provide only limited perquisites to our NEOs. None of our NEOs received $10,000 or more of perquisites or other personal benefits from the Company in 2023.

  30. Summary Compensation Table

    Summary Compensation Table The following table sets forth information concerning the compensation paid to our NEOs:

  31. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | John Carrington Chief Executive Officer | 2023 | 550,600 | 2,172,642 (6) | 633,540 | 514,250 | 13,200 | 3,884,232 | | | 2022 | 550,215 | 999,999 | 978,778 | 611,340 | — | 3,140,333 | | | 2021 | 475,795 | 37,815,664 | 1,654,948 | 594,825 | 24,760 | 40,565,992 | | William Bush Chief Financial Officer | 2023 | 425,600 | 3,010,518 | 1,264,642 | 270,938 | 13,200 | 4,984,898 | | | 2022 | 425,712 | 874,995 | 856,424 | 322,090 | — | 2,479,221 | | | 2021 | 374,167 | 2,938,958 | 661,980 | 315,000 | 19,231 | 4,309,336 | | Saul Laureles Chief Legal Officer and Corporate Secretary (8) | 2023 | 400,600 | 1,078,946 | 903,315 | 221,000 | 13,200 | 2,617,061 | | | 2022 | 374,844 | 1,041,932 | 660,674 | 246,304 | — | 2,323,754 | | Alan Russo Chief Revenue Officer (8) | 2023 | 350,600 | 1,025,000 | 858,150 | 316,943 (7) | — | 2,550,693 | | Prakesh Patel Chief Strategy Officer (8) | 2023 | 375,600 | 1,025,000 | 858,150 | 207,188 | — | 2,465,938 |

  32. Summary Compensation Table

    _______________ (1)Amounts reflect salary actually paid to the NEOs in the years shown. (2)Amounts reflect the aggregate grant date fair value of time-vested RSUs granted to the NEOs in the years shown, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“ASC Topic 718”), and based on the closing price of our common stock on the date of grant. These amounts may not correspond to the actual value eventually realized by each NEO because the value depends on the market value of our common stock at the time the award vests. See Note 16, “Stock-Based Compensation,” to our audited financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information regarding these amounts. (3)Amounts reflect the aggregate grant date fair value of option awards granted to the NEOs in the years shown, computed in accordance with ASC Topic 718. This amount reflects the accounting grant date value of such awards and does not correspond to actual value that may be realized by the NEOs in the future. A description of the methodologies and assumptions we use to value option awards, and the manner in which we recognize the related expense, are described in Note 16, “Stock-Based Compensation,” to our audited financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2023. The NEOs may never realize any value from these stock options and, to the extent that they do, the amounts realized may have no correlation to the amounts reported above. (4)Amounts reflect annual cash incentives earned by the NEOs for the years shown under the 2023 AIP, pursuant to which the NEOs were each eligible to receive annual cash incentives determined as a percentage of their respective base salaries based on the achievement of pre-established financial and operational metrics. For 2023, the annual cash incentives earned by the NEOs in respect of the 2023 AIP were paid in fully vested shares of our stock. (5)Amounts for 2023 reflect Company matching contributions to the NEO's 401(k) accounts. (6)Total amount of $2,172,642 includes (a) a grant date fair value for 2023 RSUs of $823,164 pursuant to our 2023 LTI awards, and (b) a grant date fair value for the 2023 CEO PSUs of $1,349,478, which was calculated based on the probable outcome of the performance conditions using a Monte Carlo simulation valuation method. Assuming maximum performance, the grant date value of the 2023 CEO PSUs would be $1,646,321. (7)Amount representing 91% of Mr. Russo’s base salary, paid in cash pursuant to the achievement of pre-established financial and operational metrics in the CRO Plan in which he participated in lieu of the 2023 AIP. (8)Mr. Russo and Mr. Patel were not NEOs prior to 2023 and Mr. Laureles was not an NEO prior to 2022; thus, no amounts are reported for such NEOs prior to such years.

  33. 2023 Grants of Plan-Based Awards

    2023 Grants of Plan-Based Awards The following table sets forth information with respect to plan-based awards granted to our NEOs in 2023.

  34. 2023 Grants of Plan-Based Awards

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) (3) | All Other Option Awards: Number of Securities Underlying Options (#) (4) | Exercise or Base Price of Option Awards ($/Share) (5) | Grant Date Fair Value of Stock and Option Awards ($) (6) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | John Carrington | | $423,500 | $605,000 | $756,250 | | | | | | | | | | 2/24/2023 | | | | | | | | 135,502 | $10.25 | $633,540 | | | 2/24/2023 | | | | | | | 105,264 | | | $823,164 | | | 2/24/2023 | | | | 105,263 | 210,527 | 210,527 | | | | $1,349,478 | | William Bush | | $223,125 | $318,750 | $398,438 | | | | | | | | | | 2/15/2023 | | | | | | | | 190,375 | $10.25 | $1,264,642 | | | 2/15/2023 | | | | | | | 147,368 | | | $1,510,522 | | | 4/12/2023 | | | | | | | 298,804 | | | $1,499,996 | | Saul Laureles | | $182,000 | $260,000 | $325,000 | | | | | | | | | | 2/15/2023 | | | | | | | | 135,982 | $10.25 | $903,315 | | | 2/15/2023 | | | | | | | 105,263 | | | $1,078,946 | | Alan Russo (7) | | — | $350,000 | — | | | | | | | | | | 2/15/2023 | | | | | | | | 129,183 | $10.25 | $858,150 | | | 2/15/2023 | | | | | | | 100,000 | | | $1,025,000 | | Prakesh Patel | | $170,625 | $243,750 | $304,688 | | | | | | | | | | 2/15/2023 | | | | | | | | 129,183 | $10.25 | $858,150 | | | 2/15/2023 | | | | | | | 100,000 | | | $1,025,000 |

  35. 2023 Grants of Plan-Based Awards

    _______________ (1)These columns show the possible cash incentive payouts for each NEO for fiscal year 2023 based on performance goals set for the year. Threshold, target, and maximum possible payouts are based on the annual cash incentive range established for each NEO, which is expressed as a percentage of base salary for the year. Threshold amounts are payable only if minimum performance goals are met. Actual cash incentive amounts earned for 2023 are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table and such amounts were paid in the form of fully vested shares of common stock. For information about the 2023 cash incentive paid to our NEOs, see “Compensation Discussion and Analysis—Elements of 2023 Compensation—Annual Cash Incentive Awards.” (2)These columns represent the 2023 CEO PSUs granted to Mr. Carrington, which are eligible to vest based on the achievement of relevant stock price goals. The threshold amount represents the number of PSUs eligible to vest if our common stock reaches a price target of $12.50 for 30 consecutive trading days during the three-year performance period beginning January 1, 2023 and ending December 31, 2025, and the target and maximum amounts represent the total number of PSUs (inclusive of the threshold amounts) eligible to vest if our common stock reaches a price target of $15.00 for 30 consecutive trading days during such performance period. (3)The RSUs granted to the NEOs vest 33% / 33% / 34% over a three-year period, subject to such executive’s continued employment with the Company, except that the RSUs granted to Mr. Bush on April 12, 2023 vest 100% on April 12, 2026, subject to his continued employment with the Company. (4)Stock options granted to the NEOs vest 33% / 33% / 34% over a three-year period. (5)Stock option exercise prices reflect the closing price of Stem common stock on February 15, 2023. Mr. Carrington’s stock options were granted on February 24, 2023, but also have an exercise price of $10.25 (which is higher than the closing price of Stem common stock on February 24, 2023 of $7.82) so as to remain aligned with our other NEOs’ stock options. (6)Dollar amount reported reflects the grant date fair value, in each case computed in accordance with FASB ASC Topic 718. See the footnotes to the Summary Compensation Table and Note 16, “Stock-Based Compensation,” to our audited financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2023 for the relevant assumptions used to determine the valuation of our stock and option awards. (7)The amount reported in this row represents the target payout under Mr. Russo’s CRO Plan equal to 100% of his base salary.

  36. Outstanding Equity Awards at 2023 Fiscal-Year End

    Outstanding Equity Awards at 2023 Fiscal-Year End The following table sets forth additional information regarding outstanding and unexercised stock options and outstanding RSUs for each of our NEOs as of December 31, 2023:

  37. Outstanding Equity Awards at 2023 Fiscal-Year End

    | | | Option Awards | | | | Stock Awards (1) | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)* | | John Carrington | 02/08/2015 | 206,184 | — | 0.97 | 02/07/2025 | | | | | 02/08/2015 | 3,381 | — | 0.97 | 02/07/2025 | | | | | 10/28/2015 | 777,150 | — | 1.25 | 10/27/2025 | | | | | 10/22/2019 | 1,165,455 | — | 2.41 | 10/21/2029 | | | | | 12/03/2020 | 204,600 | — | 6.81 | 12/02/2030 | | | | | 12/03/2020 | 587,124 | 195,708 | 6.81 | 12/02/2030 | | | | | 05/28/2021 | 49,329 | 49,329 | 25.34 | 05/28/2031 | | | | | 03/01/2022 | 41,867 | 125,603 | 9.33 | 03/01/2032 | | | | | 02/24/2023 (3) | — | 135,502 | 10.25 | 02/24/2033 | | | | | 07/02/2021(2) | | | | | 1,000,000 | 3,880,000 | | | 07/02/2021 | | | | | 19,732 | 76,560 | | | 03/01/2022 | | | | | 80,386 | 311,898 | | | 02/24/2023(8) | | | | | 105,263 | 408,420 | | | 02/24/2023(3) | | | | | 105,264 | 408,424 | | William Bush | 05/30/2017 | 6 | — | 1.67 | 05/30/2027 | | | | | 10/22/2019 | 194,558 | — | 2.41 | 10/21/2029 | | | | | 12/03/2020 | 256,482 | 85,495 | 6.81 | 12/02/2030 | | | | | 12/03/2020 | 99,608 | — | 6.81 | 12/02/2030 | | | | | 05/28/2021 | 19,731 | 19,732 | 25.34 | 05/28/2031 | | | | | 03/01/2022 | 36,633 | 109,902 | 9.33 | 03/01/2032 | | | | | 02/15/2023 (3) | — | 190,375 | 10.25 | 2/15/2033 | | | | | 07/02/2021 (4) | | | | | 65,000 | 252,200 | | | 07/02/2021 | | | | | 7,893 | 30,625 | | | 03/01/2022 | | | | | 70,338 | 272,911 | | | 02/15/2023 (3) | | | | | 147,368 | 571,788 | | | 04/12/2023 (5) | | | | | 298,804 | 1,159,360 | | Saul Laureles | 05/28/2021 | 17,265 | 17,265 | 25.34 | 05/28/2031 | | | | | 03/01/2022 | 28,260 | 84,782 | 9.33 | 03/01/2032 | | | | | 02/15/2023 (3) | — | 135,982 | 10.25 | 02/15/2033 | | | | | 03/01/2022 | | | | | 54,261 | 210,533 | | | 07/02/2021 | | | | | 6,906 | 26,795 | | | 07/28/2022 (9) | | | | | 34,325 | 133,181 | | | 02/15/2023 (3) | | | | | 105,263 | 408,420 | | Alan Russo | 05/28/2021 | 7,091 | 7,091 | 25.34 | 05/28/2031 | | | | | 03/01/2022 | 26,167 | 78,501 | 9.33 | 03/01/2032 | | | | | 02/15/2023 (3) | — | 129,183 | 10.25 | 02/15/2033 | | | | | 07/02/2021 (6) | | | | | 65,000 | 252,200 | | | 07/02/2021 | | | | | 8,509 | 33,015 | | | 03/01/2022 | | | | | 50,241 | 194,935 | | | 02/15/2023 (3) | | | | | 100,000 | 388,000 | | Prakesh Patel | 07/21/2015 | 32,137 | — | 1.25 | 07/21/2025 | | | | | 10/28/2015 | 303,145 | — | 1.25 | 10/28/2025 | | | | | 10/22/2019 | 291,632 | — | 2.41 | 10/22/2029 | | | | | 12/03/2020 | 99,608 | — | 6.81 | 12/03/2030 | | | | | 05/28/2021 | 17,265 | 17,265 | 25.34 | 05/28/2031 | | | | | 03/01/2022 | 26,167 | 78,501 | 9.33 | 03/01/2032 | | | | | 02/15/2023 (3) | — | 129,183 | 10.25 | 02/15/2033 | | | | | 07/02/2021 (7) | | | | | 65,000 | 252,200 | | | 07/02/2021 | | | | | 6,906 | 26,795 |

  38. Outstanding Equity Awards at 2023 Fiscal-Year End

    | 03/01/2022 | 50,241 | 194,935 | | 02/15/2023 (3) | 100,000 | 388,000 |

  39. Outstanding Equity Awards at 2023 Fiscal-Year End

    * Market values in these columns were determined by multiplying the number of shares of stock by $3.88, the closing price of our common stock on December 29, 2023, the last trading day of the year. (1)On April 27, 2021, our stockholders approved the 2021 Plan. Prior to that date, equity awards were granted under the Stem, Inc. 2009 Equity Incentive Plan (the “2009 Plan”). Following the adoption of the 2021 Plan, no further grants of awards have been made or will be made under the 2009 Plan. Unless otherwise noted below, options disclosed in this table generally vest over four years, with 25% of the option vesting on the one-year anniversary of the vesting commencement date and 1/48th of the option vesting monthly thereafter through the four-year anniversary of the vesting commencement date, subject to the NEO's continued employment with the Company through the applicable vesting dates, except that stock options granted on March 1, 2022 vest in four equal annual installments beginning on the one-year anniversary of the grant date subject to the NEO's continued employment with the Company through the applicable vesting dates. Unless otherwise noted below, stock awards disclosed in this table are in the form of RSUs and generally vest in four equal annual installments beginning on the first anniversary of the grant date. (2)Mr. Carrington was awarded an equity grant in connection with the closing of the Merger (a “Closing Grant”) of 1,000,000 RSUs in recognition of his leadership in closing the Merger and for retention purposes. To promote retention of Mr. Carrington during our critical transition to a public company, his Closing Grant will vest over seven years, with the first 3/7th of his award (43%) “cliff” vesting on April 28, 2024 and 1/7th vesting each anniversary thereafter, subject to Mr. Carrington’s continued employment with the Company on such vesting dates. (3)Options and RSUs granted on February 15, 2023 and February 24, 2023 vest in three annual installments (33% / 33% / 34%) beginning on the first anniversary of the grant date. (4)Mr. Bush was awarded a Closing Grant of 65,000 RSUs in recognition of his leadership in closing the Merger. The RSU vests 100% on April 28, 2024, subject to his continued employment with the Company on such date. (5)Mr. Bush was awarded a grant of 298,804 RSUs on April 12, 2023 to recognize his differentiated impact as Chief Financial Officer, which will vest on 100% on April 12, 2026, subject to his continued employment with the Company on such date. (6)Mr. Russo was awarded a Closing Grant of 65,000 RSUs in recognition of his leadership in closing the Merger and for retention purposes. The RSU vests 100% on April 28, 2024, subject to his continued employment with the Company on such date. (7)Mr. Patel was awarded a Closing Grant of 65,000 RSUs in recognition of his leadership in closing the Merger and for retention purposes. The RSU vests 100% on April 28, 2024, subject to his continued employment with the Company on such date. (8)Represents the 2023 CEO PSUs which are currently unearned and may be earned based on the Company’s achievement of share price hurdles during the three-year performance period ending December 31, 2025. Amounts shown reflect the number of PSUs that can be earned upon achieving the threshold share price of $12.50 for 30 consecutive trading days (50% of the PSUs granted). (9)Mr. Laureles was awarded 34,325 RSUs that vested 100% on January 28, 2024, subject to his continued employment with the Company on such date.

  40. Option Exercises and Stock Vested in 2023

    Option Exercises and Stock Vested in 2023 The following table provides additional information about options exercised and RSUs vested for our NEOs in the fiscal year ended December 31, 2023:

  41. Option Exercises and Stock Vested in 2023

    | Name | Option Awards | | RSU Awards | | | | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) | | John Carrington | — | — | 36,661 | 262,524 | | William Bush | — | — | 27,391 | 209,878 | | Saul Laureles | — | — | 21,539 | 163,635 | | Alan Russo | — | — | 21,002 | 155,994 | | Prakesh Patel | — | — | 20,200 | 152,601 |

  42. Option Exercises and Stock Vested in 2023

    _______________ (1) Represents the amounts realized based on the fair market value of the Company’s stock on the vesting date of the RSUs.

  43. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control Each NEO is party to an employment agreement (the “Employment Agreements”) that provides for certain severance payments and benefits in connection with certain qualifying terminations of employment, as well as enhanced severance payments and benefits if qualifying terminations of employment occur in connection with a “Change in Control” (as defined in the 2021 Plan). In April 2023, the Compensation Committee conducted a review of its executive severance and change in control practices and concluded that they were in line with market practice. Employment Agreements The “Change in Control Period” in the Employment Agreements commences three months prior to the occurrence of the Change in Control and ends 12 months following the Change in Control. Upon a termination without “Cause” (other than a termination due to death or disability) or resignation for “Good Reason,” in each case, outside of the Change in Control Period (each, as defined in the Employment Agreements), each NEO would be eligible to receive: (i) payment of any bonus earned, but not yet paid for the year prior to the year of termination; (ii) an amount equal to 12 months (in the case of Mr. Carrington) or nine months (in the case of Mr. Bush, Mr. Laureles, Mr. Russo and Mr. Patel) of his annual base salary in effect immediately prior to termination; (iii) payment of a pro rata bonus for the year of termination based on actual performance; and (iv) payment or reimbursement for the premiums that the NEO would be required to pay to maintain continued health coverage under COBRA for a period of up to 12 months (in the case of Mr. Carrington) or nine months (in the case of Mr. Bush, Mr. Laureles, Mr. Patel, and Mr. Russo) following the date of termination. Mr. Carrington, Mr. Bush, Mr. Patel, and Mr. Russo would also be entitled to accelerated vesting of the portion of their Closing Grants that would have otherwise vested within 12 months (in the case of Mr. Carrington), six months (in the case of Mr. Bush and Mr. Patel), or three months (in the case of Mr. Russo) following the date of termination, assuming employment had continued through such date and assuming the Closing Grants provided for annual vesting of 34% per year (in the case of Mr. Bush, Mr. Laureles, Mr. Patel, and Mr. Russo) or 15% per year (in the case of Mr. Carrington). Receipt of all such payments and benefits would be subject to the NEO’s execution and non‑revocation of a release of claims and his or her continued compliance with the covenants set forth in his or her Employment Agreement. Upon a termination without Cause (other than a termination due to death or disability) or resignation for Good Reason, in each case, during the Change in Control Period, each NEO would be eligible to receive: (i) cash payment equal to two times (in the case of Mr. Carrington) or one times (in the case of Mr. Bush, Mr. Laureles, Mr. Russo, and Mr. Patel) the sum of the NEO’s annual base salary plus target bonus; (ii) payment of any bonus earned, but not yet paid for the year prior to the year of termination; (iii) payment of a pro-rata bonus for the year of termination based on actual performance; and (iv) payment or reimbursement for the premium that the NEO would be required to pay to maintain continued health coverage under COBRA for a period of up to eighteen months (in the case of Mr. Carrington) or twelve months (in the case of Mr. Bush, Mr. Laureles, Mr. Russo, and Mr. Patel) following the date of termination. Mr. Carrington, Mr. Bush, Mr. Russo, and Mr. Patel would also be entitled to full vesting of their Closing Grants. Receipt of all such payments and benefits would be subject to the NEO’s execution and non-revocation of a release of claims and his or her continued compliance with the covenants set forth in the Employment Agreements. The 2021 Plan Pursuant to the terms of the 2021 Plan, and unless provided otherwise in an award agreement or other agreement between us or an affiliate and the participant, in the event of Change in Control (as defined in the 2021 Plan), our Board will take one or more of the following actions with respect to each outstanding award, contingent upon the closing or completion of the Change in Control: •arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or continue the award or to substitute a similar stock award for the award (including, but not limited to, an award to acquire the same consideration per share paid to the stockholders of the Company pursuant to the Change in Control); •arrange for the assignment of any reacquisition or repurchase rights held by us in respect of common stock issued pursuant to the award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company); •accelerate the vesting, in whole or in part, of the award (and, if applicable, the time at which the award may be exercised) to a date prior to the effective time of such Change in Control as determined by our Board, with such award terminating if not exercised (if applicable) at or prior to the effective time of the Change in Control, and with such exercise reversed if the Change in Control does not become effective; •arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by us with respect to the award; •cancel or arrange for the cancellation of the award, to the extent not vested or not exercised prior to the effective time of the Change in Control, in exchange for such cash consideration, if any, as our Board, in its reasonable determination, may consider appropriate as an approximation of the value of the cancelled award; and •cancel or arrange for the cancellation of the award, to the extent not vested or not exercised prior to the effective time of the Change in Control, in exchange for a payment equal to the excess, if any, of (A) the value in the Change in Control of the property the participant would have received upon the exercise of the award immediately prior to the effective time of the Change in Control, over (B) any exercise price payable by such holder in connection with such exercise. Our Board need not take the same action or actions with respect to all awards or portions thereof or with respect to all participants and may take different actions with respect to the vested and unvested portions of an award. In the absence of any affirmative determination by our Board at the time of a Change in Control, each outstanding award will be assumed or an equivalent award will be substituted by such successor corporation or a parent or subsidiary of such successor corporation, referred to as a successor corporation, unless the successor corporation does not agree to assume the award or to substitute an equivalent award, in which case the vesting of such award will accelerate in its entirety (along with, if applicable, the time at which the award may be exercised) to a date prior to the effective time of such Change in Control as our Board will determine (or, if our Board does not determine such a date, to the date that is five (5) days prior to the effective date of the Change in Control), with such award terminating if not exercised (if applicable) at or prior to the effective time of the Change in Control, and with such exercise reversed if the Change in Control does not become effective. For a description of the treatment of equity awards under the 2024 Equity Incentive Plan, if approved by our stockholders, see Proposal 2. Estimated Payments as of December 31, 2023

  44. Potential Payments Upon Termination or Change in Control

    The following table presents the estimated payments that each of our NEOs would have been entitled to receive under the arrangements described above assuming that a termination of employment and, where applicable, a Change in Control of the Company had occurred as of December 31, 2023 (with equity award values estimated based on the closing price per share of our common stock on December 29, 2023, the last trading day of 2023, of $3.88). Amounts actually received by an NEO (if any) upon termination of employment will vary based on factors such as the timing during the year of any such event, the Company’s stock price, and any changes to our benefit arrangements and policies. Amounts shown do not include: (i) benefits earned during the term of the NEO’s employment that are available to all benefit-eligible salaried employees and (ii) the value of vested equity awards that the NEO is entitled to regardless of whether employment is terminated.

  45. Potential Payments Upon Termination or Change in Control

    | Name | Benefit | Termination Without Cause or For Good Reason ($) | Termination Without Cause or For Good Reason in Connection with a Change in Control ($) | | John Carrington | Earned unpaid bonus (1) | — | — | | | Base Salary Severance (2) | 550,000 | — | | | Pro-rated bonus for year of termination (3) | 514,250 | 514,250 | | | COBRA benefit (4) | 32,702 | 49,053 | | | Base Salary plus Bonus Severance (5) | — | 2,310,000 | | | Accelerated vesting of Closing Grant (6) | 1,746,000 | 3,880,000 | | | Total | 2,842,952 | 6,753,303 | | William Bush | Earned unpaid bonus (1) | — | — | | | Base Salary Severance (2) | 318,750 | — | | | Pro-rated bonus for year of termination (3) | 270,938 | 270,938 | | | COBRA benefit (4) | 25,704 | 34,272 | | | Base Salary plus Bonus Severance (5) | — | 743,750 | | | Accelerated vesting of Closing Grant (6) | 252,200 | 252,200 | | | Total | 867,592 | 1,301,160 | | Saul Laureles | Earned unpaid bonus (1) | — | — | | | Base Salary Severance (2) | 300,000 | — | | | Pro-rated bonus for year of termination (3) | 221,000 | 221,000 | | | COBRA benefit (4) | 2,259 | 3,012 | | | Base Salary plus Bonus Severance (5) | — | 660,000 | | | Total | 523,259 | 884,012 | | Alan Russo | Earned unpaid bonus (1) | — | — | | | Base Salary Severance (2) | 262,500 | — | | | Pro-rated bonus for year of termination (3) | 316,943 | 316,943 | | | COBRA benefit (4) | 24,526 | 32,702 | | | Base Salary plus Bonus Severance (5) | — | 700,000 | | | Accelerated vesting of Closing Grant (6) | 171,496 | 252,200 | | | Total | 775,465 | 1,301,845 | | Prakesh Patel | Earned unpaid bonus (1) | — | — | | | Base Salary Severance (2) | 281,250 | — | | | Pro-rated bonus for year of termination (3) | 207,188 | 207,188 | | | COBRA benefit (4) | 22,216 | 29,622 | | | Base Salary plus Bonus Severance (5) | — | 618,750 | | | Accelerated vesting of Closing Grant (6) | 252,200 | 252,200 | | | Total | 762,854 | 1,107,760 |

  46. Potential Payments Upon Termination or Change in Control

    (1)Represents the portion of each NEO’s bonus for the year prior to their departure that was earned but unpaid as of the date of termination. There would have been no earned but unpaid amount for 2022 upon a departure as of December 31, 2023. (2)With respect to a qualifying termination not in connection with a Change in Control, represents an amount equal to 12 months (in the case of Mr. Carrington) or nine months (in the case of Mr. Bush, Mr. Laureles, Mr. Russo, and Mr. Patel) of the NEO’s annual base salary in effect immediately prior to termination. (3)In light of the assumed date of termination of December 31, 2023, represents payment of the AIP (or CRO Plan for Mr. Russo) bonus for 2023 based on actual performance. (4)With respect to a qualifying termination not in connection with a Change in Control, represents payment or reimbursement for the premiums that the NEO would be required to pay to maintain continued health coverage under COBRA for a period of up to 12 months (in the case of Mr. Carrington) or nine months (in the case of Mr. Bush, Mr. Laureles, Mr. Russo, and Mr. Patel) following the date of termination. With respect to a qualifying termination in connection with a Change in Control, represents payment or reimbursement for the premium that the NEO would be required to pay to maintain continued health coverage under COBRA for a period of up to 18 months (in the case of Mr. Carrington) or 12 months (in the case of Mr. Bush, Mr. Laureles, Mr. Russo, and Mr. Patel) following the date of termination. (5)With respect to a qualifying termination in connection with a Change in Control, represents cash payment equal to two times (in the case of Mr. Carrington) or one times (in the case of Mr. Bush, Mr. Laureles, Mr. Russo, and Mr. Patel) the sum of the NEO’s annual base salary plus target bonus (which for Mr. Russo reflects the target award under the CRO Plan). (6)With respect to a qualifying termination of Mr. Carrington, Mr. Bush, Mr. Russo, and Mr. Patel not in connection with a change in control, represents the value of accelerated vesting of the portion of their Closing Grants that would have otherwise vested within 12 months (in the case of Mr. Carrington), six months (in the case of Mr. Bush and Mr. Patel), or three months (in the case of Mr. Russo) following the date of termination, assuming employment had continued through such date and assuming the Closing Grants provided for annual vesting of 34% per year (in the case of Mr. Bush, Mr. Laureles, Mr. Patel, and Mr. Russo) or 15% per year (in the case of Mr. Carrington). With respect to a qualifying termination of such NEOs in connection with a change in control, represents the value of full accelerated vesting of their Closing Grants.

  47. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE The Company has prepared this disclosure in accordance with the SEC’s pay versus performance rules in Item 402(v) of Regulation S-K under the Exchange Act (“Item 402(v)”) and does not necessarily reflect value actually realized by our NEOs or how the Compensation Committee evaluates compensation decisions in light of Company or individual performance. For discussion of how the Compensation Committee seeks to align pay with performance when making compensation decisions, please review “Compensation Discussion and Analysis” beginning on page 40.

  48. Pay Versus Performance Table

    Pay Versus Performance Table The following table and related disclosure provide the information required for our NEOs for each of the fiscal years ended December 31, 2023, 2022 and 2021 along with the required financial information required for each fiscal year:

  49. Pay Versus Performance Table

    | | | | | | Year-End Value of $100 Invested on 4/28/2021 in: | | | | | Year (1) | Summary Compensation Table Total for CEO $ | Compensation Actually Paid to CEO $(2) | Average Summary Compensation Table Total for Non-CEO NEOs $(2) | Average Compensation Actually Paid to Non-CEO NEOs $(2)(3) | STEM $ | NASDAQ Clean Edge Green Energy Index $ | Net Income (in millions) $ | Adjusted EBITDA (in millions)(4) $ | | 2023 | 3,884,232 | (6,086,830) | 3,154,648 | 380,032 | 14.58 | 63.35 | (140.4) | (19.5) | | 2022 | 3,140,333 | (13,241,250) | 3,491,627 | 2,863,999 | 33.60 | 69.88 | (124.1) | (46.0) | | 2021 | 40,565,992 | 40,826,778 | 4,178,677 | 6,916,368 | 71.29 | 100.67 | (101.2) | (30.2) |

  50. Pay Versus Performance Table

    _______________ (1)Due to the timing of the Merger, we are providing pay versus performance information for three years in accordance with the transitional rule for new registrants. (2)Deductions from, and additions to, total compensation in the Summary Compensation Table by year to calculate Compensation Actually Paid include:

  51. Pay Versus Performance Table

    | | 2023 | | 2022 | | 2021 | | | | John Carrington | Average Other NEOs (3) | John Carrington | Average Other NEOs (3) | John Carrington | Average Other NEOs (3) | | Total Compensation from Summary Compensation Table | $3,884,232 | $3,154,648 | $3,140,333 | $3,491,627 | $40,565,992 | $4,178,677 | | Adjustments for Equity Awards | | | | | | | | Adjustment for grant date values in the Summary Compensation Table | $(2,806,182) | $(2,505,930) | $(1,978,777) | $(2,866,033) | $(39,470,612) | $(3,523,673) | | Year-end fair value of unvested awards granted in the current year | $1,085,309 | $503,300 | $2,046,816 | $3,246,464 | $20,990,331 | $1,990,669 | | Year-over-year difference of year-end fair values for unvested awards granted in prior years | $(7,137,398) | $(721,714) | $(14,647,716) | $(739,217) | $9,142,970 | $2,006,457 | | Fair values at vest date for awards granted and vested in current year | $— | $— | $— | $— | $— | $— | | Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | $(1,112,791) | $(50,272) | $(1,801,906) | $(268,842) | $9,598,097 | $2,264,238 | | Forfeitures during current year equal to prior year-end fair value | $— | $— | $— | $— | $— | $— | | Dividends or dividend equivalents not otherwise included in total compensation | $— | $— | $— | $— | $— | $— | | Total Adjustments for Equity Awards | $(9,971,062) | $(2,774,616) | $(16,381,583) | $(627,628) | $260,786 | $2,737,691 | | Compensation Actually Paid (as calculated) | $(6,086,830) | $380,032 | $(13,241,250) | $2,863,999 | $40,826,778 | $6,916,368 |

  52. Pay Versus Performance Table

    * All stock option and Performance Stock Unit (PSU) valuations included in “Compensation Actually Paid” values were performed using the Black-Scholes option pricing model and Monte Carlo simulation valuation method, respectively, in a manner consistent with the process used to determine stock option grant date fair values under ASC 718. All stock award valuations (other than for PSUs) included in “Compensation Actually Paid” values were performed using the closing price of the Company's common stock. (3)The other NEOs in each covered year were as follows: •2023: William Bush, Saul Laureles, Alan Russo, Prakesh Patel •2022: William Bush, Saul Laureles, Kim Homenock, Robert Schaefer •2021: William Bush, Larsh Johnson (4) See definition in Compensation Discussion & Analysis section; for a reconciliation of adjusted EBITDA to net loss on a GAAP basis, see Appendix A.

  53. CEO PAY RATIO DISCLOSURE

    CEO PAY RATIO DISCLOSURE Based on the methodology described below, our CEO’s 2023 total compensation of $3,884,232 was 24.2 times our median employee’s 2023 total compensation of $160,743. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below. For these purposes, we identified the median compensated employee using gross cash compensation reflected in our payroll records for all individuals who were employed by us on December 31, 2023, excluding our CEO. We annualized wages for any employee who did not work for the entire year, unless such employee was designated as temporary, seasonal or other non-permanent category in our records. We calculated the median compensated employee’s 2023 total compensation reported above using the same methodology as we calculate NEO compensation for purposes of the Summary Compensation Table. The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.

  54. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The Compensation Committee is responsible for periodically reviewing and approving the form and amount of compensation paid to our non-employee directors for their service on our Board and its committees. Directors who are employees of the Company do not receive compensation for serving on the Board. In making non-employee director compensation recommendations, the Compensation Committee takes various factors into consideration, including the responsibilities of directors generally, as well as committee chairs, and the form and amount of compensation paid to directors by peer companies. Our Compensation Committee annually reviews our non-employee director compensation. In 2023, the Committee’s non-employee director pay review took into account multiple factors, including our director compensation philosophy, changes in market practices, the continued expansion of director and committee chair responsibilities, and consultations with, and competitive data collected by, the Committee’s independent compensation consultant, Pearl Meyer. The market data showed that our non-executive directors’ equity compensation and their annual total direct compensation were both positioned at the 35th percentile of peer companies. However, the Committee determined that, given current market conditions, it was not appropriate to approve any non-employee director pay increases at that time. Cash Compensation. The following table shows the cash retainer for service on the Board and various committees. Cash payments were made quarterly in arrears. Compensation for committee chair service is in lieu of compensation for committee membership, and not in addition to it.

  55. DIRECTOR COMPENSATION

    | Position | Cash Retainer ($) | | Board Member | 60,000 | | Additional Retainers | | | Chairman of the Board | 45,000 | | Audit Committee Chair | 20,000 | | Compensation Committee Chair | 12,000 | | Nominating Committee Chair | 10,000 | | Audit Committee Member | 10,000 | | Compensation Committee Member | 6,000 | | Nominating Committee Member | 4,000 |

  56. DIRECTOR COMPENSATION

    Equity Compensation. Upon election or re-election to our Board and in connection with each annual meeting of stockholders, non-employee directors receive an annual equity grant of time-based RSUs with a target grant date fair value of $140,000, subject to an overall per-director limit of $600,000 on the total cash fees paid and value of equity granted in a single year. In 2023, each non-employee director was awarded 23,489 RSUs, which will vest in full on June 7, 2024, the anniversary of our 2023 Annual Meeting of Stockholders. The following table shows total compensation received by our non-employee directors for their service in 2023, calculated in accordance with SEC rules.

  57. 2023 Non-Employee Director Compensation Table

    2023 Non-Employee Director Compensation Table

  58. 2023 Non-Employee Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | Total ($) | | David Buzby | 110,000 | 140,000 | 250,000 | | Ira Birns (2) | 12,088 | 78,356 (3) | 90,444 | | Adam E. Daley | 70,000 | 140,000 | 210,000 | | Michael C. Morgan | 72,000 | 140,000 | 212,000 | | Anil Tammineedi | 74,000 | 140,000 | 214,000 | | Lisa L. Troe (4) | 40,000 | 140,000 | 180,000 | | Laura D’Andrea Tyson | 70,000 | 140,000 | 210,000 |

  59. 2023 Non-Employee Director Compensation Table

    | Jane Woodward | 70,000 | 140,000 | 210,000 | | Gerard Cunningham | — | — | — |

  60. 2023 Non-Employee Director Compensation Table

    (1)Amounts reported for all directors other than Mr. Birns reflect the aggregate grant date fair value of RSUs, calculated in accordance with applicable accounting standards and based on the closing price of our common stock on June 7, 2023 (the grant date of the RSUs) of $5.96. These amounts may not correspond to the actual value eventually realized by each director because the value depends on the market value of our common stock at the time the RSU vests. As of December 31, 2023, none of our non-employee directors held outstanding equity awards, other than those shown in the table above, except for Mr. Buzby who holds 23,717 stock options that were awarded before the Merger. (2)Mr. Birns was appointed to the Board effective November 6, 2023. In connection with his appointment, he received pro-rated compensation, including a grant of 24,184 RSUs. (3)Amounts reported reflect the aggregate grant date fair value of RSUs granted to Mr. Birns, calculated in accordance with applicable accounting standards and based on the closing price of our common stock on October 26, 2023 (the grant date of the RSUs) of $3.24. (4) Ms. Troe resigned from the Board effective June 30, 2023. As a result, the entirety of her unvested RSUs granted on June 7, 2023 were forfeited. Non-employee directors who begin their Board, Board Chair, committee or committee chair service after the Annual Meeting of Stockholders receive a prorated amount of annual compensation. The Company also reimburses non-employee directors for reasonable travel and other business expenses incurred in the performance of their services for the Company, in accordance with our expense reimbursement policy as in effect from time to time.

  61. ARTICLE IX LIABILITY OF DIRECTORS AND OFFICERS

    ARTICLE IX LIABILITY OF DIRECTORS AND OFFICERS Section 9.1 No Personal Liability. To the fullest extent permitted by the DGCL as the same exists or as may hereafter be amended, no director or officer of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable.