INNODATA INC

The primary elements of the Company’s Executive Compensation Program are described below. The Committee does not use a pre-set formula to allocate a percentage of total compensation to each compensation component, and the percentage of total compensation allocated to each compensation component varies among the executive officers.

Base Salary

The base salaries of our executive officers are designed to attract and retain a high performing and dedicated leadership team. The Committee reviews the performance evaluations and salary recommendations provided to the Committee by the CEO for each executive officer other than himself. Increases to the CEO’s base salary are determined by the Committee without a recommendation by Company management. Adjustments to base salary take into consideration the Company’s financial performance, and are determined based on the individual’s responsibility level, performance, contribution and length of service, as well as competitive market data and any requirements set forth in the executive officer’s employment agreement. No adjustments were made by the Committee to the named executive officers’ base salary in the year ended December 31, 2023. In April 2024 the Committee increased the base salaries of the named executive officers effective April 1, 2024, as set forth below.

Performance-Based Cash Incentives

Performance-based cash incentives provide the Company with a means of rewarding performance based upon the attainment of corporate financial goals, individual goals, and individual accomplishments and contributions to the Company. The Committee reviews the Company’s financial performance and individual performance, accomplishments and contributions, as well as recommendations provided to the Committee by the CEO for each executive officer other than the CEO. Cash incentives may be paid pursuant to an incentive compensation plan or as cash bonuses.

In December 2023 the Committee awarded cash bonuses to the named executive officers based on the Company’s performance in the year ended December 31, 2022, and each executive officer’s individual accomplishments and contributions towards the Company’s performance in 2022, as follows: $300,000 to Mr. Abuhoff, $72,000 to Ms. Espineli, and $200,000 to Mr. Mishra.

Basedon the Company’s performance in the year ended December 31, 2023, and on each executive officer’s individual accomplishments and contributions towards the Company’s performance in 2023, in April 2024 the Committee awarded the following cash bonuses to named executive officers for the year ended December 31, 2023: $450,000 to Mr. Abuhoff, $90,000 to Ms. Espineli, and $300,000 to Mr. Mishra.

Stock-Based Incentives

The Company uses stock option grants as the primary vehicle for employee stock-based incentives. The Company also uses restricted share grants and restricted stock units as a form of stock-based incentives. The Committee believes stock-based incentives align the executive officers’ interests with those of stockholders in building stockholder value over the long term by tying a significant percentage of compensation to be realized by the executive officers to changes in stockholder value over the long term. The Committee also believes that stock-based incentives offer executive officers an incentive for the achievement of superior performance over time, and foster the retention of key management personnel. The number of stock options or other stock-based incentives the Committee awards each executive officer is based on his or her relative position, responsibilities and performance, including anticipated future performance, potential and responsibilities, and performance over the previous fiscal year, to the extent applicable. The grant date fair value of the award is also considered in determining the number of stock options to be awarded. The exercise price of stock options that are granted is equal to the closing market price of the Company’s Common Stock on the date of grant. The size and value of stock-based grants is not directly related to the Company’s performance. The Committee also reviews and considers prior stock-based grants made to each executive officer. No stock-based grants were made to executive officers in the year ended December 31, 2023.

Benefits and Perquisites

The Company offers retirement, health, life, and disability benefits, as well as medical and dependent care reimbursement plans to all full-time employees. These plans do not discriminate in scope, terms or operation in favor of executive officers. In addition, in the year ended December 31, 2023, the Company reimbursed Mr. Abuhoff $8,698 for the cost of life and disability insurance premiums and related taxes pursuant to his employment agreement.

Severance and Change-of-Control

The Company uses severance and change-of-control agreements to attract and retain qualified, talented and dedicated executives and to help the Company remain competitive in the marketplace.

Results of 2023 Advisory Vote on Executive Compensation

At the 2023 Annual Meeting of Stockholders held in June 2023, the Company’s stockholders approved the 2022 compensation of the Company’s named executive officers by 81% of the votes cast. The Company took into account these results when making decisions about its compensation practices for the year ended December 31, 2023. The Compensation Committee values the stockholder feedback provided through the vote, as well as the feedback regarding Company performance received through conversations with stockholders subsequent to the vote. The Compensation Committee will continue to review the Company’s executive compensation programs to assure that the compensation of the named executive officers remains consistent with the objectives stated above under “Overview of Executive Compensation Program” and reflective of the Company’s financial performance.

officers

Set forth below is information concerning the Company’s current named executive officers who are not directors.

Marissa B. Espinelihas been the Company’s Interim Chief Financial Officer since March 2022. Ms. Espineli has been the Company’s Vice President, Finance and Corporate Controller since January 2012, and has been part of the Company’s Finance team since 2000. Ms. Espineli is a Certified Public Accountant and holds a Bachelor of Science in Business Administration- Finance and Accounting from the University of the East (1984).

Ashok Mishrahas been the Company’s Executive Vice President and Chief Operating Officer since January 2007. Prior to 2007, Mr. Mishra held senior level positions with the Company and its subsidiaries for more than nine years. Mr. Mishra has served as Senior Vice President since May 2004, after serving as Vice President, Project Delivery from October 2001 through April 2004. Prior thereto, Mr. Mishra served as Assistant Vice President, Project Delivery from November 2000 to September 2001, and as General Manager and Head of the Facility of the Company’s India operations from 1997 to October 2000. Mr. Mishra holds a Bachelor of Technology degree in Mechanical Engineering from Pantnagar University (1976). He also has Component Manufacturing Technical Training from Alcatel France (1985) and completed a condensed MBA course from Indian Institute of Management Bangalore (1995).

The Company’s executive officers are appointed by, and serve at the discretion of, our Board of Directors. There are no family relationships between or among any of the Company’s executive officers and there are no arrangements or understandings between our executive officers and any other persons pursuant to which our named executive officers were appointed as officers.