Aqua Metals, Inc.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
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FY2024 · Filed Mar 31, 2025
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Item 11. Executive Compensation
| Item 11. | Executive Compensation |
|---|
Summary Compensation Table
The following table sets forth the compensation awarded to, earned by or paid to those persons who served as our chief executive officer and our two other highest paid executive officers for the years ended December 31, 2024 and 2023 (in thousands).
| Stock · All Other | ||||||
|---|---|---|---|---|---|---|
| Salary · Bonus · Awards (1) · Compensation · Total | ||||||
| Name and Principal Position | Year | ($) | ($) | ($) | ($) | ($) |
| Stephen Cotton, | 2024 | 511 | 358 | 568 | 23 | 1,460 |
| President and Chief Executive | 2023 | 488 | 553 | 1,405 | 17 | 2,463 |
| Officer | ||||||
| Judd Merrill, | 2024 | 375 | 228 | 244 | 22 | 869 |
| Chief Financial Officer | 2023 | 358 | 304 | 564 | 19 | 1,245 |
| Benjamin Taecker, | 2024 | 300 | 105 | 147 | 20 | 572 |
| Chief Engineering and | 2023 | 271 | 154 | 429 | 19 | 873 |
| Operating Officer | ||||||
| (1) | Amounts shown in this column do not reflect dollar amounts actually received by our named executive officers. Instead, these amounts reflect the aggregate grant date fair value of each restricted common stock award computed in accordance with the provisions of FASB ASC Topic 718 (using the closing price of our common stock on the date of grant). Assumptions used in the calculation of these amounts are included in Note 13, Stockholders’ Equity, of our audited consolidated financial statements for the year ended December 31, 2024. |
Narrative Disclosure to Summary Compensation Table
Cotton Employment Agreement
Effective as of August 7, 2023, we entered into an amended and restated employment agreement with Mr. Cotton pursuant to which we agreed to pay Mr. Cotton a base salary of $491,400 effective as of March 5, 2023, along with reasonable and customary health insurance and other benefits, at our expense. Mr. Cotton will be eligible to receive short-term and long-term incentive bonuses with a target of 100% and 200% of his base salary, respectively, based on performance criteria approved by the compensation committee of our Board. In addition, the agreement provides Mr. Cotton with severance of two times his annual salary, a prorated bonus for the year of his termination and two years of health benefits in the event we terminate Mr. Cotton without cause or he resigns for good reason; provided, if he is terminated without cause or resigns for good reason within one year following a change of control of our Company, his severance will include two times his annual salary, two times his annual bonus, two years of health benefits and the immediate vesting of all unvested equity awards. The employment agreement provides for intellectual property assignment and confidentiality provisions that are customary in our industry.
On December 12, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Cotton in the form of 68,250 RSUs granted under the 2019 Plan. The RSUs were issued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Cotton will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Cotton’s continuation of service to our Company.
On December 12, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Cotton in the form of 21,000 RSUs The RSUs will vest and settle based on the Company's common stock achieving absolute price hurdles based on a 5-day VWAP at any time over the three years from the date of grant, as follows: 10,500 RSUs will vest and settle upon achieving $2.50 per share; 5,250 RSUs will vest and settle upon achieving $4.00 per share; and 5,250 RSUs will vest and settle upon achieving $5.00 per share. The RSUs have been granted under the 2019 Plan and will expire on the third anniversary of the date of grant and subject to Mr. Cotton’s continuation of service to our Company.
Effective as of December 31, 2023, the Compensation Committee of our Board amended the employment agreement with Mr. Cotton, to increase Mr. Cotton’s salary to $511,056 per year.
On December 19, 2024, the Compensation Committee of our Board also approved a bonus to Mr. Cotton in the form of 271,927 RSUs granted under the 2019 Plan. The RSUs were issued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Cotton will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Cotton’s continuation of service to our Company.
On December 19, 2024, the Compensation Committee of our Board also approved a bonus to Mr. Cotton in the form of 45,321 PSUs granted under the 2019 Plan. The PSUs were issued pursuant to a Performance Stock Unit Award Agreement pursuant to which Mr. Cotton will receive one share of our common stock upon settlement of each PSU. The PSUs vest based on the TSR, which is based on the percentage difference between the current year 30-day average VWAP closing stock price at 12/31/2024 and a future date 30-day average VWAP closing stock price. The grant includes three measurement points—December 31, 2025, December 31, 2026, and December 31, 2027—at which one-third of the PSUs will be evaluated. TSR is paid out based on where AQMS compares with our pier group based on the following percentiles (50% 25th percentile, 100% at 50th percentile, 200% at 75th percentile). The PSU vesting is subject to Mr. Cotton’s continuation of service to our Company.
On December 19, 2024, the Compensation Committee of our Board also approved a bonus to Mr. Cotton in the form of 45,321 PSUs granted under the 2019 Plan. The PSUs vests based on Stock price targets that can be achieved anytime during the period but no later than 3 years after the 12/31/2024. PSUs vests based upon hitting stock price hurdles (for five consecutive days closing prices)within three years of 12/31/2024. The stock vest in 3 hurdles, with 1/3 share vesting with a 50% increase in stock price, 1/3 vesting with a 100% increase in stock price and 1/3 vesting with a 150% increase in stock price. The base or starting stock price is calculated as the 30-day average VWAP closing price at 12/31/2024. The PSU vesting is subject to Mr. Cotton’s continuation of service to our Company.
Merrill Employment Agreement
Effective as of August 7, 2023, we entered into an amended and restated employment agreement with Mr. Merrill pursuant to which we agreed to pay Mr. Merrill a base salary of $360,500 effective as of March 5, 2023, along with reasonable and customary health insurance and other benefits, at our expense. Mr. Merrill will be eligible to receive short-term and long-term incentive bonuses with a target of 75% and 125% of his base salary, respectively, based on performance criteria approved by the compensation committee of our Board. In addition, the agreement provides Mr. Merrill with severance of 18 months of his annual salary, a prorated bonus for the year of his termination and 18 months of health benefits in the event we terminate Mr. Merrill without cause or he resigns for good reason; provided, if he is terminated without cause or resigns for good reason within one year following a change of control of our Company, his severance will include 18 months times of his annual salary, 150% of his annual bonus, 18 months of health benefits and the immediate vesting of unvested equity awards. The employment agreement provides for intellectual property assignment and confidentiality provisions that are customary in our industry.
On December 12, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Merrill in the form of 31,281 RSUs granted under the 2019 Plan. The RSUs were issued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Merrill will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Merrill’s continuation of service to our Company.
On December 12, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Merrill in the form of 2,500 RSUs The RSUs will vest and settle based on the Company's common stock achieving absolute price hurdles based on a 5-day VWAP at any time over the three years from the date of grant, as follows: 1,250 RSUs will vest and settle upon achieving $2.50 per share; 625 RSUs will vest and settle upon achieving $4.00 per share; and 625 RSUs will vest and settle upon achieving $5.00 per share. The RSUs have been granted under the 2019 Plan and will expire on the third anniversary of the date of grant and subject to Mr. Merrill’s continuation of service to our Company.
Effective as of December 31, 2023, the Compensation Committee of our Board amended the employment agreement with Mr. Merrill, to increase Mr. Merrill’s salary to $374,775 per year.
On December 19, 2024, the Compensation Committee of our Board also approved a bonus to Mr. Merrill in the form of 124,633 RSUs granted under the 2019 Plan. The RSUs were issued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Merrill will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Merrill’s continuation of service to our Company.
On December 19, 2024, the Compensation Committee of our Board also approved a bonus to Mr. Merrill in the form of 20,772 PSUs granted under the 2019 Plan. The PSUs were issued pursuant to a Performance Stock Unit Award Agreement pursuant to which Mr. Merrill will receive one share of our common stock upon settlement of each PSU. The PSUs vest based on the TSR, which is based on the percentage difference between the current year 30-day average VWAP closing stock price at 12/31/2024 and a future date 30-day average VWAP closing stock price. The grant includes three measurement points—December 31, 2025, December 31, 2026, and December 31, 2027—at which one-third of the PSUs will be evaluated. TSR is paid out based on where AQMS compares with our pier group based on the following percentiles (50% 25th percentile, 100% at 50th percentile, 200% at 75th percentile). The PSU vesting is subject to Mr. Merrill’s continuation of service to our Company.
On December 19, 2024, the Compensation Committee of our Board also approved a bonus to Mr. Merrill in the form of 20,772 PSUs granted under the 2019 Plan. The PSUs vests based on Stock price targets that can be achieved anytime during the period but no later than 3 years after the 12/31/2024. PSUs vests based upon hitting stock price hurdles (for five consecutive days closing prices)within three years of 12/31/2024. The stock vest in 3 hurdles, with 1/3 share vesting with a 50% increase in stock price, 1/3 vesting with a 100% increase in stock price and 1/3 vesting with a 150% increase in stock price. The base or starting stock price is calculated as the 30-day average VWAP closing price at 12/31/2024. The PSU vesting is subject to Mr. Merrill’s continuation of service to our Company.
Taecker Employment Agreement
In August 2021, we entered executive employment agreement with Mr. Taecker. Pursuant to the employment agreement, we initially agreed to compensate Mr. Taecker at the annual rate of $250,000. Mr. Taecker will be eligible to receive short-term and long-term incentive bonuses of up to 50% and 100% of his base salary, respectively, based on performance criteria approved by the compensation committee of our board of directors. The employment agreement entitles Mr. Taecker to reasonable and customary health insurance and other benefits, at our expense, and severance equal to 150% of his then annual salary and target annual bonus amount in the event of his termination for good reason following a change-in-control of the Company. Effective as of January 2, 2022, the Compensation Committee of our Board amended the employment agreement with Mr. Taecker, to increase Mr. Taecker’s salary to $262,500 per year.
Effective as of August 7, 2023, we entered into an amended and restated employment agreement with Mr. Taecker pursuant to which we agreed to pay Mr. Taecker a base salary of $273,000 effective as of March 5, 2023, along with reasonable and customary health insurance and other benefits, at our expense. Mr. Tacker will be eligible to receive short-term and long-term incentive bonuses with a target of 50% and 100% of his base salary, respectively, based on performance criteria approved by the compensation committee of our Board. In addition, the agreement provides Mr. Taecker with severance of 12 months of his annual salary, a prorated bonus for the year of his termination and 12 months of health benefits in the event we terminate Mr, Taecker without cause or he resigns for good reason; provided, if he is terminated without cause or resigns for good reason within one year following a change of control of our Company, his severance will include 18 months times of his annual salary, 150% of his annual bonus, 18 months of he
On December 12, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Taecker in the form of 18,958 RSUs granted under the 2019 Plan. The RSUs were issued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Taecker will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Taecker’s continuation of service to our Company.
On December 12, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Taecker in the form of 141 RSUs The RSUs will vest and settle based on the Company's common stock achieving absolute price hurdles based on a 5-day VWAP at any time over the three years from the date of grant, as follows: 71 RSUs will vest and settle upon achieving $2.50 per share; 35 RSUs will vest and settle upon achieving $4.00 per share; and 35 RSUs will vest and settle upon achieving $5.00 per share. The RSUs have been granted under the 2019 Plan and will expire on the third anniversary of the date of grant and subject to Mr. Taecker’s continuation of service to our Company.
On December 29, 2023, the Compensation Committee of our Board also approved a bonus to Mr. Taecker in the form of 6,500 RSUs granted under the 2019 Plan. The RSUs were, issued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Taecker will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Taecker’s continuation of service to our Company.
Effective as of December 31, 2023, the Compensation Committee of our Board amended the employment agreement with Mr. Taecker, to increase Mr. Taecker’s salary to $300,300 per year.
On December 19, 2024, the Compensation Committee of our Board also approved a bonus to Mr. Taecker in the form of 79,893 RSUs granted under the 2019 Plan. The RSUs were issued pursuant to a Restricted Stock Unit Award Agreement pursuant to which Mr. Taecker will receive one share of our common stock upon settlement of each RSU. The RSUs will settle in six equal semi-annual installments over a three-year period, subject to Mr. Taecker’s continuation of service to our Company.
On December 19, 2024, the Compensation Committee of our Board also approved a bonus to Mr. Taecker in the form of 13,315 PSUs granted under the 2019 Plan. The PSUs were issued pursuant to a Performance Stock Unit Award Agreement pursuant to which Mr. Taecker will receive one share of our common stock upon settlement of each PSU. The PSUs vest based on the TSR, which is based on the percentage difference between the current year 30-day average VWAP closing stock price at 12/31/2024 and a future date 30-day average VWAP closing stock price. The grant includes three measurement points—December 31, 2025, December 31, 2026, and December 31, 2027—at which one-third of the PSUs will be evaluated. TSR is paid out based on where AQMS compares with our pier group based on the following percentiles (50% 25th percentile, 100% at 50th percentile, 200% at 75th percentile). The PSU vesting is subject to Mr. Taecker’s continuation of service to our Company.
On December 19, 2024, the Compensation Committee of our Board also approved a bonus to Mr. Taecker in the form of 13,315 PSUs granted under the 2019 Plan. The PSUs vests based on Stock price targets that can be achieved anytime during the period but no later than 3 years after the 12/31/2024. PSUs vests based upon hitting stock price hurdles (for five consecutive days closing prices) within three years of 12/31/2024. The stock vest in 3 hurdles, with 1/3 share vesting with a 50% increase in stock price, 1/3 vesting with a 100% increase in stock price and 1/3 vesting with a 150% increase in stock price. The base or starting stock price is calculated as the 30-day average VWAP closing price at 12/31/2024. The PSU vesting is subject to Mr. Taecker’s continuation of service to our Company.
Potential Payments upon Termination
As noted above, the employment agreements for Mr. Cotton, Merrill, and Taecker entitle each officer to a severance payment and related benefits in the event of our termination of their employment without cause or their resignation for good reason.
If a qualifying involuntary termination had occurred on December 31, 2024, Mr. Cotton, Merrill, and Taecker would have been eligible to receive the following amounts:
| Health | ||||
|---|---|---|---|---|
| Base · Prorated · Insurance | ||||
| Salary | Annual Bonus | Premiums (1) | Total | |
| Name | ($) | ($) | ($) | ($) |
| Stephen Cotton | 1,022 | 511 | 51 | $1,584 |
| Judd Merrill | 562 | 281 | 42 | $885 |
| Benjamin Taecker | 300 | 150 | 24 | $474 |
| (1) | Calculated using the monthly COBRA amount based on health insurance elections at December 31, 2024. |
Outstanding Equity Awards at December 31, 2024
| Option Awards · Stock Awards | |||
|---|---|---|---|
| Name · Number of Securities Underlying Unexercised Options Exercisable · Number of Securities Underlying Unexercised Options Unexercisable · Option Exercise Price · Option Expiration Date · Number of Units of Stock that have not vested · Market value of Units of Stock that have not vested | |||
| Stephen Cotton | 6,020 | $15,170 | (1) |
| 31,765 | $80,048 | (2) | |
| 56,880 | $143,338 | (3) | |
| 271,927 | $685,256 | (4) | |
| 21,000 | $52,920 | (5) | |
| 45,321 | $114,209 | (6) | |
| 45,321 | $114,209 | (7) | |
| Judd Merrill | 2,759 | $6,953 | (1) |
| 14,556 | $36,681 | (2) | |
| 26,070 | $65,696 | (3) | |
| 124,634 | $314,078 | (4) | |
| 2,500 | $6,300 | (5) | |
| 20,772 | $52,345 | (6) | |
| 20,772 | $52,345 | (7) | |
| Benjamin Taecker | 1,673 | $4,216 | (1) |
| 8,822 | $22,231 | (2) | |
| 15,800 | $39,816 | (3) | |
| 79,893 | $201,330 | (4) | |
| 141 | $355 | (5) | |
| 13,315 | $33,554 | (6) | |
| 13,315 | $33,554 | (7) | |
| 5,418 | $13,653 | (8) | |
| (1) | These RSUs were awarded on December 13, 2021. The RSUs vest in six equal semi-annual installments over a three-year period. |
| (2) | These RSUs were awarded on December 12, 2022. The RSUs vest in six equal semi-annual installments over a three-year period. |
| (3) | These RSUs were awarded on December 12, 2023. The RSUs vest in six equal semi-annual installments over a three-year period. |
| (4) | These RSUs were awarded on December 19, 2024. The RSUs vest in six equal semi-annual installments over a three-year period. |
| (5) | These PSUs were awarded on December 12, 2023. The RSUs will vest and settle based on the Company's common stock achieving absolute price hurdles based on a 5-day VWAP at any time over the three years from the date of grant, as follows: one half of the RSUs will vest and settle upon achieving $2.50 per share; one quarter of the RSUs will vest and settle upon achieving $4.00 per share; and one quarter of the RSUs will vest and settle upon achieving $5.00 per share. |
| (6) | These PSUs were awarded on December 19, 2024. The PSUs vest based on the TSR, which is based on the percentage difference between the current year 30-day average VWAP closing stock price at 12/31/2024 and a future date 30-day average VWAP closing stock price. The grant includes three measurement points—December 31, 2025, December 31, 2026, and December 31, 2027—at which one-third of the PSUs will be evaluated. TSR is paid out based on where AQMS compares with our pier group based on the following percentiles (50% 25th percentile, 100% at 50th percentile, 200% at 75th percentile). |
| (7) | These PSUs were awarded on December 19, 2024. The PSUs vests based on Stock price targets that can be achieved anytime during the period but no later than 3 years after the 12/31/2024. PSUs vests based upon hitting stock price hurdles (for five consecutive days closing prices) within three years of 12/31/2024. The stock vest in 3 hurdles, with 1/3 share vesting with a 50% increase in stock price, 1/3 vesting with a 100% increase in stock price and 1/3 vesting with a 150% increase in stock price. The base or starting stock price is calculated as the 30-day average VWAP closing price at 12/31/2024. |
| (8) | These RSUs were awarded on December 29, 2023. The RSUs vest in six equal semi-annual installments over a three-year period. |
Pay vs. Performance
The following table sets forth compensation information for our chief executive officer, referred to below as our CEO, and our other named executive officers, or NEOs, for purposes of comparing their compensation to the value of our shareholders’ investments and our net income, calculated in accordance with SEC regulations, for fiscal years 2024, 2023 and 2022.
| Year | Summary Compensation Table Total for CEO | Compensation Actually Paid to CEO | Average Summary Compensation Table Total for Non-CEO NEOs | Average Compensation Actually Paid to Non-CEO NEOs | Total Shareholder Return | Net Income |
|---|---|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) | ||
| 2024 | $1,460,000 | $869,740 | $720,500 | $737,667 | $10.24 | $(24,555,000) |
| 2023 | $2,463,000 | $1,447,590 | $1,009,333 | $725,337 | $24.92 | $(23,938,000) |
| 2022 | $1,782,375 | $2,393,412 | $782,745 | $994,189 | $40.98 | $(15,431,000) |
| 1. | The dollar amounts reported are the amounts of total compensation reported for our CEO, Mr. Cotton, in the Summary Compensation Table for fiscal years 2024 and 2023. |
| 2. | The dollar amounts reported represent the amount of “compensation actually paid”, as computed in accordance with SEC rules. The dollar amounts reported are the amounts of total compensation reported for Mr. Cotton during the applicable year, but also include (i) the year-end value of equity awards granted during the reported year, (ii) the change in the value of equity awards that were unvested at the end of the prior year, measured through the date the awards vested, or through the end of the reported fiscal year, and (iii) value of equity awards issued and vested during the reported fiscal year. See Table below for further information. |
| 3. | The dollar amounts reported are the average of the total compensation reported for our NEOs, other than our CEO, namely Mr. Merrill and Mr. Taecker in the Summary Compensation Table for fiscal year 2024. Mr. Merrill and Mr. Taecker, and Mr. McMurtry (Former CBO) were included in 2023 and 2022. |
| 4. | The dollar amounts reported represent the average amount of “compensation actually paid”, as computed in accordance with SEC rules, for our NEOs, other than our CEO. The dollar amounts reported are the average of the total compensation reported for our NEOs, other than our CEO in the Summary Compensation Table for fiscal years 2023, 2022 and 2021, but also include (i) the year-end value of equity awards granted during the reported year, (ii) the change in the value of equity awards that were unvested at the end of the prior year, measured through the date the awards vested, or through the end of the reported fiscal year, and (iii) value of equity awards issued and vested during the reported fiscal year. See Table below for further information. |
| 5. | Reflects the cumulative shareholder return, computed in accordance with SEC rules, as of the end of each fiscal year assuming (i) an investment of $100 in our common shares at a price per share equal to $24.60, the closing price of our common stock on December 31, 2021 and (ii) the valuation of those shares as of the last trading day in 2022, 2023 and 2024 based on the closing prices for our common stock as of the those dates of $25.00, $15.20 and $2.52, respectively. |
CEO Equity Award Adjustment Breakout
| Year · Summary Compensation Table Total · Grant Date Fair Value of Equity Awards Granted in Fiscal Year · Change in Pension Value · Pension Service Cost and Associated Prior Service Cost · Fair Value at Fiscal Year End of Outstanding and Unvested Equity Awards Granted in the Fiscal Year · Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years · Fair Value at Vesting of Equity Awards Granted and Vested in the Fiscal Year · Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year · Fair Value as of the Prior Fiscal Year End of Equity Awards Granted in Prior Fiscal Years that Failed to Meet Vesting Conditions in the Fiscal Year · Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Reflected in Total Compensation · Compensation Actually Paid | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) | (6) | ||||||||
| 2024 | $1,460,000 | $(568,000) | $0 | $0 | $1,633,561 | $(1,409,158) | $0 | $(246,663) | $0 | $0 | $869,740 | ||
| 2023 | $2,463,000 | $(1,405,000) | $0 | $0 | $1,248,224 | $(775,034) | $0 | $(83,599) | $0 | $0 | $1,447,590 | ||
| 2022 | $1,782,375 | $(825,375) | $0 | $0 | $1,588,236 | $31,563 | $0 | $(183,388) | $0 | $0 | $2,393,412 | ||
| (1) | Add the fair value as of the end of the covered fiscal year of all awards granted during the covered fiscal year that are outstanding and unvested as of the end of the covered fiscal year; |
| (2) | Add the amount equal to the change as of the end of the covered fiscal year (from the end of the prior fiscal year) in fair value (whether positive or negative) of any awards granted in any prior fiscal year that are outstanding and unvested as of the end of the covered fiscal year; |
| (3) | Add, for awards that are granted and vest in the same year, the fair value as of the vesting date; |
| (4) | Add the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value (whether positive or negative) of any awards granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year; |
| (5) | Subtract, for any awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during the covered fiscal year, the amount equal to the fair value at the end of the prior fiscal year; and |
| (6) | Add the dollar value of any dividends or other earnings paid on stock or option awards in the covered fiscal year prior to the vesting date that are not otherwise included in the total compensation for the covered fiscal year. |
Non-CEO NEO Equity Award Adjustment Breakout
| Year · Summary Compensation Table Total · (Minus): Grant Date Fair Value of Equity Awards Granted in Fiscal Year · (Minus): Change in Pension Value · Plus: Pension Service Cost and Associated Prior Service Cost · Plus: Fair Value at Fiscal Year End of Outstanding and Unvested Equity Awards Granted in the Fiscal Year · Plus/(Minus): Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years · Plus: Fair Value at Vesting of Equity Awards Granted and Vested in the Fiscal Year · Plus/(Minus): Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year · (Minus): Fair Value as of the Prior Fiscal Year End of Equity Awards Granted in Prior Fiscal Years that Failed to Meet Vesting Conditions in the Fiscal Year · Plus: Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Reflected in Total Compensation · Compensation Actually Paid | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) | (6) | ||||||||
| 2024 | $720,500 | $(195,500) | $0 | $0 | $797,467 | $(489,252) | $0 | $(95,548) | $0 | $0 | $737,667 | ||
| 2023 | $1,009,333 | $(460,000) | $0 | $0 | $410,807 | $(222,200) | $0 | $(12,603) | $0 | $0 | $725,337 | ||
| 2022 | $782,745 | $(277,411) | $0 | $0 | $519,289 | $5,846 | $0 | $(36,278) | $0 | $0 | $994,189 | ||
| (1) | Add the fair value as of the end of the covered fiscal year of all awards granted during the covered fiscal year that are outstanding and unvested as of the end of the covered fiscal year; |
| (2) | Add the amount equal to the change as of the end of the covered fiscal year (from the end of the prior fiscal year) in fair value (whether positive or negative) of any awards granted in any prior fiscal year that are outstanding and unvested as of the end of the covered fiscal year; |
| (3) | Add, for awards that are granted and vest in the same year, the fair value as of the vesting date; |
| (4) | Add the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value (whether positive or negative) of any awards granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year; |
| (5) | Subtract, for any awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during the covered fiscal year, the amount equal to the fair value at the end of the prior fiscal year; and |
| (6) | Add the dollar value of any dividends or other earnings paid on stock or option awards in the covered fiscal year prior to the vesting date that are not otherwise included in the total compensation for the covered fiscal year. |
Relationship between Pay and Performance
"Compensation actually paid" to our CEO decreased from $2,393,412 in 2022 to $1,447,590 in 2023, and subsequently decreased to $869,740 in 2024. Similarly, average “compensation actually paid” to our non-CEO NEOs decreased from $994,189 in 2022 to $725,337 in 2023, and then subsequently increased to $737,667 in 2024. These aforementioned changes in "compensation actually paid" are in line with the changes in our total shareholder return (TSR) as set forth in the above table: our TSR decreased by 39% between 2022 and 2023, and our TSR decreased by 59% between 2023 and 2024. In addition, the changes in "compensation actually paid" are in line with the changes in our net loss: that is, our net loss increased by 55% from $(15,431,000) in 2022 to $(23,938,000) in 2023, and increased by 2% to $(23,996,000) in 2023.
Short-Term Incentive Plan (STIP)
Our Board has approved, and our Compensation Committee employs, an informal Short-Term Incentive Plan, or STIP, in determining compensation for our NEOs. The STIP is focused on delivering the Company’s annual “SMART” objectives approved by the Board. The goals are objective, measurable and rigorous. Each of our NEOs participated in the STIP program. Compensation Committee discussion and feedback on the progress against the annual objectives is done at mid-year and at year-end. The year-end status is the basis for the STIP payout. Full year performance is determined by a rating (range 1 to 5) multiplied by the NEOs target bonus.
Long-Term Incentive Plan (LTIP)
Our Board has also approved, and our Compensation Committee employs, an informal Long-Term Incentive Plan, or LTIP in determining compensation for our NEOs. The LTIP is a long-term (3-year vesting) incentive program focused on improving the value of the Company over time and incentivizing the retention of employees as they benefit from the Company’s growth and value creation. The LTIP is granted based on performance. Restricted stock units (RSUs) that vest over 3-years were granted in December based on Company performance on “SMART” objectives approved by the Board.
Process for Determining Executive Compensation
Use of Peer Group and Benchmarking
Our compensation Peer Group was developed by identifying companies reasonably similar to us in terms of industry profile, business model, and size (market capitalization given our pre-revenue status). Given the limited number of directly comparable U.S. publicly traded sustainable lithium-ion battery recycling companies, our peer group was expanded to include broader recycling, battery manufacturing, battery materials, and patented technology companies. Below is a list of the companies the Compensation Committee approved for inclusion in our Compensation Peer Group with respect to executive officer compensation levels:
| 374Water, Inc. | CECO Environmental Corp. | ESS Tech, Inc. |
|---|---|---|
| American Battery Technology Company | Comstock Inc. | Perma-Fix Environmental Services, Inc. |
| Aris Water Solutions, Inc. | Dragonfly Energy Holdings Corp. | Quest Resource Holding Corp. |
| Arteris, Inc. | Energous Corp. | Smith Micro Software, Inc. |
| Atomera Inc. | Eos Energy Enterprises, Inc. | Telos Corp. |
The positions of our named executive officers were compared to similar positions in our compensation Peer Group, and the compensation levels for comparable positions in the Peer Group were reviewed for guidance in determining:
| • | base salaries; |
| • | target bonus opportunity under our short-term incentive plan; and |
| • | the amount of equity awards under our long-term incentive plan. |
The Compensation Committee approves base salaries, STIP awards and LTIP awards on a case-by-case basis for each NEO, taking into account, among other things, individual and Company performance, role expertise and experience and the competitive market, advancement potential, recruiting needs, internal equity, retention requirements, succession planning, and best compensation governance practices. The Compensation Committee does not tie individual compensation to specific target percentiles, but rather reviews the range of market data as one input in informing pay decisions.
Compensation of Directors
We do not compensate any of our executive directors for their service as a director and we have not adopted any policies or plans with regard to the compensation of our independent directors. However, our Board has adopted the following director compensation policy:
| ● | The Chairman will receive an annual fee of $150,000; each director other than the Chairman will receive an annual fee of $90,000; each Committee person other than the Committee Chair will receive an annual fee of $7,500 per Committee position, except for the Audit Committee position who shall be paid $10,000 annually; and each Committee Chair will receive an annual fee of $10,000 per Chair, except for the Chair of the Audit Committee shall be paid $15,000. Director compensation can either be payable in cash or payable in AQMS shares based on an election made by each Board Member. The number of shares to be issued is determined by the total fee divided by the closing spot price of the last trading day of the respective quarter being paid. |
| ● | An annual grant of $75,000 worth of restricted stock units to the Chairman, $60,000 worth of restricted stock units to the Audit Committee Chairman and $50,000 worth of restricted stock units to all other independent directors. Each board member is only eligible to be granted one allotment of annual restricted stock units. |
The following table sets forth the compensation we paid to our independent directors during the year ended December 31, 2024. In reviewing the table, please note that Edward Smith resigned from our Board in August 2024 and Mr. Yi resigned from the board in May 2024.
| Fees · Option · Stock | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earned or · Awards · Awards · All Other | ||||||||||||
| Paid in | (1) | (2) | Compensation | Total | ||||||||
| Name | Cash ($) | ($) | ($) | ($) | ($) | |||||||
| Vincent DiVito | $188 | $ | - | $40 | $ | - | $228 | |||||
| Molly Zhang | $111 | $ | - | $44 | $ | - | $155 | |||||
| Edward Smith | $83 | $ | - | $14 | $ | - | $97 | |||||
| Sung Yi | $ | - | $ | - | $ | - | $ | - | $ | - | ||
| (1) | The dollar amounts in Option Awards column above reflect the values of options as of the grant date in accordance with ASC 718, Compensation-Stock Compensation and, therefore, do not necessarily reflect actual benefits received by the individuals. Assumptions used in the calculation of these amounts are included in Note 13 to our audited consolidated financial statements for the year ended December 31, 2024. |
| (2) | Amounts shown in this column do not reflect dollar amounts actually received by our directors. Instead, these amounts reflect the aggregate grant date fair value of each restricted common stock award computed in accordance with the provisions of FASB ASC Topic 718 (using the closing price of our common stock on the date of grant). Assumptions used in the calculation of these amounts are included in Note 13, Stockholders’ Equity, of our audited consolidated financial statements for the year ended December 31, 2024. |
Stock Ownership Guidelines
In 2023, the Compensation Committee approved a stock ownership guideline for the board pursuant to which non-employee directors shall not sell shares of the Company’s common stock if after such sale the director would hold shares of the Company’s common stock having a current market value of less than three times the director’s annual base cash board fee.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.