CEA Industries Inc. (NASDAQ:CEAD), a micro-cap agriculture services company with a market capitalization of $6.6 million, has announced the adoption of a new compensation plan for its directors, effective from Monday.
According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value metrics, despite facing profitability challenges in the current fiscal year. The plan, disclosed in a recent SEC filing, outlines the payment structure and equity awards for the company's board members.
According to the filing, independent directors will now receive an annual cash fee of $25,000, payable in quarterly installments. This fee compensates for their attendance at board and committee meetings, telephonic meetings, written consent actions, consultations with management, and other directorial services.
In addition to cash compensation, independent directors will also receive equity in the form of restricted stock units (RSUs) valued at $25,000 upon their initial election or appointment. The RSUs will vest 50% at the time of grant and the remaining 50% on the first anniversary of the grant date. Furthermore, each January, continuing independent directors will receive fully vested RSUs valued at $25,000.
Additional compensation is provided for those serving in leadership roles on the board. The Audit Committee Chairman will receive an extra $10,000 annually, while other committee chairmen will receive an additional $5,000 annually. These payments are also made quarterly.
The company clarified that executive directors, who are part of the company's management, do not receive separate compensation for their board service. Moreover, all directors are responsible for any income taxes due on stock issuance and RSU vesting and settlement, and they will be reimbursed for out-of-pocket expenses related to their board duties.
This compensation restructuring comes as the company faces significant challenges, with InvestingPro data showing a 67.5% year-over-year revenue decline and negative gross profit margins. However, the company maintains strong liquidity with a current ratio of 11.4, indicating robust short-term financial stability.
The SEC filing also detailed the outcomes of the company's Annual Meeting held on Sunday, December 17, 2024. For investors seeking deeper insights, InvestingPro offers 8 additional key tips about CEA Industries' financial health, valuation metrics, and market performance trends.
Shareholders elected five directors to serve until the 2025 annual meeting, ratified the appointment of Sadler, Gibb & Associates, LLC as the independent registered public accounting firm for the fiscal year ending December 31, 2024, approved a non-binding advisory resolution on executive compensation for the 2025 fiscal year, and determined the frequency of future advisory votes on executive compensation to be every three years.
The filing also included the appointment of committee members for the Audit, Compensation, and Nominations Committees following the Annual Meeting.
This news article is based on the latest 8-K filing by CEA Industries with the Securities and Exchange Commission.
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