| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On January 16, 2025, Stem, Inc. (the “Company”) announced that the Company’s board of directors (the “Board”) has appointed Mr. Arun Narayanan, age 50, as the Company’s Chief Executive Officer (“CEO”), effective January 27, 2025. Mr. Narayanan succeeds Mr. David Buzby, who currently serves as the Company’s Interim Chief Executive Officer and Executive Chair. Effective January 27, 2025, Mr. Buzby will serve as the non-executive Chair of the Board.
Mr. Narayanan has served as the chief executive officer at RES Digital Solutions, a division of RES, a global independent renewable energy company, since April 2024. Prior to serving in that role, he served as Chief Digital Officer at RES from August 2023 through March 2024. Before joining RES, Mr. Narayanan served as the Chief Data Officer of Anglo American plc, a global mining company, from January 2018 to June 2023, and held various strategy, digital, technical and management positions within SLB (formerly Schlumberger Limited), an energy technology company, in the United States, Europe and Asia for more than 20 years.
On January 14, 2025, Mr. Narayanan entered into the Company’s form of executive employment agreement (the “Agreement”) with the Company. Under the Agreement, Mr. Narayanan will receive an annualized base salary of $575,000. In connection with his appointment, he will also receive (a) a sign-on cash bonus of $50,000, subject to repayment under certain circumstances; (b) a sign-on equity award of (i) 225,000 restricted stock units (“RSUs”), which will vest ratably in two equal annual installments, with the first 50% vesting on March 7, 2026, and (ii) 75,000 performance-based restricted stock units (“PSUs”), which will vest ratably in two equal annual installments, with the first 50% vesting on March 7, 2026, subject to achievement of performance metrics to be set forth in the award agreement governing their grant; and (c) an initial long-term incentive equity award, in the form of 750,000 RSUs, which will vest ratably in three equal annual installments, with the first 33% vesting on March 7, 2026, and 250,000 PSUs, which will vest ratably in three equal annual installments, with the first 33% vesting on March 7, 2026, subject to achievement of performance metrics to be set forth in the award agreement governing their grant. In addition, Mr. Narayanan will be eligible to receive a cash incentive award under the Company’s annual incentive plan with a target bonus opportunity of 100% of his annual base salary, to be prorated for 2025, and will be eligible to receive annual equity awards in future years in the form of long-term incentive awards as awarded to other Company executive officers. He will also be entitled to certain severance and change-in-control benefits, as set forth in the Agreement.
Additionally, in connection with Mr. Buzby continuing to serve as interim Chief Executive Officer and Executive Chair through January 26, 2025, Mr. Buzby entered into an amendment to his executive employment agreement with the Company (as amended, the “Amended Agreement”). Under the Amended Agreement, Mr. Buzby will continue to serve as Interim CEO and Executive Chair until January 26, 2025, and will continue to receive an annualized base salary of $600,000, to be prorated for his service as Interim CEO and Executive Chair in 2025. Mr. Buzby will also receive (a) a cash incentive award under the Company’s annual incentive plan with a target bonus opportunity of 125% of his annual base salary, subject to the Company’s performance and a guaranteed minimum payout of 75% of the target bonus opportunity, to be prorated for his service as Interim CEO and Executive Chair in 2025, and (b) a grant of 66,667 stock options, at an exercise price equal to fair market value on the date of grant, vesting in full on January 26, 2025.
The foregoing is a summary description of certain material terms of the Agreement and the Amended Agreement and, by its nature, is incomplete. It is qualified in its entirety by the full text of the Agreement and the Amended Agreement, copies of which will be filed with the Company’s Quarterly Report on Form 10-Q for the quarter ending March 30, 2025.
There is no arrangement or understanding between Mr. Narayanan and any other person pursuant to which he was appointed as an officer or director of the Company. Mr. Narayanan has no family relationship with any director or executive officer of the Company, or any person nominated or chosen by the Company to become a director or executive officer. In addition, he is not party to any transaction required to be disclosed under Item 404(a) of Regulation S-K.
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