DEF: Holley Inc. Sets 2026 Annual Meeting Agenda, Board & Compensation

Holley Inc. announces its 2026 Annual Meeting of Stockholders, detailing proposals for director elections, auditor ratification, executive compensation, and an increase in authorized shares for its incentive plan.

Summary

• The 2026 Annual Meeting of Stockholders will be held virtually on Friday, May 1, 2026, at 8:00 a.m. Central Time, with a record date of March 9, 2026.
• Key proposals include the election of two Class II directors, ratification of Grant Thornton LLP as the independent registered public accounting firm for fiscal 2026, an advisory vote on named executive officer (NEO) compensation for fiscal year 2025, an advisory vote on the frequency of future Say-on-Pay votes (Board recommends 'ONE YEAR'), and approval of the Amended 2021 Omnibus Incentive Plan to increase authorized shares by 5,000,000 to a total of 13,850,000.
• Holley Inc. reported a net income of $19,175,000 in 2025, a significant improvement from a net loss of $(23,235,000) in 2024.
• Total Shareholder Return (TSR) for an initial $100 investment increased from $62.01 in 2024 to $84.80 in 2025.
• Executive compensation for Matthew J. Stevenson (President and CEO) totaled $4,381,737 in 2025, Jesse Weaver (CFO) $2,383,209, and Carly Kennedy (EVP, General Counsel & Corporate Secretary) $1,397,302.
• The minimum threshold for 2025 annual bonuses was met, based on adjusted EBITDA targets, a change from 2024 where the threshold was not met and discretionary awards were given.
• The Board of Directors consists of eight members, with six identified as independent, and maintains separate roles for the Chairman and CEO.
• The company's strategy focuses on investing in brands, categories, and vehicle platforms with growth potential, supporting new product innovation, improving digital merchandising, strengthening channel partnerships, and expanding into adjacent markets.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive filing, reflecting improved financial performance (net income, TSR) and robust corporate governance. However, the significant increase in authorized shares for the incentive plan and the out-of-the-money status of many existing equity awards introduce potential dilution and compensation challenges.

Positives

• Net Income significantly improved from a loss of $23,235,000 in 2024 to a profit of $19,175,000 in 2025.
• Total Shareholder Return (TSR) increased from $62.01 in 2024 to $84.80 in 2025 (based on a $100 initial investment).
• The minimum threshold for 2025 annual bonuses was met, indicating achievement of adjusted EBITDA targets, a positive shift from 2024 where the threshold was not met.
• The company exhibits strong corporate governance, including separate Chairman/CEO roles, 100% independent Board committees, a robust director search process that includes women and minorities, and active Board oversight of strategy, risk, and ESG matters.
• The Amended Plan incorporates best practices such as no repricing of awards without stockholder approval, no discounted stock options or stock appreciation rights, a 10-year maximum term for options/SARs, a clawback policy, no automatic grants, no tax gross-ups, and double-trigger vesting for awards in a change of control scenario.
• The Board unanimously recommends 'FOR' all proposals, including the election of directors, ratification of the independent auditor, the Say-on-Pay proposal, and the approval of the Amended Plan.

Negatives

• The minimum threshold for 2024 annual bonuses was not met, requiring discretionary recognition awards for executives.
• The proposal to increase the number of authorized shares for the 2021 Omnibus Incentive Plan by 5,000,000 shares could lead to dilution for existing shareholders.
• The weighted-average exercise price of outstanding options, warrants, and rights as of December 31, 2025, was $10.99, which is significantly higher than the common stock's closing price of $4.13 on the same date, indicating many equity awards are currently out-of-the-money.

Risks

• Risks and uncertainties that could cause actual results to differ significantly from management's expectations are described in the 2025 Annual Report on Form 10-K.

Future Outlook

The company's strategy is centered on investing behind brands, categories, and vehicle platforms with strong consumer affinity and growth potential, supporting new product innovation, improving product data and digital merchandising, strengthening relationships with channel partners, and pursuing disciplined expansion into adjacent categories and markets. This approach, combined with operational execution and portfolio management focus, is expected to support long-term growth and share gains in the markets served. The Board believes the Amended Plan is essential to attract and retain talent and align interests with stockholders for long-range success. If stockholders approve the 'ONE YEAR' frequency for Say-on-Pay, the next vote is expected at the 2027 annual meeting.

Management Comments

• "I am pleased to present the 2026 Holley Inc. proxy statement, which contains information about Holleys strategic direction, executive compensation, governance, and Board of Directors composition." Matthew Stevenson, President and Chief Executive Officer.
• "We appreciate your continued interest in and support of Holley and look forward to your participation in the Annual Meeting." Matthew Stevenson, President and Chief Executive Officer.
• "Our Board unanimously recommends that you vote: (1)FOR the election of directors; (2)FOR the ratification of the appointment of Grant Thornton LLP as Holley Inc.'s independent registered public accounting firm for fiscal 2026; (3)FOR Say-on-Pay; (4)ONE YEAR with respect to the frequency of future Say-on-Pay votes; and (5)FOR the approval of the Amended Plan."
• "The Board of Directors believes that a frequency of every one year for the advisory vote on executive compensation is the optimal interval for conducting a say-on-pay vote. The Board of Directors believes that this frequency is appropriate as an annual vote would provide stockholders with the opportunity to express their views on a regular basis."
• "The Compensation and Talent Committee and the Board of Directors believe that the Companys executive compensation program for the fiscal year ended December 31, 2025 aligned with the Companys performance and stockholder value, as well as the Compensation and Talent Committees philosophy."

Industry Context

StockSavvy.ai notes that Holley Inc.'s focus on high-performance automotive aftermarket products positions it within a niche but passionate enthusiast market. The strategy of aligning commercial and product efforts with key vehicle platforms and expanding into adjacent categories is a common approach for growth in fragmented markets. The emphasis on digital merchandising and strengthening channel partnerships reflects broader industry trends towards omnichannel sales and improved customer engagement. The increase in authorized shares for the incentive plan is a typical move for public companies seeking to attract and retain talent in competitive industries, though the potential for dilution is a factor for investors to consider.

Comparison to Industry Standards

• The company's burn rate for equity awards (2.8% in 2025) should be compared to industry peers in the automotive aftermarket or specialty manufacturing sectors. For example, a typical burn rate for mature companies might be lower, while growth companies might have higher rates. Without specific peer data in the filing, a direct comparison is limited.
• The increase in net income from a loss to a profit in 2025 is a positive turnaround, but its magnitude relative to industry growth rates or competitor performance would require external data for a comprehensive assessment.
• The executive compensation structure, with a mix of base salary, annual cash incentives (tied to adjusted EBITDA), and long-term equity awards (RSUs and PSUs), is standard for publicly traded companies. The shift from stock options to PSUs in the long-term incentive mix is a common practice to better align executive incentives with shareholder value creation through performance-based metrics.

Management Changes

Corporate Governance

Related Party Transactions

• Holley Parent Holdings, LLC (affiliates of Sentinel Capital Partners) beneficially owns 20.4% of the company's common stock and has rights to designate nominees for election to the Board.
• MidOcean Partners beneficially owns 13.2% of the company's common stock and has rights to designate nominees for election to the Board.
• Non-Disclosure Agreements allow directors affiliated with Sentinel Capital Partners (Owen Basham, James Coady) and MidOcean US Advisor, LP (Matthew Rubel, Graham Clempson) to share confidential company information with their respective firms, subject to strict confidentiality terms.
• MidOcean agreed to an earn-out in respect of 2,187,500 Earn-Out Shares, with the first tranche of 1,093,750 shares vesting in 2022 (stock price exceeded $13.00) and the second tranche of 1,093,750 shares vesting if the stock price exceeds $15.00 by July 16, 2028.
• MidOcean purchased 4,666,667 Private Warrants at $1.50 each, generating $7,000,000, with an exercise price of $11.50 per share.
• A Registration Rights Agreement grants MidOcean, the Company, and the Holley Stockholder rights to register for resale certain shares of Common Stock and other equity securities.

Stakeholder Impact

• **Shareholders**: Will vote on key governance matters, including director elections, auditor ratification, executive compensation, and a significant increase in authorized shares for the incentive plan, which could lead to dilution. The improved financial performance (net income, TSR) is a positive for shareholders.
• **Employees**: The proposed increase in authorized shares for the 2021 Omnibus Incentive Plan is intended to attract, motivate, and retain employees through equity awards, aligning their interests with the company's long-term success.
• **Management**: Executive compensation details, including salary increases and performance-based bonuses, are outlined. The clawback policy increases accountability for executive officers.
• **Directors**: Compensation structure (cash retainers, RSUs) and re-election proposals are detailed. The robust governance framework impacts their responsibilities and oversight duties.
• **Auditor**: Grant Thornton LLP's appointment for fiscal 2026 is up for ratification, impacting their ongoing relationship with the company.

Next Steps

• Hold the 2026 Annual Meeting of Stockholders on May 1, 2026, to vote on proposals.
• Elect two Class II directors (Ginger Jones and James Coady) for a three-year term.
• Ratify the appointment of Grant Thornton LLP as the independent registered public accounting firm for fiscal 2026.
• Conduct an advisory vote on named executive officer compensation for fiscal year ended December 31, 2025.
• Conduct an advisory vote on the frequency of future Say-on-Pay votes (Board recommends 'ONE YEAR').
• Approve the 2021 Omnibus Incentive Plan, as amended, to increase authorized shares.
• File a Current Report on Form 8-K with the SEC within four business days following the Annual Meeting to announce final voting results.
• Consider stockholder proposals for the 2027 annual meeting by November 19, 2026 (Rule 14a-8) or between January 1, 2027, and January 31, 2027 (Advance Notice).
• MidOcean's second tranche of 1,093,750 Earn-Out Shares will vest if the common stock equals or exceeds $15.00 per share for 20 trading days within 30 trading days, or upon a qualifying transaction, by July 16, 2028.

Key Dates

Recommendation

Holley Inc. shows a positive turnaround in net income and TSR for 2025, indicating improved operational performance and shareholder value creation. The robust corporate governance practices are also a strong point. However, the proposal to significantly increase the share reserve for the incentive plan introduces potential dilution, and the current market price of $4.13 is well below the exercise price of many outstanding options and warrants ($10.99 weighted average, $11.50 for private warrants), suggesting a substantial recovery is needed for these to become in-the-money. While the company is moving in the right direction, the dilution risk and the current valuation relative to past equity grants warrant a 'Hold' recommendation, advising investors to monitor execution of the strategic plan and the impact of the increased share pool.

Keywords

Holley Inc., HLLY, Proxy Statement, Annual Meeting, Corporate Governance, Executive Compensation, Incentive Plan, Director Election, Auditor Ratification, Automotive Aftermarket, Financial Performance, Net Income, Total Shareholder Return, Equity Awards, Dilution