SCHEDULE: REE Automotive CEO Increases Stake, New Equity Awards

REE Automotive Ltd.'s CEO, Daniel Barel, has filed a Schedule 13D, disclosing increased beneficial ownership and new significant equity awards approved by shareholders.

Summary

• Daniel Barel, CEO, Co-Founder, and a director of REE Automotive Ltd., filed a Schedule 13D, superseding his previously filed Schedule 13G.
• He beneficially owns 1,821,228 Class A Ordinary Shares, representing 6% of the total outstanding Class A Ordinary Shares.
• Including Class B Ordinary Shares, his holdings represent approximately 27% of the Issuer's outstanding voting power as of December 11, 2025.
• On November 13, 2025, the Company's shareholders approved a special cash bonus award for 2024 and amendments to Mr. Barel's employment terms, effective July 1, 2025.
• The amended terms include an annual equity award of Restricted Share Units (RSUs) with a fair value of $2,000,000, vesting quarterly in equal portions over a three-year period commencing July 1, 2025, and annually thereafter.
• A one-time 'CEO Retention Grant' of RSUs equal to 10% of the Company's share capital on a fully diluted basis was also approved.
• 60% of the CEO Retention Grant will vest upon the consummation of a 'Strategic Transaction'.
• The remaining 40% of the CEO Retention Grant will vest based on the Company's stock achieving and maintaining closing prices of at least $2, $3, $4, and $5 for 30 consecutive trading days (10% at each price point).
• A 'Strategic Transaction' includes a merger, acquisition, or other 'Change of Control' transaction, a strategic commercial agreement generating annual revenue exceeding $30 million, or any other similar strategic agreement approved by the Board of Directors.
• Both the annual Equity Awards and the CEO Retention Grant will fully accelerate vesting in the event of a 'Change of Control' transaction, which includes a Merger/Sale event.

Sentiment

Score: 7

Explanation: The filing indicates strong alignment of CEO incentives with strategic growth and stock performance, which is generally positive. However, the significant potential dilution from the CEO Retention Grant could be a concern for existing shareholders.

Positives

• Shareholders approved significant equity incentives for the CEO, aligning his interests with long-term company performance and shareholder value creation.
• The CEO Retention Grant ties a substantial portion of the CEO's compensation to achieving specific stock price targets ($2, $3, $4, $5) and the consummation of strategic transactions, indicating a clear focus on growth and value realization.
• The definition of a 'Strategic Transaction' includes revenue-generating commercial agreements exceeding $30 million annually, highlighting a strategic emphasis on significant business development and commercialization.

Negatives

• The CEO Retention Grant of 10% of the Company's fully diluted share capital represents a substantial potential dilution for existing shareholders.
• The immediate vesting of equity awards upon a change of control or merger/sale event could potentially incentivize short-term transactions over long-term organic growth strategies.

Risks

• There is a risk of further dilution to existing shareholders if the Company's fully diluted share capital increases beyond the level established on November 13, 2025, as additional RSUs would be granted to the CEO to maintain the 10% ownership target of the CEO Retention Grant.

Future Outlook

The company's future outlook, as implied by the CEO's compensation structure, is focused on achieving significant strategic transactions, including mergers, acquisitions, or commercial agreements generating over $30 million in annual revenue, and increasing the stock price to targets of $2, $3, $4, and $5 per share.

Management Comments

• The acquisition of the Class A Ordinary Shares by the Reporting Person is for investment purposes.
• The Reporting Person reserves the right to change his plans and intentions at any time and to take any actions he may deem appropriate with respect to his investment in the Issuer.

Industry Context

This filing reflects a common practice in the automotive technology and EV sector where executive compensation is heavily weighted towards equity awards to align management incentives with long-term shareholder value creation, particularly in growth-stage companies. The focus on 'Strategic Transactions' and stock price performance targets suggests a drive towards significant business milestones or potential M&A activity, which is prevalent in industries undergoing rapid transformation and consolidation.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for significant dilution from the CEO Retention Grant (10% of fully diluted share capital). However, the compensation structure aims to align the CEO's interests with shareholder value creation through strategic transactions and stock price appreciation.
• Management/Employees: The CEO, Daniel Barel, receives substantial long-term equity incentives, potentially motivating him to drive company growth and achieve strategic milestones.

Next Steps

• Continued vesting of annual equity awards quarterly over three years, commencing July 1, 2025.
• Achievement of a 'Strategic Transaction' to trigger 60% vesting of the CEO Retention Grant.
• Achievement of specific stock price targets ($2, $3, $4, $5 for 30 consecutive trading days) for the remaining 40% vesting of the CEO Retention Grant.
• Potential future acquisitions or dispositions of securities by the Reporting Person based on market conditions and other factors.

Key Dates

Recommendation

The filing primarily details executive compensation and beneficial ownership, which were previously approved. While the substantial equity awards for the CEO align his interests with long-term growth and stock performance, the potential for significant dilution from the 10% CEO Retention Grant warrants caution. Investors should hold and monitor the company's progress on achieving the strategic transactions and stock price targets outlined in the compensation plan before making further investment decisions.

Keywords

REE Automotive, Schedule 13D, Daniel Barel, Beneficial Ownership, Equity Awards, CEO Compensation, RSUs, Strategic Transaction, Corporate Governance, Shareholder Approval, Class A Ordinary Shares, Voting Power