8-K: Rimini Street Unveils 2026 Executive Incentive Plan

Rimini Street, Inc. announced its 2026 Long-Term Incentive Plan for executive officers, featuring performance units, restricted stock units, and stock options tied to financial targets.

Summary

• Rimini Street, Inc. (RMNI) approved its 2026 Long-Term Incentive Plan (LTI Plan) for executive officers, including Named Executive Officers (NEOs), effective March 2, 2026.
• The plan includes Performance Units (PSUs), Restricted Stock Units (RSUs), and Stock Options, granted under the company's 2013 Equity Incentive Plan, as amended.
• CEO Seth A. Ravin's awards are allocated as 50% PSUs, 30% RSUs, and 20% Stock Options, based on a targeted grant value of $2,640,000.
• Other NEOs (Michael L. Perica, Steven Hershkowitz, Kevin Maddock, David Rowe) received awards allocated as 40% PSUs, 40% RSUs, and 20% Stock Options, with targeted grant values ranging from $300,000 to $1,000,000 each.
• The closing sales price of the company's common stock on the Date of Grant (March 2, 2026) was $3.72, which was used to determine the number of shares for PSUs and RSUs and the exercise price for Stock Options.
• PSUs are earned over a one-year performance period (January 1, 2026, to December 31, 2026), with 50% based on Adjusted EBITDA and 50% on Total Revenue targets, potentially ranging from 0% to 200% of target.
• Earned PSUs, RSUs, and Stock Options generally vest in three equal annual installments on the first, second, and third anniversaries of the Date of Grant, subject to continued service.
• Accelerated vesting provisions apply to Mr. Ravin's PSUs under his employment agreement and to other NEOs' PSUs under specific termination or change of control scenarios.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development, as it outlines a structured executive compensation plan that aligns management incentives with key financial performance metrics. The use of an independent consultant and a mix of award types are positive governance signals, though the potential for dilution is a minor consideration.

Positives

• The 2026 LTI Plan aligns executive compensation with company performance through PSUs tied to Adjusted EBITDA and Total Revenue targets, promoting shareholder value creation.
• The use of a balanced mix of PSUs, RSUs, and Stock Options provides a comprehensive incentive structure, encouraging both long-term growth and executive retention.
• The Compensation Committee's consultation with an independent compensation consultant, Willis Towers Watson, indicates a structured and informed approach to executive compensation practices.
• The three-year vesting schedule for all award types promotes long-term commitment and retention of key executives, fostering stability in leadership.

Negatives

• The issuance of new equity awards could lead to potential dilution for existing shareholders, although the specific number of shares authorized under the 2013 Equity Plan is not detailed in this filing.
• The total targeted grant value for NEOs, particularly Mr. Ravin's $2,640,000, represents a significant compensation package, which could be subject to scrutiny depending on the company's future performance.
• Accelerated vesting provisions for PSUs under certain conditions (e.g., change of control, termination without cause) could potentially reward executives even if long-term performance goals are not fully realized under their tenure.

Risks

• Failure to achieve the target Adjusted EBITDA and Total Revenue goals for the Performance Period (January 1, 2026, to December 31, 2026) could result in lower or no payout for the performance-based awards, potentially impacting executive motivation.
• The company's stock price on the Date of Grant ($3.72) is relatively low, and if it does not appreciate significantly, the value of the stock options may not provide substantial incentive.
• The definition of 'Adjusted EBITDA' relies on exclusions (interest expense, income tax expense, depreciation, and amortization) and further adjustments as defined in a prior earnings press release, which could be complex and subject to interpretation.

Future Outlook

The 2026 Long-Term Incentive Plan sets performance targets for Adjusted EBITDA and Total Revenue for the period from January 1, 2026, to December 31, 2026, indicating the company's focus on these financial metrics for future executive compensation and, implicitly, for overall business performance.

Management Comments

• The Compensation Committee of the Rimini Street, Inc. Board of Directors, with the input of the Committee's independent compensation consultant, Willis Towers Watson, approved the Company's 2026 Long-Term Incentive Plan.

Industry Context

StockSavvy.ai notes that the structure of Rimini Street's 2026 LTI Plan, incorporating a mix of performance-based (PSUs) and time-based (RSUs, Stock Options) equity awards, is consistent with common practices in the technology and software services industry. Tying a significant portion of executive compensation to financial metrics like Adjusted EBITDA and Total Revenue is a standard approach to align management incentives with shareholder value creation. The engagement of an independent compensation consultant further reflects adherence to corporate governance best practices in executive pay.

Comparison to Industry Standards

• The allocation mix, particularly the emphasis on PSUs (50% for CEO, 40% for other NEOs), is generally considered a strong practice in executive compensation, aligning with trends seen in companies like Salesforce or Oracle, which often use performance-based awards to incentivize growth and profitability in the software sector.
• The three-year vesting schedule for RSUs and Stock Options is a common industry standard, comparable to practices at peer companies such as SAP or Workday, designed to promote long-term retention and discourage short-term decision-making.
• The use of Adjusted EBITDA and Total Revenue as performance metrics for PSUs is typical for growth-oriented software and services companies, similar to how companies like ServiceNow or Adobe might structure their performance incentives, focusing on both top-line growth and operational efficiency.
• The engagement of an independent compensation consultant (Willis Towers Watson) is a widely accepted corporate governance practice, mirroring the approach of most large publicly traded companies to ensure fairness and market competitiveness in executive compensation.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for dilution from new equity awards, but also potential for increased shareholder value if executive incentives drive strong financial performance.
• Executive Officers: Direct impact on their compensation structure, aligning a significant portion of their future earnings with the company's financial and stock performance.
• Employees: While not directly impacting non-executive employees, a well-structured executive compensation plan can signal stability and a clear strategic direction for the company.

Next Steps

• The one-year performance period for PSUs will run from January 1, 2026, to December 31, 2026, after which the achievement against targets will be calculated.
• Earned PSUs, RSUs, and Stock Options will vest in equal annual installments on the first, second, and third anniversaries of the Date of Grant (March 2, 2026), subject to continued service.
• The company will report its Adjusted EBITDA and Total Revenue for the fiscal year ending December 31, 2026, which will determine the PSU payout factor.

Key Dates

Recommendation

This filing details a standard executive long-term incentive plan, which is a routine corporate governance matter. It does not contain new financial results, strategic shifts, or other information that would fundamentally alter the investment thesis for Rimini Street, Inc. Therefore, a 'hold' recommendation is appropriate, as the filing provides no new catalysts for a 'buy' or 'sell' decision, but rather reinforces ongoing corporate practices.

Keywords

Rimini Street, RMNI, Executive Compensation, Long-Term Incentive Plan, LTI Plan, Performance Units, PSUs, Restricted Stock Units, RSUs, Stock Options, Equity Incentive Plan, Corporate Governance, SEC Filing, 8-K, Adjusted EBITDA, Total Revenue