Mastech Digital, Inc DEF 14A, filed Apr 9, 2026
Mastech Digital, Inc. (MHH)
About this DEF 14A
Mastech Digital, Inc filed this DEF 14A on April 9, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
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Preliminary Proxy Statement |
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Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee paid previously with preliminary materials. |
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
MASTECH DIGITAL, INC.
1305 Cherrington Parkway
Building 210, Suite 400
Moon Township, Pennsylvania 15108
Telephone: (412) 787-2100
April 9, 2026
Dear Mastech Digital, Inc. Shareholder:
You are cordially invited to attend our 2026 Annual Meeting of Shareholders (the “Annual Meeting”) to be held at Mastech Digital, Inc.’s office, at 511 East John Carpenter Freeway, Suite 500, Las Colinas, TX 75062 on Wednesday, May 13, 2026, at 9:00 a.m. Central Time.
The following pages contain the formal Notice of the Annual Meeting and the Proxy Statement. At this year’s Annual Meeting, you will be asked to (i) vote on the election of Class III directors; (ii) approve an amendment to the Company’s Stock Incentive Plan, as amended and restated effective as of May 14, 2024 and further amended on May 14, 2025 (as amended, “Plan”), to allow for the issuance of restricted stock units (“RSUs”); and to (iii) to cast an advisory (non-binding) vote to approve named executive officer compensation.. Please read the accompanying Notice of Annual Meeting and Proxy Statement carefully. Whether or not you plan to attend, you can ensure that your shares are represented at the Annual Meeting by promptly completing, signing, dating and returning the enclosed proxy card in the envelope provided.
Thank you for your continued support.
Sincerely, |
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Nirav Patel |
President and Chief Executive Officer |
MASTECH DIGITAL, INC.
1305 Cherrington Parkway
Building 210, Suite 400
Moon Township, Pennsylvania 15108
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 13, 2026
The Annual Meeting of Shareholders (the “Annual Meeting”) of Mastech Digital, Inc. (the “Company”) will be held on Wednesday, May 13, 2026, at 9:00 a.m. Central Time at the Company’s office at 511 East John Carpenter Freeway, Suite 500, Las Colinas, TX 75062, to consider and act upon the following matters:
1. The election of two (2) Class III directors to serve for three-year term or until their respective successors shall have been selected or qualified;
2. Vote to approve an amendment to the Company’s Stock Incentive Plan, as amended and restated on May 14, 2024 and further amended on May 14, 2025 (as amended, “Plan”), to allow for the issuance of restricted stock units (“RSUs”);
3. Advisory (non-binding) vote to approve named executive officer compensation; and
4. The transaction of such other business as may properly come before the meeting and any adjournment or postponement thereof.
The Board of Directors has established the close of business on March 31, 2026, as the record date for the determination of the shareholders entitled to notice of and to vote at the Annual Meeting.
PLEASE VOTE AS SOON AS POSSIBLE TO ENSURE THAT YOUR VOTE IS RECORDED PROMPTLY EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON. YOU HAVE THREE OPTIONS FOR SUBMITTING YOUR VOTE BEFORE THE ANNUAL MEETING: VIA THE INTERNET, BY PHONE OR BY MAIL. FOR FURTHER DETAILS, SEE “VOTING RIGHTS AND SOLICITATION” IN THE PROXY STATEMENT. IF YOU HAVE INTERNET ACCESS, WE ENCOURAGE YOU TO RECORD YOUR VOTE ON THE INTERNET. IT IS CONVENIENT, AND IT SAVES THE COMPANY SIGNIFICANT PRINTING AND PROCESSING COSTS.
By Order of the Board of Directors |
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Jenna Ford Lacey |
General Counsel and Corporate Secretary |
Moon Township, Pennsylvania
April 9, 2026
TABLE OF CONTENTS
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Changes to Our Board Composition During the 2024 Calendar Year |
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PROPOSAL NO. 3—ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
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POLICIES AND PROCEDURES FOR APPROVING RELATED PERSON TRANSACTIONS |
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MASTECH DIGITAL, INC.
1305 Cherrington Parkway
Building 210, Suite 400
Moon Township, Pennsylvania 15108
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS
To Be Held on May 13, 2026
This Proxy Statement is being furnished to the shareholders of Mastech Digital, Inc., a Pennsylvania corporation (“Mastech” or the “Company”), in connection with the solicitation by the Board of Directors of the Company (the “Board of Directors” or the “Board”) of proxies to be voted at the Annual Meeting of Shareholders (the “Annual Meeting”) scheduled to be held on Wednesday, May 13, 2026, at 9:00 a.m. Central Time, at the Company’s office at 511 East John Carpenter Freeway, Suite 500, Las Colinas, TX 75062, or at any adjournment or postponement thereof. This Proxy Statement is being mailed to shareholders on or about April 13, 2026.
PURPOSE OF THE MEETING
The specific proposals to be considered and acted upon at the Annual Meeting are summarized in the accompanying Notice of Annual Meeting of Shareholders. The proposals are described in more detail in this Proxy Statement.
VOTING RIGHTS AND SOLICITATION
VOTING
Only holders of record of Mastech common stock, par value $0.01 per share (“Common Stock”), as of the close of business on March 31, 2026 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements thereof. On March 31, 2026, there were 11,875,706 shares of Common Stock outstanding.
The presence in person or by proxy of the shareholders owning at least a majority of the total number of outstanding shares of Common Stock entitled to vote at the Annual Meeting is required to constitute a quorum for the transaction of business at the Annual Meeting. The holders of Common Stock have one vote for each share held by them as of the Record Date. Shareholders may not cumulate votes.
Your shareholder vote is important. Please vote as soon as possible to ensure that your vote is recorded promptly, even if you plan to attend the annual meeting in person. You have three options for submitting your vote before the annual meeting: via the Internet, by phone or by mail. If you have Internet access, we encourage you to record your vote on the Internet. It is convenient, it saves us significant printing and processing costs and your vote is recorded immediately. Internet and telephonic voting will be available until 11:59 p.m. Eastern Time on May 12, 2026. If you hold your shares in your name as a registered holder and not through a bank or brokerage firm, you may submit your vote in person. The vote you cast in person will supersede any previous votes that you submitted, whether by Internet, phone or mail. If you have any questions about submitting your vote, please call our Investor Relations department at (800) 627-8323.
PROXIES
All shares of Common Stock represented by proxies that are properly signed, completed and returned to the Corporate Secretary of the Company at 1305 Cherrington Parkway, Building 210, Suite 400, Moon Township, PA 15108 at or prior to the Annual Meeting will be voted as specified in the proxy. If a proxy is signed and returned but does not provide instructions as to the shareholder’s vote, the shares will be voted (a) FOR the election of the Board’s nominees to the Board of Directors; (b) FOR the approval of the amendment to the Company’s Stock Incentive Plan, as amended and restated effective as of May 14, 2024 and further amended on May 14, 2025 (as amended, “Plan”), to allow for the issuance of restricted stock units (“RSUs”); and (c) FOR approval of the advisory (non-binding) proposal on named executive officer compensation. We are not aware of any business for consideration at the Annual Meeting other than as described in the Proxy Statement; however, if matters are properly brought before the Annual Meeting or any adjournment or postponement thereof, then the persons appointed as proxies will have the discretion to vote or act thereon according
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to their best judgment. A shareholder giving a proxy has the power to revoke it at any time prior to its exercise by delivering to the Corporate Secretary of the Company a written revocation or a duly executed proxy bearing a later date (although no revocation shall be effective until notice thereof has been given to the Corporate Secretary of the Company), or by attendance at the meeting and voting his or her shares in person.
Under Pennsylvania law, proxies marked ABSTAIN are not considered to be cast votes, but they will count for purposes of determining whether there is a quorum and for purposes of determining the voting power and number of shares entitled to vote at the Annual Meeting. As a result, such abstentions will have no effect on the approval of any matter to come before the meeting. Broker non-votes will be counted for purposes of determining whether there is a quorum at the Annual Meeting, but will have no effect on the approval of any matter to come before the meeting.
SOLICITATION OF PROXIES
All costs of solicitation of proxies will be borne by the Company. In addition to solicitations by mail, the Company’s directors, officers and regular employees, without additional remuneration, may solicit proxies by telephone, facsimile and personal interviews. Copies of solicitation material will be timely furnished to brokerage houses, fiduciaries and custodians holding shares in their names that are beneficially owned by others so that they may forward this solicitation material to such beneficial owners and the Company will reimburse them for reasonable out-of-pocket expenses in connection with the distribution of proxy solicitation material.
Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on May 13, 2026.
Complete copies of this proxy statement and our annual report for the year ended December 31, 2025 are available at http://www.mastechdigital.com/annual-meeting
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL
The Company’s Amended and Restated Articles of Incorporation (“Articles”) currently provide that the number of directors constituting the entire Board shall be no less than three (3) and no more than nine (9). The Board is divided into three (3) classes, with each class to be as nearly equal in number as possible and the classes to be elected for staggered terms of three (3) years as follows: two (2) Class III directors whose terms expire in 2026; two (2) Class I directors whose terms expire in 2027; and two (2) Class II directors whose terms expire in 2028. Therefore, directors are being elected to Class III at the Annual Meeting for a three-year term expiring in the year 2029.
Accordingly, the names of the persons nominated for election as Class III directors are Arun Nayar and Srinivas Kandula, both of whom presently serve as Class III directors. The persons appointed as proxies intend to vote the shares represented by them at the Annual Meeting for the election of Arun Nayar and Srinivas Kandula as Class III directors. The Board of Directors knows of no reason why Arun Nayar and Srinivas Kandula would be unable to serve as Class III directors. If, at the time of the Annual Meeting, Mr. Arun Nayar or Dr. Srinivas Kandula is unable or unwilling to serve as a Class III director, the persons named as proxies intend to vote for such substitute as may be nominated by the Board of Directors. All nominations were made by the Nominating and Corporate Governance Committee, as further described under the caption “Nominating and Corporate Governance Committee” below.
CHANGES TO OUR BOARD COMPOSITION DURING THE 2025 CALENDAR YEAR
Bonnie K. Smith, a Class II director, elected not to seek reelection as a Class II director at the 2025 Annual Meeting.
Effective January 6, 2025, Vivek Gupta resigned as a Class II director and was replaced by Nirav Patel, who was appointed as the Company’s President and Chief Executive Officer effective on that date.
The following section captioned “Business Experience of Directors” sets forth certain information concerning the Board nominees for election to the Board of Directors at the Annual Meeting, as well as information about our other Directors.
BUSINESS EXPERIENCE OF DIRECTORS
Director Qualification Standards
We will only consider candidates for director individuals who possess the highest personal and professional ethics, integrity and values, and who are committed to representing the long-term interests of our shareholders. In evaluating candidates for nomination as a director, the Nominating and Corporate Governance Committee will also consider other criteria, including current or recent experience as a chief executive officer of a public company or as a leader of another major complex organization in the public or private sector; business and financial expertise; geography; experience as a director of a public company; gender and ethnic diversity on the Board; independence; knowledge of the Company’s business and industry; and general criteria such as independent thought, practical wisdom and mature judgment. In addition, directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively and should be committed to serving on the Board for an extended period of time. One or more of our directors must possess the education or experience required to qualify as an audit committee financial expert.
Nominees for Directors in Class III Whose Terms will Expire in 2029
Arun Nayar, age 75, has served as a Director since August 2024. Mr. Nayar has served on the board of directors of GFL Environmental Inc. (NYSE: GFL) since June 2018, and Amcor PLC (NYSE: AMCR) since June 2019. He has also served as a Senior Advisor to McKinsey and Company since May 2016 and as the Global Advisory Council of ServiceNow, Inc. (NYSE: NOW) since August 2022. Previously, from January 2012 to December 2015, Mr. Nayar served as Executive Vice President and Chief Financial Officer of Tyco International, a $10 billion+ fire protection and security company. He holds a degree of Fellow Chartered accountant from the Institute of Chartered Accountants in England and Wales. Mr. Nayar’s experience and expertise as a Chief Financial Officer of a publicly-traded company led to the Board’s conclusion that he should serve as a Director of the Company.
Srinivas Kandula, age 62, has served as a Director since August 2024. Dr. Kandula is an author, educator, business leader, and innovator who leads strategy and operations at the Centre for Organization Development (CoD), Hyderabad, India. He was formerly the Chairman of the board of directors and Chief Executive Officer of Capgemini India where he was responsible for leading the
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Company’s operations across India and building leadership quotient globally. Previously, Dr. Kandula held the roles of Chief People Officer, Executive Vice President, and Member of the Executive Council at iGATE Corporation (“iGate”). Dr. Kandula’s experience as a Chief Executive Officer of a major India organization led to the Board’s conclusion that he should serve as a Director of the Company.
Directors in Class I Whose Terms will Expire in 2027
Sunil Wadhwani, age 73, has served as a Director and Co-Chairman since our formation in 2008. Mr. Wadhwani was the Co-Founder of iGATE, a provider of integrated technology and operations-based information technology solutions, and Mastech. Mr. Wadhwani served as Co-Chairman and Chief Executive Officer of iGATE from 1986 until April 2008, when he resigned as Chief Executive Officer, but remained a director of iGATE and Co-Chairman of the iGATE Board until July 2015. From 1986 through September 1996, Mr. Wadhwani served as Chairman of iGATE and held several other offices, including President and Chief Executive Officer. Mr. Wadhwani has a Bachelor’s degree from the Indian Institute of Technology and a Master’s degree from Carnegie Mellon University. Mr. Wadhwani also serves as the Managing Partner of SWAT Capital Administrator LLC and as the principal executive officer of the Wadhwani Family Office. Mr. Wadhwani’s history and experience with the Company since its inception led to the Board’s conclusion that he should continue as a Director of the Company.
Vladimir Rak, age 49, has served as a Director since April 2022. Mr. Rak is the Executive Vice President & Chief Technology Officer at DICK’S Sporting Goods, Inc., a role he has held since April 2020. In this role, Mr. Rak is responsible for that company’s technology Product Management, Design & Engineering and Foundational Platforms & Services. Prior to joining DICK’S, he served as Senior Vice President & Chief Technology Officer at Merck & Co. from October 2019 to March 2020. Prior to DICK’S Sporting Goods and Merck, Mr. Rak held senior executive roles at Nike, Inc. from February 2016 to October 2019 and at the Walt Disney Company from September 2011 to January 2016. Mr. Rak graduated from Jacksonville University with an undergraduate degree in Computer Information Systems. Mr. Rak’s expertise within the IT industry with larger global enterprises and his experience as a buyer of technology services led to the Board’s conclusion that he should continue as a Director of the Company.
Directors in Class II Whose Terms will Expire in 2028
Ashok Trivedi, age 76, has served as a Director and Co-Chairman since our formation in 2008. Mr. Trivedi was the Co-Founder of iGATE and Mastech. Mr. Trivedi served as Co-Chairman and President of iGATE from October 1996 until April 2008, when he resigned as President, but remained a director of iGATE and Co-Chairman of the iGATE Board until July 2015. Mr. Trivedi also served as the Chairman of the Board of iGATE Global Solutions Limited, a subsidiary of iGATE, and held this position from July 2000 until July 2015. From 1988 through September 1996, Mr. Trivedi served as President of iGATE and held other offices, including Secretary and Treasurer. From 1976 to 1988, he held various marketing and management positions with Unisys Corporation. Mr. Trivedi holds a Master’s degree in Business Administration from Ohio University and a Master’s degree in Physics from Delhi University. Mr. Trivedi also serves as the Managing Partner of SWAT Capital Administrator LLC and as the principal executive officer of the Trivedi Family Office. Mr. Trivedi’s history and experience with the Company since its inception led to the Board’s conclusion that he should serve as a Director of the Company.
Nirav Patel, age 52, has served as our President and Chief Executive Officer and a Director since January 2025. Prior to joining the Company, from July 2020 to December 2024, Mr. Patel was President, Chief Executive Officer and a member of the Board of Bristlecone, a large pure-play supply chain service provider. Prior to joining Bristlecone, Mr. Patel spent more than 19 years working for Cognizant, an IT services and consulting company. From October 2016 to July 2019, Mr. Patel served as the Senior Vice President and Global Head of Communications, Media and Technology, and from May 2013 to October 2016 as the Senior Vice President and Head of Global Markets of Media and Entertainment, of Cognizant businesses. Mr. Patel is part of the CNBC CEO Council and Forbes Technology Council. He holds a computer science degree from Madras University and is an HBS Advanced Management alumnus. Mr. Patel’s service as the President and Chief Executive Officer of the Company and his experience as a senior executive for other IT companies led to the Board’s conclusion that he should also serve as a Director of the Company.
VOTES REQUIRED
The Class III Directors will be elected by a plurality of the votes of shares present and entitled to vote. Accordingly, the nominees who receive the largest number of votes actually cast will be elected.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors unanimously recommends that the shareholders vote FOR the nominees named herein.
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PROPOSAL NO. 2
APPROVE AN AMENDMENT TO THE MASTECH DIGITAL, INC. STOCK INCENTIVE PLAN, AS
AMENDED AND RESTATED EFFECTIVE MAY 14, 2024 AND FURTHER AMENDED ON MAY 14, 2025 (AS AMENDED, THE “PLAN”), TO ALLOW FOR THE ISSUANCE OF RESTRICTED STOCK UNITS PURSUANT TO THE PLAN
GENERAL
We are asking our shareholders to approve an amendment to the Mastech Digital, Inc. Stock Incentive Plan, as amended and restated effective May 14, 2024 (the “Plan”), to allow for the issuance of restricted stock units ("RSUs").
No other changes to the Plan are being proposed.
The amendment will not become effective unless and until shareholder approval is obtained. If shareholders do not approve the amendment, the Plan will instead remain in effect in accordance with its pre-existing terms.
The proposed amendment to the Plan is attached hereto as Exhibit A.
BACKGROUND AND PURPOSE OF THE PROPOSAL
The grant of stock-based awards under the Plan has been a key component of the Company’s compensation program since its original adoption in 2008. The Plan provides a means through which the Company and its subsidiaries may attract and retain talented persons as officers, employees, directors and consultants and provides a means whereby those persons, upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business, may acquire a proprietary interest in the Company. The Plan was adopted to serve the following purposes: (i) to advance the interests of the Company by attracting and retaining high-caliber employees and other key individuals, (ii) to align the interests of our shareholders and recipients of awards under the Plan by increasing the proprietary interest of such recipients in the Company’s growth and success, and (iii) to motivate award recipients to act in the long-term best interests of the Company and its shareholders.
We are now requesting that our shareholders vote in favor of approving an amendment to the Plan to allow for the issuance of restricted stock units ("RSUs") of our Common Stock issuable under the Plan, which amendment will allow us to continue providing equity compensation awards to such employees and other key individuals as a competitive compensation practice and to align the interests of our employees and other key individuals with those of our shareholders.
Approval to Allow for the Issuance of Restricted Share Units
As discussed above, equity compensation is a key component of our executive compensation program and is the mechanism pursuant to which we provide long-term incentives to our employees. We believe that equity incentives are critical to attracting and retaining the most talented employees and to providing appropriate performance incentives.
The Plan currently does not authorize the issuance of restricted stock units ("RSUs").
Attracting and retaining key talent is essential to the Company's growth and success. Based on market practice, top talent expects a total compensation package that includes equity compensation awards. In addition to option grants, the Company will use RSUs to incentivize employees to meet the performance goals of the Company and to act in the long-term best interests of the Company. Approval of the amendment would allow the Company to grant RSUs under the Plan.
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SUMMARY OF THE PLAN
The following summary provides a general description of the material features of the Plan and is qualified in its entirety by reference to the full text of the Plan, attached as Exhibit B, and the proposed amendment to the Plan, attached as Exhibit A.
General. As noted above, the Plan, originally effective as of October 1, 2008, was amended and restated effective as of May 14, 2024 and further amended on May 14, 2025, and was adopted to serve the following purposes: (i) to advance the interests of the Company by attracting and retaining high caliber employees and other key individuals; (ii) to align the interests of the Company’s shareholders and recipients of awards under the Plan by increasing the proprietary interest of such recipients in the Company’s growth and success; and (iii) to motivate award recipients to act in the long-term best interests of the Company and its shareholders.
Administration. The Plan is generally administered by our Compensation Committee; provided, that the Plan authorizes the full Board or a subcommittee of our Board to function as the plan administrator, and permits the Compensation Committee to delegate to Co-Chairmen of the Company or to the Chief Executive Officer the plan administrator’s duties and authority under the Plan with respect to granting awards to individuals who are not subject to Section 16 of the Securities Exchange Act of 1934, as amended, and who are not expected to be “covered employees” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). As discussed under “Compensation Committee”, our Compensation Committee members meet the requirements of being “non-employee directors” within the meaning of Rule 16b-3(a)(3). The administrator of the Plan is referred to herein as the “plan administrator”.
The plan administrator is authorized to determine the individuals who will receive awards (the “participants”), the types of awards to be granted, the number of shares to be subject to each award, the price of the awards granted, the terms and conditions of such awards, including any performance criteria, any payment terms, payment method and the expiration date applicable to each award. The plan administrator is also authorized to establish, adopt or revise rules relating to the administration of the Plan.
Authorized Shares. Currently, 6,200,000 shares of the Company’s Common Stock may be subject to awards under the Plan. The shares of the Company’s Common Stock as reserved are subject to adjustment in the event of a stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off or other similar event. If any award granted under the Plan expires or otherwise terminates for any reason without having been exercised or settled in full, or if shares subject to forfeiture are forfeited, any such shares reacquired or subject to a terminated award will again become available for issuance under the Plan.
Eligibility. All employees and directors, officers and consultants who perform services for the Company or a subsidiary of the Company (as defined in the Plan) will be eligible to receive awards. The plan administrator has the discretion to select participants and determine the form, amount and timing of each award to such persons, the exercise price or base price associated with the award, the time and conditions of exercise or settlement of the award and all other terms and conditions of an award.
Forms of Awards. If this amendment is approved, awards under the Plan may include one or more of the following types: (i) stock options (both nonqualified and incentive stock options); (ii) stock appreciation rights (“SARs”); (iii) restricted stock awards; (iv) stock awards; (v) performance share awards; and (vi) restricted stock units ("RSUs").
Stock options are rights to purchase a specified number of shares of the Company’s Common Stock at a price fixed by the plan administrator as of the date of grant. The exercise price of each option may not be less than the fair market value of a share of Common Stock on the date of grant. Options expire no later than ten years after the date of grant. However, any incentive stock option may only be granted to an employee of the Company or a subsidiary (as defined in Section 424 of the Code), and if granted to a person who at the time of grant owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company (“10% Shareholder”), must have an exercise price equal to at least 110% of the fair market value of a share of Common Stock on the date of grant and expire no later than five years after the date of grant. All options will become exercisable at such time and in such installments as the plan administrator determines. Payment of the option price (sometimes called the exercise price or strike price) must be made in full at the time of exercise in such form as the plan administrator permits. Payment methods include cash, the exchange of shares already owned, broker-cashless exercise, withholding of shares otherwise deliverable, or a combination of the preceding alternatives. The plan administrator may also authorize “stock retention” options, which provide upon the exercise of an option previously granted, using previously owned shares, for the automatic issuance of a new option under this Plan with an exercise price equal to the fair market value on the date of grant, for up to the number of shares equal to the previously-owned shares delivered in payment of the exercise price of the prior option.
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A SAR entitles the holder to receive, upon exercise, an amount equal to the positive difference between the fair market value of one share of Common Stock of the Company on the date the SAR is exercised and the exercise price, multiplied by the number of shares of Common Stock with respect to which the SAR is exercised. The plan administrator has the discretion to determine whether the amount to be paid upon exercise of a SAR may be paid in cash, Common Stock (including restricted stock) or a combination of cash and Common Stock.
Restricted stock awards provide for a specified number of shares of Common Stock subject to a restriction against transfer during a period of time or until other conditions or performance measures are satisfied, as established by the plan administrator. Unless otherwise set forth in the agreement relating to a restricted stock award, the holder of an unvested restricted stock award does not have any of the rights of a shareholder, including voting rights and the right to receive dividends.
Stock awards are shares of the Company’s Common Stock which are vested at the time of grant and are not subject to a restriction period or performance measures.
Performance share awards are awards entitling the recipient to acquire shares of our Common Stock upon the attainment of specified performance measures during a performance period set by the plan administrator. Performance measures that may be used include one or more of the following, and may be expressed in either, or a combination of, relative or absolute values:
Such criteria and objectives may relate to results obtained by the individual, the Company, a subsidiary, or an affiliate, or any branch, department, business unit or division thereof, or may relate to results obtained relative to a specific industry or a specific index, peer group of companies, prior performance periods or other measure selected or defined by the plan administrator at the time of grant. The plan administrator may also choose other performance objectives as performance criteria at the time of grant, even if such performance share award would not qualify under Section 162(m) of the Code.
Restricted stock units provide for a promise to deliver a specified number of shares of Common Stock subject to a restriction against transfer during a period of time or until other conditions or performance measures are satisfied, as established by the plan
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administrator. Unless otherwise set forth in the agreement relating to a restricted stock unit, the holder of an unvested restricted stock unit does not have any of the rights of a shareholder, including voting rights and the right to receive dividend.
Termination of Service. The effect of a participant’s termination of service on his or her award depends on the reason for such termination, the provisions of the particular award and, in some cases, the terms of the participant’s employment agreement. Generally, unless otherwise provided, unvested restricted stock awards, unvested performance share awards and unvested restricted stock units will terminate upon termination from employment for any reason. For stock options and SARs, unless otherwise specified in the agreement, termination of employment due to disability or retirement will result in vested options and vested SARs remaining exercisable for a period of one year from the date employment terminates or, if earlier, the date on which the option or SAR expires; termination of employment (unless due to disability, retirement or for cause) will result in the option or SAR remaining exercisable, to the extent vested on the date employment terminates, for a period of three months thereafter or, if earlier, the date on which the option or SAR expires; termination of employment for cause or commencement of services as an officer, director or consultant of a competing business will result in the immediate termination of the option or SAR. Cessation of service will generally result in options and SARs remaining exercisable for three months, unless cessation was due to disability, in which event the exercise period will generally be extended to one year following termination (provided, that removal for cause or commencement of services as an officer, director or consultant of a competing business will result in the immediate termination of the option or SAR).
Maximum Award. Stock options with regard to no more than 625,000 shares of Common Stock of the Company (as adjusted for stock splits) and stock appreciation rights with regard to no more than 625,000 shares of Common Stock of the Company (as adjusted for stock splits) may be granted in any calendar year period. In any one calendar year during any performance period, the maximum amount which may be earned by any one participant under performance share awards shall be limited to 625,000 shares of Common Stock of the Company (as adjusted for stock splits).
Change in Control. Unless otherwise provided in an award agreement or employment agreement, upon a change in control, each outstanding award under the Plan shall (i) be assumed by the acquiring company; or (ii) accelerate and become exercisable or be released from all restrictions, as applicable, immediately prior to the change in control. The Board may determine, in its discretion, that outstanding awards will be surrendered for payment in cash or stock. The performance period with regard to any performance share awards will be deemed to end on the day prior to the effective date of the change of control.
Adjustments upon Certain Events. In the event of a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction resulting in an increase or decrease in the outstanding shares of our Common Stock, or exchange of our Common Stock for a different number or kind of shares or other securities of the Company, or the distribution of additional shares or new or different securities or other non-cash assets, the plan administrator will make an appropriate or proportionate adjustment in (i) the number of stock options, stock appreciation rights and performance share awards that can be granted to any one individual participant, (ii) the number and kind of shares or other securities subject to any outstanding awards, (iii) the price for each share subject to outstanding stock options or stock appreciation rights or other purchase rights under the Plan, without changing the aggregate purchase price, and (iv) the number of shares which may be issued under the Plan but are not then subject to awards. If the outstanding shares of Company Common Stock will be changed in value by reason of a spin-off, split-off or split-up, or dividend in partial liquidation, dividend in property other than cash, or extraordinary distribution to shareholders, then (i) the plan administrator will make any adjustment to any outstanding stock option, SAR, restricted stock performance share or other stock award which it determines is equitably required to prevent dilution or enlargement of the rights of participants, and (ii) unless otherwise determined by the plan administrator in its discretion, any stock, securities, cash or other property distributed with respect to any shares of restricted stock held in escrow or for which such shares of restricted stock will be exchanged shall also be held by the Company in escrow and subject to the same restrictions as apply to the restricted stock. No adjustment or substitution will require the Company to issue or sell a fractional share of stock, and total adjustments or substitutions will be limited accordingly.
Awards not Transferable. Generally, awards under the Plan may not be sold, pledged, assigned, transferred or otherwise encumbered or disposed of other than by will or by laws of descent and distribution or, subject to the consent of the plan administrator, pursuant to a domestic relations order. After the death of the participant, the award may be transferred to the Company upon such terms and conditions, if any, as the plan administrator and the personal representative or other person entitled to exercise the award may agree, within the remaining exercise period. Options and SARs are exercisable during the lifetime of the participant only by the participant.
Tax Withholding. As a condition to the issuance or delivery of shares of our Common Stock or payment of other compensation pursuant to the exercise or lapse of restrictions on any award, the Company has the authority to require participants to discharge all applicable withholding tax obligations. Shares held by or to be issued to a participant may also be used to discharge tax withholding obligations, subject to the discretion of the plan administrator to disapprove of such use.
8
Summary of United States Federal Income Tax Consequences
The following summary is intended only as a general guide to the United States federal income tax consequences of participation in the Plan and does not attempt to describe all possible federal or other tax consequences of such participation or tax consequences based on particular circumstances.
Incentive Stock Options. A participant recognizes no taxable income for regular income tax purposes as a result of the grant or exercise of an incentive stock option qualifying under section 422 of the Code. Participants who neither dispose of their shares within two years following the date the option was granted nor within one year following the exercise of the option will normally recognize a capital gain or loss upon the sale of the shares equal to the difference, if any, between the sale price and the purchase price of the shares. If a participant satisfies such holding periods upon a sale of the shares, we will not be entitled to any deduction for federal income tax purposes. If a participant disposes of shares within two years after the date of grant or within one year after the date of exercise (a “disqualifying disposition”), the difference between the fair market value of the shares on the option exercise date and the exercise price (not to exceed the gain realized on the sale if the disposition is a transaction with respect to which a loss, if sustained, would be recognized) will be taxed as ordinary income at the time of disposition. Any gain in excess of that amount will be a capital gain. If a loss is recognized, there will be no ordinary income, and such loss will be a capital loss. Any ordinary income recognized by the participant upon the disqualifying disposition of the shares generally should be deductible by us for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code.
In general, the difference between the option exercise price and the fair market value of the shares on the date of exercise of an incentive stock option is treated as an adjustment in computing the participant’s alternative minimum taxable income and may be subject to an alternative minimum tax which is paid if such tax exceeds the regular tax for the year. Special rules may apply with respect to certain subsequent sales of the shares in a disqualifying disposition, certain basis adjustments for purposes of computing the alternative minimum taxable income on a subsequent sale of the shares and certain tax credits which may arise with respect to participants subject to the alternative minimum tax.
Nonqualified Stock Options. Options not designated or qualifying as incentive stock options are nonqualified stock options having no special tax status. A participant generally recognizes no taxable income upon receipt of such an option. Upon exercising a nonqualified stock option, the participant normally recognizes ordinary income equal to the difference between the exercise price paid and the fair market value of the shares on the date when the option is exercised. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of stock acquired by the exercise of a nonqualified stock option, any gain or loss, based on the difference between the sale price and the fair market value of the shares on the exercise date, will be taxed as capital gain or loss. The Company generally should be entitled to a tax deduction equal to the amount of ordinary income recognized by the participant as a result of the exercise of a nonqualified stock option, except to the extent such deduction is limited by applicable provisions of the Code.
Stock Appreciation Rights. A participant recognizes no taxable income upon the receipt of a stock appreciation right. Upon the exercise of a stock appreciation right, the participant generally will recognize ordinary income in an amount equal to the excess of the fair market value of the underlying shares of Common Stock on the exercise date over the exercise price. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. The Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant in connection with the exercise of the stock appreciation right, except to the extent such deduction is limited by applicable provisions of the Code.
Restricted Stock. A participant acquiring restricted stock generally will recognize ordinary income equal to the excess of the fair market value of the shares on the “determination date” over the price paid, if any, for such shares. The “determination date” is the date on which the participant acquires the shares unless the shares are subject to a substantial risk of forfeiture and are not transferable, in which case the determination date is the earlier of (i) the date on which the shares become transferable; or (ii) the date on which the shares are no longer subject to a substantial risk of forfeiture (e.g., when they become vested). If the determination date follows the date on which the participant acquires the shares, the participant may elect, pursuant to section 83(b) of the Code, to designate the date of acquisition as the determination date by filing an election with the Internal Revenue Service (the “IRS”) no later than 30 days after the date on which the shares are acquired. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of shares acquired pursuant to a restricted stock award, any gain or loss, based on the difference between the sale price and the fair market value of the shares on the determination date, will be taxed as capital gain or loss. The Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.
Performance Share Awards. A participant generally will recognize no income upon the receipt of a performance share. Upon the settlement of such awards, participants normally will recognize ordinary income in the year of settlement in an amount equal to the cash received and the fair market value of any substantially vested shares of stock received. If the participant is an employee, such
9
ordinary income generally is subject to withholding of income and employment taxes. If the participant receives shares of restricted stock, the participant generally will be taxed in the same manner as described above under “Restricted Stock.” Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value of the shares on the determination date (as defined above under “Restricted Stock”), will be taxed as capital gain or loss. The Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.
Restricted Stock Units. The grant of restricted stock units will create no tax consequences for the participant. Upon the settlement of the RSUs, the participant will recognize ordinary income equal to the fair market value of Common Stock received and the Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant, except to the extent such deduction is limited by applicable provisions of the Code
Section 162(m) Limitation. In general, Section 162(m) of the Code imposes a limit on corporate tax deductions for compensation in excess of $1 million per year paid by a public company to its Chief Executive Officer, the Chief Financial Officer or any of the next three most highest paid executive officers as listed in the proxy statement (each a “covered executive”) or, beginning in 2018, to any person who was a covered executive in 2017 or later. Prior to the enactment of the Tax Cuts and Jobs Act on December 22, 2017, an exception to this limitation was provided for “performance-based compensation” that satisfies certain conditions. In particular, the compensation must be paid solely on account of the attainment of one or more objective, pre-established performance goals, and three other requirements must be met:
Following the enactment of the Tax Cuts and Jobs Act on December 22, 2017, the forgoing exemption for “performance-based compensation” under Section 162(m) was eliminated effective as of the beginning of our 2018 fiscal year (unless the compensation is provided pursuant to a written binding contract which was in effect on November 2, 2017, and which was not modified in any material respect on or after November 2, 2017). For further discussion regarding Section 162(m) of the Code, see “Tax Deductibility of Compensation” in the Compensation Discussion and Analysis section on page 28 of this Proxy.
Claw backs
Notwithstanding any other provisions in the Plan, the Company may cancel any award, require reimbursement of any award by a participant, and effect any other right of recoupment of equity or other compensation provided under the Plan in accordance with the Company’s Claw back Policy adopted by the Board effective as of December 1, 2023, and any other similar Company policies that may be adopted and/or modified from time to time (“Claw back Policy”). In addition, a participant may be required to repay to the Company previously paid compensation, whether provided pursuant to the Plan or an award agreement, in accordance with the Claw back Policy.
Section 409A
Plan awards and the agreements evidencing the awards are intended to be structured in a manner to avoid the imposition of any penalty taxes under Section 409A of the Code, and the Plan and the award agreements shall be interpreted and construed in a manner that establishes an exemption from (or compliance with) the requirements of Section 409A of the Code. Any terms or provisions of the Plan or any award agreement that are undefined or ambiguous shall be interpreted in a manner that makes award in question exempt from, or compliant with, Section 409A of the Code. Notwithstanding the foregoing, in no event shall the Company or any subsidiary or other affiliate of the Company, or any member of the Board or any person acting on behalf of the Company or any subsidiary or other affiliate of the Company or on behalf of the Board, have any liability to any participant or any other individual or entity for any failure to comply with Section 409A of the Code.
Notwithstanding any provisions of the Plan or any applicable award agreement to the contrary, no payment shall be made with respect to any award, or portion of any award, that is subject to Section 409A of the Code to a “specified employee” (as such term is defined for purposes of Section 409A of the Code) prior to the first date that is at least six (6) months after the employee’s separation of service to the extent such six-month delay in payment is required to comply with Section 409A of the Code. To the extent required
10
to comply with Section 409A of the Code, a termination of employment shall not be deemed to have occurred for purposes of any payment or distribution upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A of the Code and accordingly, a reference to termination of employment, termination of service or like terms shall mean a “separation from service” as the context may require.
Amendment, Suspension or Termination
The Plan will continue in effect until its termination by the Board of Directors, provided, that no awards may be granted under the Plan following the tenth anniversary of the Plan’s effective date, May 14, 2034. The Board of Directors may amend, suspend or terminate the Plan at any time, provided that no amendment may be made without shareholder approval if either (i) the amendment would increase the number of shares issuable as incentive stock options, or change the class of persons eligible to receive incentive stock options under the Plan, or (ii) shareholder approval at the time of the amendment is required, either by the rules of any stock exchange on which our Common Stock is at the time listed. No amendment, suspension or termination of the Plan may deprive any person of any rights previously granted under the Plan, without that person’s consent.
New Plan Benefits
It is within the discretion of the plan administrator to determine the recipients of awards, and as of the date of this Proxy Statement, the plan administrator has not determined future awards or who may receive them. Therefore, it is not possible at present to determine the amount or form of any award that will be available for future grant to any individual according to the Plan. For illustrative purposes, please refer to the “Grants of Plan-Based Awards Table” in this Proxy Statement to review equity awards made to our named executive officers in 2025.
Securities Authorized for Issuance under Equity Compensation Plans
The following table provides information as of December 31, 2025, with respect to shares of our Common Stock that may be issued under the Mastech Digital, Inc. Restated Stock Incentive Plan, as amended (the “Plan”), and the Company’s 2019 Employee Stock Purchase Plan (the “Stock Purchase Plan”), which are the Company’s only equity compensation plans under which grants may currently be made. At the Company’s 2025 Annual Meeting of Shareholders, shareholders approved an amendment to the Plan increasing the number of shares of Common Stock authorized for issuance thereunder to 6,200,000 shares. Effective May 14, 2025, the Company’s 2024 Inducement Stock Incentive Plan was terminated. No further grants may be made under the 2024 Inducement Stock Incentive Plan; however, outstanding awards previously granted under that plan remain subject to its terms. The Mastech Digital, Inc. Stock Incentive Plan was originally effective as of October 1, 2008, was amended and restated effective as of May 14, 2024, and further amended on May 14, 2025.
Equity Compensation Plan Information
Plan Category |
|
Number of |
|
Weighted Average |
|
|
Number of securities |
|||||||
Equity compensation plans approved by shareholders |
|
|
2,991,000 |
|
|
|
$ |
11.07 |
|
|
|
1,362,000 |
|
(2) |
Equity compensation plans not approved by security holders |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
Total (1) |
|
|
2,991,000 |
|
(3) |
|
$ |
11.07 |
|
|
|
1,362,000 |
|
(2) |
11
The following table lists each named executive officer, all current executive officers as a group (as determined under applicable SEC rules), all current directors (other than executive officers) as a group, each associate of the foregoing persons, each other person who received at least five percent of the options under the Plan, and all current employees of the Company (other than executive officers) as a group, indicating, as of December 31, 2025, the aggregate number of options, restricted shares and performance shares granted under the Plan to each of the foregoing since the inception of the Plan in 2008.
Name and Principal Position |
|
Options granted |
|
|
Restricted |
|
||
Vivek Gupta, Former President and Chief Executive Officer (1) |
|
|
978,000 |
|
|
|
— |
|
John J. Cronin, Jr., Former Chief Financial Officer and Corporate Secretary (2) |
|
|
555,000 |
|
|
|
185,438 |
|
Nirav Patel, President and Chief Executive Officer (3) |
|
|
351,179 |
|
|
|
351,179 |
|
Kannan Sugantharaman, Chief Financial Officer (4) |
|
|
75,000 |
|
|
|
75,000 |
|
All Current Executive Officers as a Group (2 persons) |
|
|
426,179 |
|
|
|
426,179 |
|
All Current Directors (other than Executive Officers) as a Group (5 persons) |
|
|
— |
|
|
|
38,676 |
|
Associates of Named Executive Officers, Directors and Director Nominees |
|
|
385,000 |
|
|
|
— |
|
All Current Employees (other than Executive Officers) as a Group (16 persons) |
|
|
746,500 |
|
|
|
37,500 |
|
Votes Required
Approval of this proposal requires the affirmative vote of a majority of the votes cast by all shareholders entitled to vote on this proposal. If you hold your shares in your own name and abstain from voting on this matter, your abstention will have no effect. If you hold your shares through a broker and you do not instruct the broker on how to vote on this proposal, your broker will not have authority to vote your shares. Broker non-votes will have no effect on the outcome of this vote. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum.
Recommendation of the Board of Directors
The Board of Directors unanimously recommends that the shareholders vote FOR approving the amendment to the Plan to allow for the issuance of restricted stock units ("RSUs").
12
PROPOSAL NO. 3
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
GENERAL
Following the 2019 Annual Meeting of Shareholders, our Board of Directors determined that an advisory vote on named executive officer compensation (commonly referred to as “say-on-pay”) will be held every year until the next time shareholders are required to cast an advisory vote on the frequency of the say-on-pay vote. Accordingly, we are asking our shareholders to cast an advisory vote on named executive officer compensation at the Annual Meeting, as presented in the Compensation Discussion and Analysis section beginning on page 20 and the compensation tables and associated narrative disclosures beginning on page 29.
Our named executive officer compensation program is designed to attract, motivate and retain our named executive officers, who are critical to our success. The Compensation Committee believes an effective compensation program is one that is designed to recruit and retain executive leadership focused on attaining long-term corporate goals and increasing shareholder value. The Compensation Committee believes that it has taken a responsible approach to compensating our named executive officers.
Please read the Compensation Discussion and Analysis section of this proxy statement as well as the compensation tables and narratives for a more detailed discussion of our executive compensation programs, including information about the fiscal year 2026 compensation of our named executive officers.
We are asking our shareholders to indicate their support for our named executive officer compensation as described in this proxy statement. This proposal gives our shareholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we will ask our shareholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s proxy statement for the 2026 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission.”
The say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or our Board. Our Board and our Compensation Committee value the opinions of our shareholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, we will consider our shareholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
Votes Required
Approval of this proposal requires the affirmative vote of a majority of the votes cast by all shareholders entitled to vote on this proposal.
Recommendation of the Board of Directors
The Board of Directors recommends a vote “FOR” the approval of the compensation of our named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission.
13
BOARD COMMITTEES AND MEETINGS
During 2025, the Board of Directors met four (4) times. Each of our directors attended all meetings held by the Board during such director’s term of service in 2025, with the exception of Mr. Nayar who attended three (3) meetings. The Board of Directors has adopted a policy under which each director is encouraged, but not required, to attend each Annual Meeting of Shareholders. In 2025, all of our directors serving on the Board of Directors at the time of our Annual Meeting of Shareholders, excluding Mr. Nayar, attended such meeting by telephone.
Effective January 6, 2025, Mr. Gupta resigned as a member of the Board of Directors and the Board of Directors appointed Mr. Nirav Patel as a member of the Board of Directors. The Board of Directors has determined that all current directors, other than Messrs. Wadhwani, Trivedi and Patel, are independent under both the independence criteria for directors established by NYSE American and the independence criteria adopted by the Board of Directors. The independence criteria adopted by the Board of Directors are set forth in the Company’s Corporate Governance Guidelines, which are available on the Company’s website at http://www.mastechdigital.com/corporate-governance under Investors.
The Company has three standing Committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each of these Committees has a written charter approved by the Board of Directors. A copy of each charter can be found on the Company’s website at http://www.mastechdigital.com/corporate-governance under Investors.
Audit Committee
The Board has an Audit Committee currently consisting of Dr. Kandula, Mr. Rak and Mr. Nayar, who is the chair of the Committee. All members of this Committee are “independent directors” under the criteria adopted by the Board of Directors and under applicable NYSE American listing standards. The Board of Directors has determined that Mr. Nayar is an “audit committee financial expert” as defined in the applicable rules of the Securities and Exchange Commission (“SEC”). The Audit Committee’s duties include reviewing the Company’s financial statements as well as earnings press releases and related information, prior to filing or release, selecting the firm of independent accountants to audit the Company’s financial statements, reviewing the scope and results of the independent auditors’ activities and the fees proposed and charged for such activities, reviewing the adequacy of internal controls, reviewing the scope and results of internal audit activities, and reporting the results of the Committee’s activities to the full Board. The Audit Committee met five (5) times during 2025. Dr. Kandula and Mr. Rak each attended all meetings held by the Audit Committee during such Audit Committee member’s term of service in 2025. Mr. Nayar attended four (4) of meetings held by the Audit Committee during his term of service in 2025
Compensation Committee
The Board has a Compensation Committee, currently consisting of Mr. Nayar, Mr. Rak and Dr. Kandula, who is the chair of the Committee. Each member of this Committee is an “independent director” under applicable NYSE American listing standards and a “non-employee director” as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Compensation Committee is responsible for reviewing and approving matters involving the compensation of non-employee directors and executive officers of the Company, periodically reviewing management development plans, administering the incentive compensation plans, approving public disclosure on compensation matters, and making recommendations to the full Board on these and other compensation matters. The Compensation Committee met five (5) times in 2025. Dr. Kandula and Mr. Rak each attended all meetings held by the Compensation Committee during such Compensation Committee member’s term of service in 2025. Mr. Nayar attended four (4) of meetings held by the Compensation Committee during his term of service in 2025.
Nominating and Corporate Governance Committee
The Board has a Nominating and Corporate Governance Committee currently consisting of Mr. Nayar, Dr. Kandula and Mr. Rak, who is the chair of the Committee. Each member of this Committee is an “independent director” under the criteria adopted by the Board of Directors and under the applicable NYSE American listing standards. The Nominating and Corporate Governance Committee is responsible for recommending to the full Board candidates for election to the Board of Directors and for overseeing and making recommendations to the Board on all corporate governance matters.
The Nominating and Corporate Governance Committee will consider director candidates proposed by shareholders. To recommend a prospective nominee for the Nominating and Corporate Governance Committee’s consideration, shareholders should submit the candidate’s name and qualifications in writing to Jenna Ford Lacey, Corporate Secretary, Mastech Digital, Inc., 1305 Cherrington Parkway, Building 210, Suite 400, Moon Township, PA 15108. The Company’s Articles address the proper submission
14
of a person to be nominated and set forth the proper form for a notice of nomination. Please refer to the “2026 SHAREHOLDER PROPOSALS OR NOMINATIONS” section in this Proxy Statement for a summary of the procedures to request a person(s) to be nominated for election as a director of the Company.
The Nominating and Corporate Governance Committee will consider and evaluate candidates submitted by shareholders in accordance with the procedures set forth in the Company’s Nominating and Corporate Governance Committee Charter and Corporate Governance Guidelines in the same manner as if such candidates were submitted by the Board of Directors. The Committee screens all potential candidates in the same manner regardless of the source of the recommendation. This assessment will include consideration of background, skills, needs, diversity, personal characteristics and business experience, as set forth in the Nominating and Corporate Governance Charter. The Board and the Nominating and Corporate Governance Committee believe it is essential that Board members represent diverse backgrounds. The Nominating and Corporate Governance Committee met one (1) times in 2025.
Each Nominating and Corporate Governance Committee member attended all meetings held by the Nominating and Corporate Governance Committee during such Nominating and Corporate Governance Committee member’s term of service in 2025.
Corporate Governance Guidelines
The Board of Directors has adopted a set of Corporate Governance Guidelines, and the Nominating and Corporate Governance Committee is responsible for overseeing the Guidelines and reporting and making recommendations to the Board concerning corporate governance matters. The Corporate Governance Guidelines are posted on the Company’s web site at http://www.mastechdigital.com/corporate-governance under Investors. This website also includes the Company’s Code of Business Conduct & Ethics and Finance Code of Professional Conduct, which were adopted by the Board of Directors. The Code of Business Conduct and Ethics is the Company’s code-of-ethics document for all employees and also applies to all directors with regard to their Company-related activities. The Finance Code of Professional Conduct is intended to be the Company’s written code-of-ethics under Section 406 of the Sarbanes-Oxley Act of 2002 complying with the standards set forth under Item 406 of Regulation S-K of the Exchange Act.
Anti-Hedging and Insider Trading Policy
Our directors, officers and employees are required to
Board Leadership Structure
The Company’s policy as to whether the same person should serve as both the Chief Executive Officer and Chairman is based on the practice which best serves the Company’s needs at any particular time. The Board believes that its current leadership structure, with Messrs. Wadhwani and Trivedi serving as Co-Chairmen and Mr. Patel serving as the President and Chief Executive Officer, is appropriate given each of their respective past business experience.
The Role of the Board in Risk Oversight
In its oversight role, the Board annually reviews the Company’s strategic plan, which addresses, among other things, the risks and opportunities facing the Company. The Board also has overall responsibility for executive officer succession planning and reviews succession plans each year. The Board has delegated certain risk management responsibilities to the Board committees. As part of the responsibilities set forth in its charter, the Audit Committee is responsible for discussing with management the Company’s major financial risk exposures and the steps management has taken to monitor and control those exposures, including the Company’s risk assessment and risk management policies. The Company’s management regularly evaluates these controls, and the Chief Financial Officer periodically reports to the Audit Committee regarding their design and effectiveness. The Compensation Committee is responsible for matters involving the compensation of non-employee directors and executive officers of the Company and the Nominating and Corporate Governance Committee annually reviews the Company’s corporate governance guidelines. Each of these committees regularly report to the full Board.
15
Communications from Shareholders to the Board of Directors
The Board of Directors recommends that shareholders initiate any communications with the Board of Directors by e-mail or in writing and send them in care of the Corporate Secretary. Shareholders can send communications directly to the Board of Directors by e-mail to mhhsecretary@mastechdigital.com, or by fax to 412-291-3350, or by mail to Ms. Jenna Ford Lacey, Corporate Secretary, Mastech Digital, Inc., 1305 Cherrington Parkway, Building 210, Suite 400, Moon Township, PA 15108. This centralized process will assist the Board of Directors in reviewing and responding to shareholder communications in an appropriate manner. The name of any specific intended Board of Directors recipient should be noted in the communication. The Board of Directors has instructed the Corporate Secretary to forward such correspondence only to the intended recipients; however, the Board of Directors has also instructed the Corporate Secretary, prior to forwarding any correspondence, to review such correspondence and, in his discretion, not to forward certain items if they are deemed of a commercial or frivolous nature or otherwise inappropriate for the Board of Directors’ consideration. In such cases, some of those correspondence may be forwarded elsewhere in the Company for review and possible response.
16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial ownership of the Company’s Common Stock as of March 31, 2026 for: (i) each person known by the Company to own beneficially more than 5% of the outstanding shares of Common Stock; (ii) each named executive officer listed in the Summary Compensation Table below; (iii) each of our current directors; and (iv) all directors and executive officers of the Company as a group. As of March 31, 2026, there were 11,875,706 shares of Common Stock outstanding. Except as noted, all persons listed below have sole voting and investment power with respect to their shares of stock, subject to community property laws where applicable. Information with respect to beneficial ownership by 5% shareholders has been based on information filed with the SEC pursuant to Section 13(d) or Section 13(g) of the Exchange Act.
|
|
Shares Beneficially Owned |
|
|||||
Name and Address of Beneficial Owner (1) |
|
Number |
|
|
Percent |
|
||
Sunil Wadhwani (2) |
|
|
1,557,312 |
|
|
|
13.1 |
% |
Ashok Trivedi (3) |
|
|
3,288,842 |
|
|
|
27.7 |
% |
Manoj Singh, as the sole member of the Trust Protection Committee of the Sunil |
|
|
1,850,000 |
|
|
|
15.6 |
% |
Steven A. Shaw (5) |
|
|
1,310,100 |
|
|
|
11.0 |
% |
The Capital Management Corporation (6) |
|
|
862,329 |
|
|
|
7.3 |
% |
Arun Nayar |
|
|
9,041 |
|
|
* |
|
|
Srinivas Kandula |
|
|
9,041 |
|
|
* |
|
|
Vladimir Rak |
|
|
20,594 |
|
|
* |
|
|
Nirav Patel (7) (13) |
|
|
188,109 |
|
|
* |
|
|
Kannan Sugantharaman (8) |
|
|
18,750 |
|
|
* |
|
|
Vivek Gupta (9)(10) |
|
|
517,305 |
|
|
|
4.4 |
% |
John J. Cronin, Jr. (11)(12) |
|
|
339,552 |
|
|
|
2.9 |
% |
|
|
|
|
|
|
|
||
All directors and executive officers as a group of 7 persons |
|
|
5,091,689 |
|
|
|
42.9 |
% |
* Less than 1%.
17
18
dELINQUENT SECTION 16(A) REPORTS
Section 16(a) of the Exchange Act requires the Company’s directors and officers, and persons who own more than 10 percent of a registered class of the Company’s equity securities, to file reports of ownership and change in ownership with the SEC and NYSE American. Directors, officers and other 10 percent shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) reports that they file.
Based solely on its review of the copies of such reports and amendments thereto provided to the Company, and written representations and information provided to the Company by the reporting persons, the Company believes that during 2025 all section 16(a) reports were timely filed, with the exception of (i) one Form 4 that was filed late by each Mr. Nayar, Mr. Rak, Ms. Smith and Dr. Kandula in connection with their restricted stock grant dated January 30, 2025; (ii) one Form 3 that was filed late by Mr. Sugantharaman; and (iii) one Form 4 that was filed late by Mr. Sugantharaman in connection with his stock grant dated April 14, 2025.
On September 17, 2020, the Company entered into an amended and restated registration rights agreement (the “A&R Registration Rights Agreement”) with Ashok Trivedi, in his individual capacity and as trustee of the Ashok K. Trivedi Revocable Trust (the “Trivedi Trust”), Sunil Wadhwani, in his individual capacity and as trustee of The Revocable Declaration of Trust of Sunil Wadhwani (together with the Trivedi Trust, the “Founder Trusts”), and certain affiliates (the “Founder Affiliates”) of Messrs. Trivedi and Wadhwani (collectively, the “Holders”). Pursuant to the terms of the A&R Registration Rights Agreement, the Company is required, upon receipt of a written request from a Holder (a “Demand Request”), to use commercially reasonable efforts to prepare and file a registration statement with the Securities and Exchange Commission (the “SEC”) within 45 days of receipt of a Demand Request to register the resale of the registrable securities requested to be registered by the requesting Holders and to use commercially reasonable efforts to have such registration statement declared effective within 90 days after it is filed with the SEC. The A&R Registration Rights Agreement also provides the Holders certain piggy-back registration rights for the registrable securities they hold in the event the Company proposes to file certain registration statements with the SEC. The A&R Registration Rights Agreement further provides that in the event a Holder desires to offer and/or sell registrable securities on a block trade or underwritten basis without substantial marketing efforts prior to pricing (a “Block Trade”), the Company will use its reasonable best efforts to facilitate such Block Trade.
EXECUTIVE OFFICERS
In addition to Mr. Patel, whose positions and background are discussed under “Business Experience of Directors”, the following person is an executive officer of the Company as of the date of this Proxy Statement.
Kannan Sugantharaman., age 47, has served as Chief Financial Officer and Chief Operations Officer of the Company since April 2025. Mr. Sugantharaman previously served as the CFO of Omega Healthcare, where he led global finance, governance, and investor relations, and spearheaded a multi-year business transformation initiative spanning Sales, Delivery, Finance, HR, M&A, and Technology. Earlier, he held senior leadership roles at Cognizant Technology Solutions and Sutherland Global Services, and began his career at KPMG. Mr. Sugantharaman holds a Master of Business Administration from The University of Chicago Booth School of Business, is a qualified chartered accountant from The Institute of Chartered Accountants of India, and holds a Bachelor of Commerce degree from the University of Madras.
There are no family relationships between or among any of the Company’s Directors or executive officers. The Company’s executive officers serve at the discretion of the Board and pursuant to the terms of their respective employment agreements.
19
COMPENSATION DISCUSSION AND ANALYSIS
The following compensation discussion and analysis summarizes the Company’s philosophy and objectives regarding the compensation of its named executive officers, including how the Company determines elements and amounts of executive compensation. The following discussion and analysis should be read in conjunction with the tabular disclosures regarding the compensation of named executive officers for fiscal 2025 and the report of the Compensation Committee of the Board of Directors, which immediately follows below.
Compensation Committee Roles and Responsibilities
The Compensation Committee is responsible for reviewing and approving matters involving the compensation of non-employee directors and executive officers of the Company, as described herein. The Compensation Committee is also responsible for periodically reviewing management development plans, approving public disclosure on compensation matters, making recommendations to the full Board on these and other compensation matters, and administering the Company’s Restated Stock Incentive Plan, as amended (the “Plan”).
It is the responsibility of the Compensation Committee to ensure that the total compensation paid to such officers is fair, reasonable and competitive. The Compensation Committee is composed entirely of independent directors and functions in accordance with the provisions of the Compensation Committee Charter, which is available on the Company’s website at http://www.mastechdigital.com, under Investors.
The Compensation Committee has established a framework and compensation philosophy, pursuant to which decisions are made involving the compensation of all executive officers of the Company. This framework ensures that the total compensation paid to such executive officers is fair, reasonable and competitive in the judgment of the Compensation Committee. The Compensation Committee reviews, establishes, and approves all elements of compensation paid to the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”). The Compensation Committee has delegated authority to the CEO to make determinations of appropriate salary and bonus amounts to other Company executives, provided such amounts conform to the framework established by the Compensation Committee. No other executive officers have a role in making executive officer compensation determinations.
Named Executive Officers
The Company’s named executive officers for the 2025 fiscal year consisted of Mr. Patel, Mr. Sugantharaman, Mr. Gupta and Mr. Cronin. Effective January 6, 2025, Mr. Gupta resigned as the Company’s President and Chief Executive Officer and as a member of the Board of Directors, and Mr. Nirav Patel was appointed the Company’s President and Chief Executive Officer and as a member of the Board of Directors. Effective April 14, 2025, Mr. Cronin resigned as the Company's Chief Financial Officer, and Mr. Sugantharaman was appointed the Company's Chief Financial and Operations Officer.
Compensation Philosophy for Named Executive Officers
The Compensation Committee has adopted a compensation philosophy with respect to the named executive officers that supports the Company’s belief that a strong executive management team, comprised of talented individuals in key positions, is critical to the development and growth of our business and to the creation of shareholder value. Accordingly, our executive officer compensation program is designed to attract, motivate and retain high-quality executives by providing total compensation that is performance-based and competitive with the markets and industries in which we compete for talent. A core objective guiding our executive officer compensation program is to emphasize pay-for-performance by linking compensation levels to shareholder value creation. Thus, we provide incentives to advance the interest of shareholders by targeting key financial and operational objectives for our named executive officers and deliver levels of compensation that are commensurate with the achievement of such performance measurements. Additionally, we provide long-term equity incentive awards to mitigate short-term risk-taking by our executives at the expense of long-term shareholder value. Our goals are:
20
The Compensation Committee has established a compensation structure to achieve these goals through a combination of three key compensation elements:
The Compensation Committee believes that this three-prong approach best serves the interests of our shareholders and safeguards against excessive risk-taking by our executives. This approach enables us to meet the requirements of the competitive environment in which we operate, while ensuring that executives are compensated in a manner that advances both the short and long-term interests of our shareholders. Under this program design, compensation for our executive officers involves a high proportion of pay that is “at risk”, namely the annual performance-based cash bonus and the value of stock options and/or stock awards.
Opportunities for excessive risk-taking by our executive officers, for short-term financial gain, are limited by the nature of our business. The element of compensation most exposed to self-serving actions by our executive officers is the annual performance-based cash bonus. In establishing specific performance criteria for the Company’s executive officers, consideration is given to “trade-off” criteria which would mitigate self-serving actions by any individual executive. Additionally, organizational interaction and formal approval processes make it difficult for self-serving actions to be undertaken by any individual executive. While there is always the opportunity in every organization to manage for the short term, the Compensation Committee believes that the equity-based component of compensation is a strong deterrent of such action. Based on its annual risk-related review, including the above program structure considerations, the combination of long and short-term programs, and possible compensation-based risks and means by which such risks may be mitigated, including through the operation of internal control structure and oversight, the Compensation Committee has determined that the Company’s compensation policies and practices for its employees are not reasonably likely to have a material adverse effect on the Company.
Key Elements of and Factors Affecting Compensation
As discussed above, the three key elements of the named executive officer compensation are: (a) base salary; (b) annual performance-based cash bonus; and (c) equity compensation. While each of these elements is discussed separately below, the Compensation Committee does consider and reviews the full compensation package afforded by the Company to its named executive officers. The Compensation Committee also reviews all executive employment contracts and the annual performance-based goals and objectives of our named executive officers.
Compensation Benchmarking
In the professional services industry, industry peers have operational attributes that are very different from Mastech Digital, which makes it challenging to engage in compensation benchmarking. The Company does look to various third-party reports and projections regarding the staffing industry, such as Staffing Industry Analysts (“SIA”), for general reference in establishing the Company’s annual financial and operational objectives but generally does not use any specific “benchmark” in making compensation decisions.
In 2021, the Compensation Committee engaged Veritas Executive Compensation Consultants, LLC on a limited basis to help with an internal review of executive compensation to ensure that existing total compensation levels, and the delivery of such, were appropriate and competitive in today’s marketplace. The conclusion of this review suggested that executive cash compensation was in the appropriate range of the benchmark averages. With respect to equity compensation, the Compensation Committee is working on an equity structure that strengthens our ability to attract and retain key talent and at the same time aligns compensation over a multi-year period directly tied with the interests of our shareholders, which is the creation of long-term shareholder value. No formal executive compensation benchmarking was done in 2022, 2023, 2024, or 2025. In March, 2026, the Compensation Committee engaged Willis Towers Watson US LLC to conduct an internal review of the Company's executive compensation.
Prior to 2021 and for the years 2022, 2023, 2024 and 2025, the Compensation Committee completed an annual informal analysis on the competitive marketplace with respect to the Company’s CEO and CFO. In addition to evaluating peer group compensation data, the Committee considered the performance of these individuals and their additional levels of responsibility. These informal valuations are approved by the full Board and are factored into the Compensation Committee’s annual compensation changes with respect to our named executive officers.
21
Base Salaries for Named Executive Officers
The Company provides its named executive officers with a base salary to provide them with a minimum guaranteed compensation level for their services. The CEO and CFO’s base salary is determined by the Compensation Committee by evaluating the responsibilities of the position held, the individual’s experience and, to the extent possible, the competitive marketplace for executive talent. The base salary is intended to be competitive with base salaries paid to comparable officers at peer group companies with similar qualifications, experience and responsibilities.
In setting base salaries for the CEO and CFO, the Compensation Committee gives consideration to the following:
The Compensation Committee has delegated authority to the CEO to make determinations on appropriate base salaries for executive officers of the Company other than the CEO, provided the amounts are within the framework and philosophy set forth by the Compensation Committee discussed above.
Annual Bonuses for Named Executive Officers
In addition to a base salary, each named executive officer is eligible for an annual performance-based cash bonus. The Company has chosen to include annual performance-based cash bonuses as a material element in its compensation program. This bonus component is designed to motivate individual and team performance in attaining the current year’s financial plan and business objectives. The Compensation Committee makes final determinations of annual performance-based bonuses for the CEO and CFO.
In 2025, annual performance-based cash bonuses earned by the Company’s named executive officers were as follows: Mr. Patel earned $616,913 or approximately 123% of his “at goal” bonus amount. Mr. Sugantharaman earned $100,000 or approximately 100% of his “at goal” bonus amount. Both Mr. Gupta and Mr. Cronin were paid 2025 bonuses on a prorated basis. The specific performance objectives, achievement of actual results and the corresponding bonus payout applicable to each objective for our named executive officers are listed below:
|
|
“At Goal” |
|
|
Performance |
|
|
Actual |
|
|
Bonus |
|
||||||
Nirav Patel (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consolidated Revenues |
|
$ |
125,000 |
|
|
$ |
194.6 million |
|
|
$ |
|
191.4 |
|
|
$ |
114,750 |
|
|
Consolidated gross profit % |
|
|
125,000 |
|
|
% |
|
27.9 |
|
|
% |
|
27.9 |
|
|
|
166,667 |
|
Consolidated non-GAAP diluted EPS |
|
|
125,000 |
|
|
$ |
|
0.63 |
|
|
$ |
|
0.72 |
|
|
|
198,250 |
|
Discretionary |
|
|
125,000 |
|
|
|
|
|
|
|
|
|
|
|
137,265 |
|
||
|
|
$ |
500,000 |
|
|
|
|
|
|
|
|
|
(7) |
$ |
616,932 |
|
||
Kannan Sugantharaman (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consolidated Revenues |
|
$ |
25,000 |
|
|
$ |
194.6 million |
|
|
$ |
|
191.4 |
|
|
$ |
22,950 |
|
|
Consolidated gross profit % |
|
|
25,000 |
|
|
% |
|
27.9 |
|
|
% |
|
27.9 |
|
|
|
25,000 |
|
Consolidated non-GAAP diluted EPS |
|
|
25,000 |
|
|
$ |
|
0.63 |
|
|
$ |
|
0.72 |
|
|
|
39,650 |
|
Discretionary |
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
12,400 |
|
||
|
|
$ |
100,000 |
|
|
|
|
|
|
|
|
|
|
$ |
100,000 |
|
||
Vivek Gupta (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Discretionary (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
47,000 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
47,000 |
|
|||
John J. Cronin, Jr. (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Discretionary (6) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
77,000 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
77,000 |
|
|||
22
Claw back Policy for Certain Incentive Compensation
The Company has adopted a Claw Back Policy which provides for the recovery of certain incentive compensation paid to our executive officers in the event of an accounting restatement. The Claw back Policy is effective as of December 1, 2023, and applies to any incentive-based compensation paid to our executive officers on or after October 2, 2023, even if this compensation was approved, awarded or granted to the executive officers prior to that date.
For purposes of the Claw back Policy, an accounting restatement is defined as a restatement of the Company’s financial statements due to a material noncompliance with any financial reporting requirement under securities law, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. In the event of an accounting restatement, the claw back amount would be the amount of incentive-based compensation previously received that exceeds the amount of incentive-based compensation that otherwise would have been received had it been determined based on the restated amounts. Incentive-based compensation is defined as any compensation that is granted, earned or vested based wholly or in part upon the attainment of a “Financial Reporting Measure”. Incentive-based compensation is “received” for purposes of the Claw back Policy in the Company’s fiscal period during which the financial reporting measure specified in the incentive-based compensation award is attained, even if the payment or grant occurs after the end of that period.
The claw back period for purposes of our Claw back Policy means the three completed fiscal years immediately preceding that date on which the Company is required to prepare an accounting restatement. In the event of an accounting restatement, the Board will determine the amount of any erroneously awarded compensation for each executive officer in connection with that accounting restatement and the timing and method for promptly recouping that erroneously awarded compensation. Under the Claw back Policy, the Company is not permitted to indemnify any executive officers against the loss of any erroneously awarded compensation, and each executive officer of the Company is required to sign and return to the Company within thirty (30) calendar days following the later of (a) the effective date of the Claw back Policy or (b) the date such individual becomes an executive officer, an acknowledgement form, pursuant to which the executive officer agrees to be bound by, and to comply with, the terms and conditions of the Claw back Policy. The Claw back Policy is administered by the Compensation Committee, as designated by our Board of Directors, and any determinations made by the Compensation Committee are final and binding on all affected individuals.
The Claw back Policy is designed to comply with, and is to be interpreted to be consistent with, Section 10D of the Securities Exchange Act of 1934, as amended, and Section 811 of the NYSE American Company Guide.
Policies and Practices Related to the Grant of Certain Equity Awards
23
2025 Base Salary and Bonus Opportunity Increases for Named Executive Officers:
During 2025, our named executive officers received base salary and/or performance-based bonus opportunities as detailed below:
In determining these compensation adjustments, the Compensation Committee considered its informal analysis on the competitive marketplace as further described under the caption “compensation benchmarking”.
Stock Incentive Plan and Awards to Named Executive Officers
The Company’s long-term incentives are in the form of equity awards, such as stock options, stock appreciation rights, restricted or unrestricted stock awards and restricted stock unit “performance share” award grants, in accordance with the Plan. The objective of this compensation element is to align compensation over a multi-year period directly with the interests of our shareholders, by motivating and rewarding actions that create long-term shareholder value. The Committee believes that this compensation component also provides a strong deterrent from excessive risk-taking to achieve short-term financial rewards.
In determining the size and types of awards to be granted, the Compensation Committee considers an evaluation of competitive factors, including general reference to industry practices, in conjunction with total compensation provided to the named executive officers, the recommendations of the CEO (except with respect to himself), as well as both Company and individual performance levels and the patterns and impact of prior awards.
During 2025, the Company issued the following stock option grants to its named executive officers:
24
2024 Inducement Stock Incentive Plan
On December 10, 2024, our Board of Directors approved and adopted the 2024 Inducement Stock Incentive Plan, and subject to the adjustment provisions of the 2024 Inducement Stock Incentive Plan, reserved 1,500,000 shares of Common Stock for issuance of awards under the 2024 Inducement Stock Incentive Plan. The 2024 Inducement Stock Incentive Plan was approved and adopted without shareholder approval pursuant to NYSE American Company Guide Rule 711. The 2024 Inducement Stock Incentive Plan provides for grants of non-qualified stock options, restricted stock awards, stock awards, performance share awards and other stock-based awards (each, an “Inducement Award”). Each Inducement Award is intended to qualify as an employment inducement award under NYSE American Company Guide Rule 711(a). In accordance with NYSE American Company Guide Rule 711(a), the 2024 Inducement Stock Incentive Plan will be used exclusively for the grant of equity awards to individuals who were not previously employees or directors of the Company, or following a bona fide period of non-employment, as an inducement material to entering into employment with the Company.
Effective May 14, 2025, the 2024 Inducement Stock Incentive Plan was terminated. No further grants may be made under the 2024 Inducement Stock Incentive Plan; however, outstanding awards previously granted under that plan remain subject to its terms.
Further details of the Company’s equity awards are set forth in the table entitled “Grants of Plan-Based Awards”.
Employment Agreements
Detailed below are the terms and conditions of the employment agreements currently in place for our Named Executive Officers and our current President and Chief Executive Officer.
Mr. Patel, Mastech Digital Technologies, Inc. and the Company are parties to an Employment Agreement effective January 6, 2025 (the “Effective Date”), which provides for an annual base salary of $1,000,000 and an annual performance-based cash bonus with an “at goal” target amount of $500,000 for fiscal year 2025. Under this agreement, Mr. Patel also received a cash signing bonus of $2,000,000, less applicable withholdings, within 30 days of the Effective Date. If Mr. Patel voluntarily terminates his employment with the Company without “Good Reason”, or the Company terminates him for “Cause”, in each case on or before the fourth anniversary of the Effective Date, Mr. Patel is required to repay all or a portion of the signing bonus accordance with the terms of the Employment Agreement. On the Effective Date, Mr. Patel received an award of non-qualified stock options to purchase up to 702,358 shares of the Company’s common stock for a per share exercise price equal to the closing price of the Company’s Common Stock on the NYSE MKT on the Effective Date, subject to the terms and conditions set forth in the underlying Stock Option Agreement. Mr. Patel is also eligible to receive additional non-qualified stock options and other awards pursuant to the Company’s Stock Incentive Plan in a manner and amount determined by the Compensation Committee. In the event that Mr. Patel is terminated without “cause” or he resigns for “good reason” (in each case, other than within 12 months after a “change of control” of the Company), Mr. Patel is entitled to a severance equal to 12 months of his then current monthly base salary, as well as continued coverage under the Company’s medical benefit plan, with the Company paying the excess of Mr. Patel’s cost for COBRA coverage over the cost he would have paid for group health plan coverage as an active executive of the Company for the earlier of 18 months or when Mr. Patel becomes eligible for other group health benefits from a subsequent employer.
Mr. Sugantharaman and the Company entered into an Executive Employment Agreement (the “CFO Employment Agreement”) on April 14, 2025 (the “Effective Date”) and Mr. Sugantharaman and Mastech Digital Private Limited, an indirect wholly owned subsidiary of the Company, entered into an Executive Employment Agreement (together with the CFO Employment Agreement, the “Sugantharaman Employment Agreements”) on the Effective Date. The Sugantharaman Employment Agreements provide that Mr. Sugantharaman will receive an aggregate annual base salary of 2.25 Crores Indian Rupees (approximately $263,824 as of April 3, 2025). The Sugantharaman Employment Agreements also provide that Mr. Sugantharaman is eligible to earn an aggregate annual performance-based cash bonus of 1 Crore Indian Rupees (approximately $117,255 as of April 3, 2025) for the achievement of certain financial and operational targets. On the Effective Date and pursuant to the terms of the CFO Employment Agreement, Mr. Sugantharaman received an award of non-qualified stock options to purchase up to 150,000 shares of the Company’s common stock for a per share exercise price equal to the closing price of the Company’s Common Stock on the NYSE MKT on the Effective Date, subject to the terms and conditions set forth in the underlying Stock Option Agreement. Mr. Sugantharaman is also eligible to receive additional non-qualified stock options and other awards pursuant to the Company’s Stock Incentive Plan in a manner and amount determined by the Compensation Committee. In the event that Mr. Sugantharaman is terminated without “cause” or he resigns for “good reason” (in each case, other than within 12 months after a “change of control” of the Company), Mr. Sugantharaman is entitled to a severance equal to 6 months of his then current monthly base salary.
Mr. Gupta, Mastech Digital Technologies, Inc. and the Company are parties to a Fifth Amended and Restated Employment Agreement effective March 8, 2024, which provided for an annual base salary of $585,000 and an annual performance-based cash bonus with an “at goal” target amount of $282,000 for fiscal year 2024. Under this agreement, Mr. Gupta was also eligible to receive
25
non-qualified stock options and other awards pursuant to the Plan in a manner and amount determined by the Compensation Committee. Mr. Gupta’s agreement provided that, in the event that he was terminated without “cause” or he resigned for “good reason” (in each case, other than within 12 months after a “change of control” of the Company), Mr. Gupta was entitled to a severance equal to 24 months of his then current monthly base salary, as well as two times (2X) his annual performance-based cash bonus target for the year in which his termination occurred. This agreement also provided that, in the event of Mr. Gupta’s termination by the Company without “cause” or Mr. Gupta’s termination for “good reason”, in each case within 12 months after a “change of control”, Mr. Gupta was entitled to a lump sum severance payment equal to two times (2X) the sum of (i) his then current annual base salary and (ii) his annual performance-based cash bonus target for the year in which his termination occurs. Mr. Gupta was also entitled to acceleration in full of all outstanding stock options or other equity awards issued pursuant to the Plan.
On December 10, 2024, Mr. Gupta submitted his resignation from his roles as President and Chief Executive Officer of the Company and as a member of the Company’s Board of Directors, each effective as of January 6, 2025. In connection with this resignation, the Company and Mr. Gupta entered into a Confidential Separation Agreement and General Release setting forth the terms of Mr. Gupta’s separation from the Company. The terms of this agreement provide for the Company to pay Mr. Gupta (i) 24 months of his monthly base salary, less appropriate deductions, over a 24-month period following Mr. Gupta’s termination date; and (ii) two times (2X) his annual performance-based cash bonus target for the year 2024, less appropriate deductions, one half of which was paid on April 29, 2025 and the second-half of which is payable within 60 days of the anniversary of Mr. Gupta’s termination date. Additionally, Mr. Gupta is entitled to continued coverage under the Company’s group health plans pursuant to COBRA for 18 months following his termination, at a cost that is equal to the excess of the cost he would have paid for group health coverage as an active Company executive. Mr. Gupta is also entitled (i) for a period of 12 months, to continued vesting of the unvested stock options he held on his termination date; and (ii) for the exercise period of the vested stock options held by Mr. Gupta on his termination date (including those unvested options that are vesting for 12 months following his termination date) to be extended for a period of 18 months after completion of all vesting. Mr. Gupta is also entitled to receive a cash payment equal to two-twelfths of his annual target bonus for the year 2025, less appropriate deductions, on the 60th day following his termination.
Mr. Cronin, Mastech Digital Technologies, Inc. and the Company are parties to a Fourth Amended and Restated Employment Agreement effective March 8, 2024, which provides for an annual base salary of $450,000 and an annual performance-based cash bonus with an “at goal” target amount of $184,000 for fiscal year 2024. Mr. Cronin is also eligible for standard company benefits in the same manner as other Company executives. In the event that Mr. Cronin is terminated without “cause” or he resigns for “good reason” (in each case, other than within 12 months after a “change of control” of the Company), Mr. Cronin is entitled to a severance equal to 24 months of his then current monthly base salary, as well as two times (2X) his annual performance-based cash bonus target for the year in which his termination occurs. In the event of termination by the Company without “cause” or Mr. Cronin’s termination for “good reason”, in each case within 12 months after a “change of control”, Mr. Cronin is entitled to a lump sum severance payment equal to two times (2X) the sum of (i) his then current annual base salary and (ii) his annual performance-based cash bonus target for the year in which his termination occurs. Mr. Cronin is also entitled acceleration in full of all outstanding stock options or other equity awards issued pursuant to the Plan.
On March 31, 2025, Mr. Cronin submitted his resignation from his role as Chief Financial Officer of the Company effective as of April 14, 2025. In connection with this resignation, the Company and Mr. Cronin entered into a Confidential Separation Agreement and General Release setting forth the terms of Mr. Cronin’s separation from the Company. The terms of this agreement provide for the Company to pay Mr. Cronin (i) 24 months of his monthly base salary, less appropriate deductions, over a 24-month period following Mr. Cronin’s termination date; and (ii) two times (2X) his annual performance-based cash bonus target for the year 2024, less appropriate deductions, one half of which was paid on July 30, 2025 and the second-half of which is payable within 60 days of the anniversary of Mr. Cronin’s termination date. Additionally, Mr. Cronin is entitled to continued coverage under the Company’s group health plans pursuant to COBRA for 18 months following his termination, at a cost that is equal to the excess of the cost he would have paid for group health coverage as an active Company executive. Mr. Cronin is also entitled (i) for a period of 12 months, to continued vesting of the unvested stock options he held on his termination date; and (ii) for the exercise period of the vested stock options held by Mr.Cronin on his termination date (including those unvested options that are vesting for 12 months following his termination date) to be extended for a period of 18 months after completion of all vesting. Mr. Cronin is also entitled to receive a cash payment of a prorated portion of his annual target bonus for the year 2025, less appropriate deductions, payable by March 15, 2026.
Change of Control/Severance Benefits
In addition to the Change of Control/Severance benefits discussed in the “Employment Agreements” section above, outstanding stock options or other equity awards issued pursuant to the Plan, held by the named executive officers, may under certain circumstances vest upon a “Change of Control” of the Company.
26
The estimated payments to be made by the Company to the named executive officers in the event of a termination as of December 31, 2025, including the continued vesting of equity grants, post termination, are set forth in the Table entitled “Potential Payments Upon Termination or Change in Control” on page 36 of this Proxy Statement.
Other Considerations
Retirement Benefits
Each of the named executive officers is entitled to participate in the Company’s tax-qualified defined contribution 401(k) plan on the same basis as all other eligible employees. Under the terms of the 401(k) plan, as prescribed by the Code, the 401(k) contribution of any participating employee is limited to a maximum percentage of annual pay or a maximum dollar amount ($23,500 for 2025, subject to a $7,500 increase for participants who are age 50 or older or a super catch-up of $11,250 for participants who are age 60 - 63).
Perquisites
The Company does not have a formal program providing perquisites for its executive officers.
Consideration of Say-On-Pay Advisory Vote
At our 2025 annual meeting of shareholders, approximately 99.91% of our shareholders who voted on the “say-on-pay” advisory proposal approved the compensation we pay to our named executive officers. The Compensation Committee considered the result of this vote in determining the Company’s compensation policies and decisions and believes that the nearly unanimous shareholder vote strongly supports our current compensation philosophy. Therefore, we have not modified our general compensation practices or philosophy in any manner as a result of the 2025 shareholder advisory vote.
Tax Deductibility of Compensation
Prior to the enactment of the Tax Cuts and Jobs Act on December 22, 2017, Section 162(m) of the Code generally provided that the Company could not deduct, for federal income tax purposes, compensation in excess of $1,000,000 for any given year paid to its chief executive officer and the other three most highly compensated named executive officers employed at the end of the year (each a “covered executive”) (other than its chief financial officer) except to the extent such excess constituted performance-based compensation. In the course of structuring its compensation policies, the Compensation Committee considers ways to maintain the tax deductibility of executive officer compensation; however, the Compensation Committee retains the discretion to compensate executives in a manner that it deems best suited to our compensation objectives and philosophy.
In general, the Compensation Committee’s previous standard policy was to structure compensation arrangements in a manner that would avoid the deduction limitations of Section 162(m), except where it determined that exceeding these limitations was in the best interests of the Company and its shareholders. The Plan has been structured with the intention that stock options and, generally, performance-based awards granted under the Plan qualify as “performance-based compensation,” which compensation was, prior to the enactment of the Tax Cuts sand Jobs Act, generally exempt from the limitations on deduction.
The Tax Cuts and Job Act, which was signed into law on December 22, 2017, eliminates the exemption for “performance-based compensation” under Section 162(m) with respect to taxable years beginning after December 31, 2017 and also expands the Section 162(m) limitation to include the Chief Financial Officer and any person who was a covered executive in 2017 or later. By eliminating the “performance-based compensation” exception, effective as of January 1, 2018, we are no longer be able to structure executive compensation paid to certain executive officers in excess of $1,000,000 as “performance-based compensation” under Section 162(m) to preserve the deductibility of that compensation (unless the compensation is provided pursuant to a written binding contract which was in effect on November 2, 2017, and which was not modified in any material respect on or after November 2, 2017). Rather, beginning January 1, 2018, compensation paid to certain executive officers in excess of $1,000,000 is generally not deductible unless such compensation is pursuant to an award established in a binding contract in effect on November 2, 2017 and not materially modified after such date.
The following Compensation Committee Report is not considered proxy solicitation material and is not deemed filed with the SEC. Notwithstanding anything to the contrary set forth in any of our previous filings made under the Securities Act of 1933, as amended, and under the Exchange Act that might incorporate future filings made by the Company under those statutes, the Compensation Committee Report will not be incorporated by reference into any such prior filings or into any future filings made by the Company under those statutes.
27
Compensation Committee Report
The Compensation Committee reviewed this Compensation Discussion and Analysis and discussed its contents with Company management. Based on the review and discussion, the Committee has recommended to the Board that this Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
The Compensation Committee
Srinivas Kandula, Chair
Arun Nayar
Vladimir Rak
28
SUMMARY COMPENSATION TABLE
The following table sets forth certain information with respect to the annual and long-term compensation of the individuals who served as named executive officers of the Company during the three fiscal years ended December 31, 2025 (collectively the “named executive officers”).
Name and Principal Position |
|
Year |
|
Salary |
|
|
Option |
|
|
Non-Equity |
|
|
All Other |
|
|
|
Total |
|
|||||
Nirav Patel (2) (11) |
|
2025 |
|
$ |
1,000,000 |
|
|
$ |
5,197,450 |
|
|
$ |
616,932 |
|
|
$ |
2,000,000 |
|
(3) |
|
$ |
8,814,382 |
|
President and Chief |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Executive Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Kannan Sugantharaman (4) |
|
2025 |
|
|
184,992 |
|
|
|
584,700 |
|
|
|
100,000 |
|
|
|
— |
|
|
|
|
869,692 |
|
Chief Financial & |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operations Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Vivek Gupta (5) |
|
2025 |
|
|
101,250 |
|
|
|
— |
|
|
|
47,000 |
|
|
|
822,389 |
|
(6) |
|
|
970,639 |
|
Former President and Chief |
|
2024 |
|
|
585,000 |
|
|
|
— |
|
|
|
407,791 |
|
|
|
— |
|
|
|
|
992,791 |
|
Executive Officer |
|
2023 |
|
|
585,000 |
|
|
|
— |
|
|
|
56,400 |
|
|
|
24,398 |
|
(7) |
|
|
665,798 |
|
John J. Cronin, Jr. (8) |
|
2025 |
|
|
190,385 |
|
|
|
— |
|
|
|
77,000 |
|
|
|
457,360 |
|
(9) |
|
|
724,745 |
|
Chief Financial Officer and (10) |
|
2024 |
|
|
450,000 |
|
|
|
— |
|
|
|
266,076 |
|
|
|
— |
|
|
|
|
716,076 |
|
Corporate Secretary |
|
2023 |
|
|
450,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
450,000 |
|
29
GRANTS OF PLAN-BASED AWARDS
The following table sets forth all equity grants to our named executive officers for the fiscal year ended December 31, 2025:
Name |
|
Grant Date |
|
Stock Option Awards: Number of Securities of Underlying Options (#) |
|
|
Exercise or Base Price of Option Awards ($/sh) |
|
|
Closing Price of Grant Date ($/sh) |
|
|
Grant Date Fair Value of Stock Option Awards |
|
||||
Nirav Patel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Time-Based |
|
01/06/2025 |
|
|
351,179 |
|
|
$ |
15.41 |
|
|
$ |
15.41 |
|
|
$ |
2,280,908 |
|
Performance-based |
|
01/06/2025 |
|
|
351,179 |
|
|
$ |
15.41 |
|
|
$ |
15.41 |
|
|
$ |
2,916,543 |
|
Kannan Sugantharaman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Time-Based |
|
04/14/2025 |
|
|
75,000 |
|
|
$ |
7.60 |
|
|
$ |
7.60 |
|
|
$ |
240,075 |
|
Performance-based |
|
04/14/2025 |
|
|
75,000 |
|
|
$ |
7.60 |
|
|
$ |
7.60 |
|
|
$ |
344,625 |
|
30
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth the number of underlying securities, exercise price and expiration dates of stock options, and restricted shares that have not yet vested, held by our named executive officers as of December 31, 2025.
|
|
Option Awards |
||||||||||||||||
Name |
|
Number of |
|
|
Number of |
|
|
Number of |
|
|
Option |
|
|
Option |
||||
Nirav Patel (4) (5) |
|
|
— |
|
|
|
351,179 |
|
|
|
351,179 |
|
|
$ |
15.41 |
|
|
01/06/2035 |
Kannan Sugantharaman (6) (7) |
|
|
— |
|
|
|
75,000 |
|
|
|
75,000 |
|
|
$ |
7.60 |
|
|
04/14/2035 |
Vivek Gupta (8) |
|
|
188,112 |
|
|
|
— |
|
|
|
— |
|
|
$ |
3.63 |
|
|
2/28/2026 |
|
|
|
74,000 |
|
|
|
— |
|
|
|
- |
|
|
$ |
6.79 |
|
|
08/08/2027 |
|
|
|
250,000 |
|
|
|
— |
|
|
|
— |
|
|
$ |
15.49 |
|
|
08/08/2027 |
|
|
|
100,000 |
|
|
|
— |
|
|
|
- |
|
|
$ |
14.30 |
|
|
08/08/2027 |
John J. Cronin, Jr. (9) |
|
|
20,062 |
|
|
|
— |
|
|
|
— |
|
|
$ |
3.20 |
|
|
07/26/2026 |
|
|
|
90,000 |
|
|
|
— |
|
|
|
- |
|
|
$ |
7.46 |
|
|
11/30/2027 |
|
|
|
50,000 |
|
|
|
— |
|
|
|
— |
|
|
$ |
6.79 |
|
|
11/30/2027 |
|
|
|
100,000 |
|
|
|
— |
|
|
|
- |
|
|
$ |
15.49 |
|
|
11/30/2027 |
|
|
|
66,666 |
|
|
|
— |
|
|
|
— |
|
|
$ |
14.30 |
|
|
11/30/2027 |
OPTION EXERCISES AND STOCK VESTED
The following table provides information concerning aggregate exercises of stock options during 2025 and stock awards that were released in 2025 for each named executive officer:
|
|
Stock Options |
|
|
Stock Awards |
|
||||||||||
Name |
|
Number of Shares Acquired on Exercise (#) |
|
|
Value Realized on Exercise ($) |
|
|
Number of Shares Acquired on Vesting (#) |
|
|
Value Realized on Exercise ($) |
|
||||
Vivek Gupta (1) |
|
|
111,888 |
|
|
|
425,969 |
|
|
|
— |
|
|
|
— |
|
(1) Of the shares exercised, 29,000 were exercised and held.
31
Pay Versus Performance DISCLOSURE
As required by Item 402(v) of Regulation S-K of the Exchange Act, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company for each of the last three completed calendar years. In determining the “compensation actually paid” to the Company’s named executive officers (“NEOs”), we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table in previous years, as the SEC’s valuation methods for this section differ from those required in the Summary Compensation Table. The table below summarizes compensation values both previously reported in our Summary Compensation Table, as well as the adjusted values required in this section for the 2025, 2024 and 2023 calendar years. Note that for the NEOs other than our Chief Executive Officer (the “CEO”), compensation is reported as an average.
The information disclosed below has been prepared in accordance with Item 402(v) of Regulation S-K of the Exchange Act and does not necessarily reflect value actually realized by the NEOs or how the Company’s Compensation Committee makes regarding the compensation of the Company’s NEOs. For further information concerning the Company’s philosophy and objectives regarding the compensation of the NEOs, see the section captioned “Compensation Discussion and Analysis” on page 20.
The following table sets forth information concerning the compensation of the NEOs for each of the fiscal years ended December 31, 2025, 2024 and 2023 and the Company’s financial performance for each such fiscal year:
Year (1) |
|
Summary |
|
|
Compensation |
|
|
Summary |
|
|
Compensation |
|
|
Average Summary |
|
|
Average |
|
|
Value of Initial |
|
|
|
|
||||||||
2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
2024 |
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
2023 |
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||||||
32
(Gupta) |
|
|||||||||||||||||||||||||||||||||||
Year |
|
Summary |
|
|
Minus Option |
|
|
Plus Year-End |
|
|
Plus Year over |
|
|
Plus Fair Value |
|
|
Plus Year over |
|
|
Minus Fair |
|
|
Plus Value of |
|
|
Compensation |
|
|||||||||
2025 |
|
$ |
|
|
|
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
|
||
2024 |
|
$ |
|
|
|
— |
|
|
|
— |
|
|
$ |
|
|
|
— |
|
|
$ |
( |
) |
|
|
— |
|
|
|
— |
|
|
$ |
|
|||
2023 |
|
$ |
|
|
|
— |
|
|
|
— |
|
|
$ |
( |
) |
|
|
— |
|
|
$ |
( |
) |
|
|
— |
|
|
|
— |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(Patel) |
|
|||||||||||||||||||||||||||||||||||
Year |
|
Summary |
|
|
Minus Option |
|
|
Plus Year-End |
|
|
Plus Year over |
|
|
Plus Fair Value |
|
|
Plus Year over |
|
|
Minus Fair |
|
|
Plus Value of |
|
|
Compensation |
|
|||||||||
2025 |
|
$ |
|
|
|
( |
) |
|
|
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
|
|||
2024 |
|
$ |
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
— |
|
2023 |
|
$ |
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
— |
|
Year |
|
Average |
|
|
Minus |
|
|
Plus Average |
|
|
Plus Average |
|
|
Plus Average |
|
|
Plus Average |
|
|
Minus Average |
|
|
Plus Average |
|
|
Average |
|
|||||||||
2025 |
|
$ |
|
|
|
( |
) |
|
|
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
|
|||
2024 |
|
$ |
|
|
|
— |
|
|
|
— |
|
|
$ |
|
|
|
— |
|
|
$ |
( |
) |
|
|
— |
|
|
|
— |
|
|
$ |
|
|||
2023 |
|
$ |
|
|
|
— |
|
|
|
— |
|
|
$ |
( |
) |
|
|
— |
|
|
$ |
( |
) |
|
|
— |
|
|
|
— |
|
|
$ |
|
||
Analysis of the Information Presented in the Pay Versus Performance Table
As described in the Compensation Discussion and Analysis section on pages 20 to 28, our executive compensation program includes a variable compensation component in the form of an annual performance-based cash bonus, based upon the Company’s achievement of certain key financial goals, and grants of equity-based compensation, such as stock options, which are long-term incentives that we believe link compensation levels to shareholder value creation. Mastech Digital generally seeks to incentivize
33
long-term performance and therefore does not specifically align our performance measures with “compensation actually paid”, as computed in accordance with Item 402(v) of SEC Regulations S-K for a particular year.
34
Description of Relationship Between NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”):
The following chart sets forth the relationship between Compensation Actually Paid to our CEO and the average of Compensation Actually Paid to our NON-CEO NEOs versus the Company’s TSR over the three fiscal years of 2025, 2024 and 2023.
Description of Relationship Between NEO Compensation Actually Paid and Company Net Income:
The following chart sets forth the relationship between Compensation Actually Paid to our CEO and the average of Compensation Actually Paid to our NON-CEO NEOs versus the Company’s Net Income over the three fiscal years of 2025, 2024 and 2023.
Our net income (loss) in 2025 was $0.6 million compared to $3.4 million in 2024 and ($7.1 million) in 2023. In 2025, the Company recorded severance expense of $3.1 million, as well as finance and accounting transition expense of $1.9 million. In 2024, the Company recovered from a 2023 loss that reflected lower demand for our services due to market uncertainty and various economic headwinds. In 2024, we incurred severance expense of $2.1 million. In 2023, we incurred the following pretax expenses: a goodwill impairment charge of $5.3 million; an employment claim settlement of $3.1 million; and severance expense of $2.4 million.
35
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The following table shows the potential incremental payments and benefits which our named executive officers at December 31, 2025, would be entitled to receive upon termination of employment under their respective agreements. The amounts shown in the table are based on an assumed termination as of December 31, 2025, exclude payments and benefits that are provided on a non-discriminatory basis to our employees generally upon termination of employment and represent estimates of the incremental amounts that would be paid to each executive upon his termination based on base salary, if applicable, the annual performance-based bonus at the “at goal” target amount as of December 31, 2025, and our current premium costs for medical and welfare benefits. In addition, under the terms of our current year annual performance-based plan, our executives would become entitled to a bonus, determined under the plan terms, if they remained employed as of December 31 of the applicable year. As such, we would not consider the current year bonus payable to a named executive officer with a December 31 termination date to be a payment based upon termination, and no such payments have been included in this section. Further, if any of our named executive officers was terminated without cause by the Company during the calendar year, he would become entitled to a pro-rata bonus based upon the period of his employment during the year, with the amount determined based upon actual Company performance and payable when bonuses are generally paid in the following calendar year.
Name |
|
Salary |
|
|
Annual |
|
|
Equity |
|
|
Healthcare |
|
|
Total |
|
|||||
Nirav Patel (1) |
|
$ |
1,000,000 |
|
|
$ |
500,000 |
|
|
$ |
— |
|
|
$ |
20,844 |
|
|
$ |
1,520,844 |
|
Kannan Sugantharaman (2) |
|
|
119,250 |
|
|
|
100,000 |
|
|
|
— |
|
|
|
— |
|
|
|
219,250 |
|
All calculations were estimated based upon a December 31, 2025 termination scenario. The measurement date for the estimated Company equity awards was based upon a closing price of $6.98 at December 31, 2025.
36
37
DIRECTOR COMPENSATION
The following table provides information concerning the compensation of our independent Directors for fiscal year 2025:
Name |
|
Fees Earned or |
|
|
Stock |
|
|
Other Director |
|
Total |
|
|||
Vladimir Rak (1) (3) |
|
|
80,000 |
|
|
|
75,000 |
|
|
― |
|
|
155,000 |
|
Arun Nayar (1) (3) |
|
|
90,000 |
|
|
|
75,000 |
|
|
― |
|
|
165,000 |
|
Srinivas Kandula (1) (3) |
|
|
85,000 |
|
|
|
75,000 |
|
|
― |
|
|
160,000 |
|
Bonnie K. Smith (1) (3) (4) |
|
|
31,250 |
|
|
|
— |
|
|
― |
|
|
31,250 |
|
Messrs. Wadhwani, Trivedi and Patel, as non-independent directors, received no compensation for their service as Directors of the Company.
All of our Directors are reimbursed for reasonable travel expenses incurred in connection with attending Board and committee meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
At December 31, 2025, the Compensation Committee consisted of Mr. Nayar, Mr. Rak, and Dr. Kandula, with Dr. Kandula as chair. No member of this Committee was at any time during the 2025 fiscal year, or at any other time, an officer or employee of the Company, and no member had any relationships with the Company requiring disclosure under Item 404 of Regulation S-K of the Exchange Act. No named executive officer of the Company has served as a director or member of the Compensation Committee (or other Committee serving an equivalent function) of any other entity, one of whose named executive officers served as a director or member of the Compensation Committee of the Company.
38
REPORT OF THE AUDIT COMMITTEE
This Audit Committee Report shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission nor shall this information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into a filing.
The Audit Committee reviews the Company’s financial reporting process on behalf of the Board. In addition, the Audit Committee selects the Company’s independent public accountants. The Company’s management was previously granted authority by the Audit Committee to hire the Company’s audit firm for permissible, non-audit service projects under $10,000 in fees per engagement and to notify the Audit Committee at the next regularly scheduled meeting of any such project awarded to the audit firm. Projects expected to be greater than $10,000 must be pre-approved by the Audit Committee in advance of the commencement of any work.
Management is responsible for the Company’s internal controls and the financial reporting process. The independent public accountants are responsible for performing an independent audit of the Company’s financial statements in accordance with generally accepted accounting standards and to issue a report thereon. The Audit Committee’s responsibility is to oversee these processes.
In this context, the Audit Committee has met and held discussions with management and the independent public accountants. Management represented to the Audit Committee that the Company’s financial statements were prepared in accordance with generally accepted accounting principles and the Audit Committee has reviewed and discussed the audited financial statements with management and the independent public accountants. The Audit Committee discussed with the independent public accountants the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board.
In making its assessment of internal control over financial reporting, management used the criteria described in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO-2013").
The Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, assessed the control effectiveness as of December 31, 2025. Based upon this assessment, management has concluded that the Company's internal control over financial reporting was effective as of December 31, 2025.
In addition, the Audit Committee has discussed with the independent public accountants the auditor’s independence from the Company and its management and has received the written disclosures and the letter from the independent accountants required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent public accountants’ communications with the Audit Committee concerning independence. The Company paid its independent public accountants $541,912 for services provided in 2025.
The Audit Committee discussed with the Company’s independent public accountants the overall scope and plans for their audits. The Audit Committee meets with the independent public accountants, with and without management present, to discuss the results of their examinations, the evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting.
Based upon the Audit Committee’s discussions with management and independent public accountants and the Committee’s review of the representations of management and the report of the independent public accountants to the Audit Committee, the Audit Committee recommended that the Board include the audited financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for filing with the Securities and Exchange Commission.
Respectfully submitted,
The Audit Committee
Arun Nayar, Chair
Srinivas Kandula
Vladimir Rak
39
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Principal Accountant Fees and Services
Fees billed to us by the firm UHY LLP (“UHY”) for services rendered for 2024 and 2025 in the following categories and amounts were:
|
|
2025 UHY |
|
|
2024 UHY |
|
||
Audit fees |
|
$ |
318,112 |
|
|
$ |
308,500 |
|
Audit-related fees |
|
|
24,600 |
|
|
|
23,000 |
|
Tax fees |
|
|
199,200 |
|
|
|
140,500 |
|
All other fees |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
541,912 |
|
|
$ |
472,000 |
|
Audit fees for 2025 and 2024 totaled $318,112 and $308,500, respectively. This category includes the audit of the Company’s annual financial; review of financial statements included in the Company’s Form 10-Q Quarterly Reports; and services that are normally provided by the independent auditors in connection with statutory and regulatory filings and are inclusive of reimbursement of travel and travel-related expenses. The audit-related fees for 2025 and 2024 totaled $24,600 and $23,000, respectively, and pertained to the audit of the Company’s 401(k) Plan and Employee Stock Purchase Plan for both years. The tax fees for 2025 and 2024 totaled $199,200 and $140,500 and pertained to transfer pricing studies prepared across our entire organization and the preparation of all federal and state U.S. tax returns.
Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Auditors
The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one-year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. Management is required to periodically report to the Audit Committee regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. Of the total fees paid to the independent auditors in 2025, 100% of these fees were pre-approved by the Audit Committee.
Representatives of BDO India are expected to be available at the annual meeting of shareholders to respond to appropriate questions and will have an opportunity to make comments if they desire to do so.
POLICIES AND PROCEDURES FOR APPROVING RELATED PERSON TRANSACTIONS
Pursuant to the charter of the Audit Committee, all material transactions relating to related person transactions are to be approved by the Audit Committee, which is comprised of disinterested members of the Board of Directors.
40
Proposals of shareholders intended to be presented at the 2027 Annual Meeting of Shareholders must be received by the Company at its principal office in 1305 Cherrington Parkway, Building 210, Suite 400, Moon Township, PA 15108, not later than December 16, 2026, and must otherwise comply with the requirements of Rule 14(a)-8 under the Exchange Act for inclusion in the Proxy Statement for that meeting.
The Company’s Articles provide that advance written notice of shareholder-proposed business intended to be brought before an annual meeting of shareholders must be given to the Secretary of the Company not less than 120 days in advance of the meeting at which the business is proposed to be transacted; provided, however, that in the event that less than 130 days’ notice or prior public disclosure of the date of the annual meeting is given, notice from the shareholder of business to be transacted must be received not later than the tenth day following the date on which notice of the date of the annual meeting was mailed or public disclosure was made, whichever first occurred.
The Company’s Articles also provide that a shareholder may request that persons be nominated for election as directors by submitting written notice thereof, together with the written consent of the persons proposed to be nominated consenting to serve as a director of the Company if so nominated, to the Secretary of the Company not less than 120 days prior to the date of the annual meeting; provided, however, that in the event that less than 130 days’ notice or prior public disclosure of the date of the annual meeting is given, notice from the shareholder of the nomination must be received not later than the tenth day following the date on which such notice of the date of the annual meeting was mailed or public disclosure was made, whichever first occurred. To be in proper form, the notice of nomination must set forth: (i) the names and addresses of the shareholder proposing the nomination and each proposed nominee; (ii) a representation that the shareholder is a holder of record of stock of the Company entitled to vote at such meeting and that the shareholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iii) a description of all arrangements or understandings between the shareholder and each nominee and such other information regarding each proposed nominee pursuant to which the nomination or nominations are to be made by the shareholder; and (iv) such other information regarding each proposed nominee as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC had the nominee been nominated by the Board of Directors.
FORM 10-K
A copy of the Company’s Annual Report to Shareholders for the year ended December 31, 2025, as well as the Company’s Annual Report on Form 10-K (without exhibits) for the year ended December 31, 2025, as filed with the SEC on March 18, 2026, is being mailed to the shareholders with this Proxy Statement. Exhibits will be provided upon request and payment of an appropriate processing fee.
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement and annual report addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies.
This year, a number of brokers with account holders who are Mastech Digital shareholders will be “householding” our proxy materials. A single Annual Report and Proxy Statement will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate Proxy Statement and Annual Report, you may:
41
We will promptly deliver, upon request to the Mastech Digital e-mail, fax number or address listed above, a separate copy of the annual report and Proxy Statement to a shareholder at a shared address to which a single copy of the documents was delivered. If you currently receive multiple copies of the Proxy Statement at your address and would like to request “householding” of these communications, please contact your broker if you are not a shareholder of record; or contact our Corporate Secretary if you are a shareholder of record, using the contact information above.
WHERE YOU CAN FIND MORE INFORMATION
The SEC maintains a website that contains reports, proxy and information statements and other information regarding us and other issuers that file electronically with the SEC at www.sec.gov. Our Proxy Statements, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as any amendments to those reports, are available free of charge through the SEC’s website. Shareholders may also read and copy materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. Shareholders may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
OTHER MATTERS
The Board of Directors does not know of any other matters that may come before the meeting. However, if any other matters are properly presented at the meeting, it is the intention of the persons named in the accompanying proxy to vote, or otherwise act, in accordance with their judgment on such matters.
By Order of the Board of Directors
Jennifer Ford Lacey
Corporate Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. YOUR PROMPT RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND WE APPRECIATE YOUR COOPERATION.
42
EXHIBIT A
SECOND AMENDMENT TO
MASTECH DIGITAL, INC.
STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED)
RECITALS
WHEREAS, Mastech Digital, Inc., a Pennsylvania corporation (the “Company”), maintains the Mastech Digital, Inc. Stock Incentive Plan, as amended and restated (the “Plan”);
WHEREAS, the Plan was originally effective as of October 1, 2008, was amended and restated effective as of May 14, 2024 and further amended on May 14, 2025;
WHEREAS, Section 19 of the Plan provides that the Board of Directors (the “Board”) of the Company may amend the Plan subject to certain limitations;
WHEREAS, the Board has resolved that it is in the best interest of the Company and its shareholders to amend the Plan to add restricted stock units as a type of award available for issuance under the Plan; and
WHEREAS, the requisite shareholders of the Company have approved the foregoing amendment.
NOW, THEREFORE, the Plan is amended in the following respects:
AMENDMENT
“Award” or “Awards,” except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock Awards, Stock Awards, Performance Share Awards, Stock Appreciation Rights, and Restricted Stock Unit Awards.
A 1
“Restricted Stock Units Awards” means any Award granted pursuant to Section 12A.
Section 12A. Restricted Stock Unit Awards.
A 2
(c) A participant who is obligated to pay to the Company an amount required to be withheld under applicable tax withholding requirements in connection with either the exercise of a Non-Qualified Stock Option, or the receipt, vesting or settlement of a Restricted Stock Award, Stock Award Performance Share Award, or Restricted Stock Unit under the Plan may, in the discretion of the Plan Administrator, elect to satisfy this withholding obligation, in whole or in part, by requesting that the Company withhold shares of stock otherwise issuable to the participant having a Fair Market Value on the date on which the amount of tax to be withheld is determined which does not exceed the amount of tax required to be withheld (based on the statutory minimum withholding rates for federal and state tax purposes, including payroll taxes); provided, however, that shares may be withheld by the Company only if such withheld shares have vested. Any fractional amount shall be paid to the Company by the participant in cash or shall be withheld from the participant’s next regular paycheck.
(b) If the outstanding shares of the Stock shall be changed in value by reason of any spin-off, split-off or split-up, or dividend in partial liquidation, dividend in property other than cash, or extraordinary distribution to shareholders of the Stock, (i) the Plan Administrator shall make any adjustments to any then outstanding Stock Option, Stock Appreciation Right, Restricted Stock Award, Performance Share Award, Restricted Stock Unit Award or other stock Award which it determines are equitably required to prevent dilution or enlargement of the rights of participants which would otherwise result from any such transaction, and (ii) unless otherwise determined by the Plan Administrator in its discretion, any stock, securities, cash or other property distributed with respect to any shares of Restricted Stock held in escrow or for which any shares of Restricted Stock held in escrow shall be exchanged in any such transaction shall also be held by the Company in escrow and shall be subject to the same restrictions as are
A 3
applicable to the shares of Restricted Stock in respect of which such stock, securities, cash or other property was distributed or exchanged.
(a) Upon a Change of Control, (i) each outstanding Option, SAR and Performance Share Award shall be assumed by the Acquiring Company (as defined below) or parent thereof or replaced with a comparable option or right to purchase or to be awarded shares of the capital stock, or equity equivalent instrument, of the Acquiring Company or parent thereof, or other comparable rights (such assumed and comparable options and rights, together, the “Replacement Options”), (ii) each share of Restricted Stock shall be converted to a comparable restricted grant of capital stock, or equity equivalent instrument, of the Acquiring Corporation or parent thereof or other comparable restricted property (such assumed and comparable, restricted grants, together, the “Replacement Restricted Stock”), and (iii) each share of Restricted Stock Unit shall be converted to a comparable restricted grant of restricted stock units, or equity equivalent instrument, of the Acquiring Corporation or parent thereof or other comparable award (such assumed and comparable, restricted stock unit grants, together, the “Replacement Restricted Stock Unit”); provided, however, that if the Acquiring Corporation or parent thereof does not agree to grant Replacement Options, Replacement Restricted Stock, and Replacement Restricted Stock Units, then all outstanding Options and SARs which have been granted under the Plan and which are not exercisable as of the effective date of the Change of Control shall automatically accelerate and become exercisable immediately prior to the effective date of the Change of Control, and the Performance Period with respect to all Performance Share Awards shall end on the day prior to the effective date of the Change of Control and become payable to the extent the Performance Goals were achieved, and all restrictions and conditions on any Restricted Stock, Restricted Stock Units or other stock Award shall lapse upon the effective date of the Change of Control. The term “Acquiring Corporation” means the surviving, continuing, successor or purchasing corporation, as the case may be. The Board may determine, in its discretion, (but shall not be obligated to do so) that in lieu of the issuance of Replacement Options, all holders of outstanding Options and SARs which are exercisable immediately prior to a Change of Control (including those that become exercisable under this Section 16(a)) will be required to surrender them in exchange for a payment by the Company, in cash or Stock as determined by the Board, of an amount
A 4
equal to the amount (if any) by which the per share value of Stock subject to unexercised Options or SARs (determined by the Board in good faith, based on the applicable price in the transaction giving rise to the Change of Control, and such other considerations as the Board deems appropriate) exceeds the exercise price of those Options or SARs (where Options and SARs are issued in tandem, such payment to be made only with respect to a single underlying share of Stock upon surrender of each tandem pair of Options and SARs), with such payment to take place as of the date of the Change of Control or such other date as the Board may prescribe.
Except as set forth in this amendment, the Plan shall be unaffected hereby and shall remain in full force and effect.
* * *
[SIGNATURE PAGE FOLLOWS]
A 5
The undersigned hereby certifies that the foregoing amendment to the Plan was duly approved and adopted and has executed this amendment to the Plan as of ________, 2026.
MASTECH DIGITAL, INC.
By:
Name:
Title:
A 6
EXHIBIT B
FIRST AMENDMENT TO
MASTECH DIGITAL, INC.
STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED)
RECITALS
WHEREAS, Mastech Digital, Inc., a Pennsylvania corporation (the “Company”), maintains the Mastech Digital, Inc. Stock Incentive Plan, as amended and restated (the “Plan”);
WHEREAS, the Plan was originally effective as of October 1, 2008, was amended and restated effective as of May 14, 2014, was further amended on May 18, 2016, May 16, 2018, May 15, 2019, May 13, 2020 and May 10, 2023, and was amended and restated effective as of May 14, 2024;
WHEREAS, Section 19 of the Plan provides that the Board of Directors (the “Board”) of the Company may amend the Plan subject to certain limitations;
WHEREAS, the Plan currently authorizes the issuance of up to 5,400,000 shares of common stock, par value $.01 per share, of the Company (“Stock”) and the Board has resolved that it is in the best interest of the Company and its shareholders to amend the Plan to increase the number of shares of Stock that may be issued pursuant to the Plan by 800,000 shares; and
WHEREAS, the requisite shareholders of the Company have approved the foregoing amendment.
NOW, THEREFORE, the Plan is amended in the following respects:
AMENDMENT
1. The first sentence of Section 5 of the Plan shall be deleted in its entirety and replaced with the following:
“Shares Subject to the Plan. The number of shares of Stock which may be issued pursuant to the Plan shall be 6,200,000 shares, subject to adjustment as provided in Section 14, all of which may be issued as Incentive Stock Options.”
2. Except as set forth in this amendment, the Plan shall be unaffected hereby and shall remain in full force and effect.
* * *
[SIGNATURE PAGE FOLLOWS]
B-1
The undersigned hereby certifies that the foregoing amendment to the Plan was duly approved and adopted and has executed this amendment to the Plan as of May 14, 2025.
MASTECH DIGITAL, INC.
By: /s/John J. Cronin, Jr.
Name: John J. Cronin, Jr.
Title: Chief Financial Officer
B-2
MASTECH DIGITAL, INC.
STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED)
Effective as of May 14, 2024, the Mastech Digital, Inc. Stock Incentive Plan is hereby amended and restated by Mastech Digital, Inc., as set forth herein. The Mastech Digital, Inc. Stock Incentive Plan was originally effective as of October 1, 2008, was amended and restated effective as of May 14, 2014, and further amended on May 18, 2016, May 16, 2018, May 15, 2019, May 13, 2020 and May 10, 2023.
The following terms shall be defined as set forth below:
“Act” means the Securities Exchange Act of 1934, as amended.
“Award” or “Awards,” except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock Awards, Stock Awards, Performance Share Awards and Stock Appreciation Rights.
“Board” means the Board of Directors of the Company.
“Change of Control” shall have the meaning assigned to that term in Section 15.
“Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.
“Effective Date” means May 14, 2024.
“Fair Market Value” of the Stock on any given date shall be the value of the Stock as determined below. If the Stock is listed on the NYSE American or any other established stock exchange or a national market system, the Fair Market Value shall be the closing price as reported on the NYSE American or such other exchange or system for such date or, if no sales were reported for such date, for the last day preceding such date for which a sale was reported. If the Fair Market Value cannot be determined in accordance with the preceding sentence, the Board shall in good faith determine the Fair Market Value of the Stock on such date.
“Incentive Stock Option” means any Stock Option designated and qualified as an “incentive stock option” as defined in Section 422 of the Code.
“Independent Director” means a member of the Board who is not an employee or officer of the Company or any Subsidiary.
B-3
“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.
“Option” or “Stock Option” means any Option to purchase shares of Stock granted pursuant to Section 6.
“Performance Share Award” means any Award granted pursuant to Section 12.
“Restricted Stock Award” means any Award granted pursuant to Section 10.
“Stock” means the common stock, par value $.01 per share, of the Company, subject to adjustments pursuant to Section 14.
“Stock Appreciation Right” or “SAR” means any Award granted pursuant to Section 7.
“Stock Award” means any award granted pursuant to Section 11.
“Subsidiary” means any corporation or other entity (other than the Company) in any unbroken chain of corporations or other entities, beginning with the Company, if each of the corporations or entities (other than the last corporation or entity in the unbroken chain) owns stock or other interests possessing 50% or more of the economic interest or the total combined voting power of all classes of stock or other interests in one of the other corporations or entities in the chain.
The determination of the Plan Administrator on any such matters shall be conclusive.
B-4
Stock Options with respect to no more than 625,000 shares of Stock may be granted to any one individual participant during any one calendar year period and Stock Appreciation Rights with respect to no more than 625,000 shares of Stock may be granted to any one individual participant during any one calendar year period. In any one calendar year during a particular Performance Period, as hereinafter defined, the maximum amount which may be earned by any individual participant under Performance Share Awards granted under the Plan for that calendar year of the Performance Period shall be limited to 625,000 shares of Stock. In the case of multi-year Performance Periods, the number of shares which are earned in any one calendar year of the Performance Period is the number of shares paid for the Performance Period divided by the number of calendar years in the period. In applying this limit, the number of shares of Stock earned by a Participant shall be measured as of the close of the applicable calendar year which ends the Performance Period, regardless of the fact that certification by the Plan Administrator and actual payment to the Participant may occur in a subsequent calendar year or years.
B-5
B-6
B-7
For purposes of this Plan, the term “Cause” shall mean (a) with respect to an individual who is party to a written agreement with the Company which contains a definition of “cause” or “for cause” or words of similar import for purposes of termination of employment thereunder by the Company, “cause” or “for cause” as defined in such agreement, and (b) in all other cases (i) the willful commission by an employee of a criminal or other act that causes substantial economic damage to the Company or substantial injury to the business reputation of the Company, (ii) the commission of an act of fraud in the performance of such person’s duties to or on behalf of the Company, or (iii) the continuing willful failure of a person to perform the duties of such person to the Company (other than a failure to perform duties resulting from such person’s incapacity due to illness) after written notice thereof (specifying the particulars thereof in reasonable detail) and a reasonable opportunity to cure such failure are given to the person by the Board or the Plan Administrator. For purposes of the Plan, no act, or failure to act, on the part of any person shall be considered “willful” unless done or omitted to be done by the person other than in good faith and without reasonable belief that the person’s action or omission was in the best interest of the Company.
For purposes of this Plan, the term “Competing Business” shall mean: any person, corporation or other entity engaged in the business of (a) information technology staffing and consulting services, or (b) selling or attempting to sell any product or service which is the same as or similar to products or services sold by the Company within the last year prior to termination of such person’s employment, consultant relationship or directorship, as the case may be, hereunder;
B-8
B-9
B-10
B-11
B-12
B-13
Any other provision of the Plan notwithstanding:
B-14
B-15
B-16
B-17
To the extent that any Award fails to so comply, it shall be deemed to be modified to the extent permitted by law and to the extent deemed advisable by the Plan Administrator in order to comply with Rule 16b-3.
B-18
ENDORSEMENT_LINE SACKPACK 00001 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Votes submitted electronically must be received by 11:59 p.m., Eastern Time, on May 12, 2026. Online Go to www.investorvote.com/MHH or scan the QR code — login details are located in the shaded bar below Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/MHH Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas 2026 Annual Meeting Proxy Card 1234 5678 9012 345 q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q A Proposals — The Board of Directors recommends a vote FOR Proposals 1, 2 and 3: 1. The election of two (2) persons as Class III Directors: For Withhold For Withhold 01 - Arun Nayar 02 - Srinivas Kandula 2. Vote to approve the amendment to the Company’s Stock Incentive Plan, as amended and restated (the “Plan”), to allow for the issuance of restricted stock units (“RSUs”). For Against Abstain 3. A non-binding advisory vote on the compensation of the named executive officers of the Company (“Say on Pay”). For Against Abstain B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. NOTE: Please sign name(s) exactly as printed hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If the signer is a corporation or partnership, please sign the full corporate or partnership name and indicate title as duly authorized officer or partner. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. C 1234567890 1UPX 687360 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND 049ZSB
Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/MHH q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q Mastech Digital, Inc. This Proxy is Solicited on Behalf of the Board of Directors The undersigned hereto appoints Nirav Patel and Jenna Ford Lacey and each of them, acting singly, proxies of the signer with power to appoint a substitute and hereby authorizes them to represent and to vote all shares of Common Stock, par value $0.01 per share, of the Company held by the undersigned at the Company’s Annual Meeting of Shareholders scheduled to be held on Wednesday, May 13, 2026, at 9:00 AM Central Time at Mastech Digital, Inc.’s office at 511 East John Carpenter Freeway, Suite 500, Las Colinas, TX 75062. In their discretion, the proxy holders are authorized to vote upon such matters as may properly come before the Annual Meeting or any adjournment or postponement thereof. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS’ RECOMMENDATIONS. PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. (IMPORTANT - TO BE SIGNED AND DATED ON REVERSE SIDE) C Non-Voting Items q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q Change of Address — Please print new address below. Comments — Please print your comments below