Stephen M. Ward, Jr.

About Stephen M. Ward, Jr.

Stephen M. Ward, Jr. (age 70) has served on the AI board since January 2009 and is currently a Class III director with a term expiring in 2026 . He chairs the compensation committee and serves on the nominating and corporate governance committee; the board has determined compensation and nominating committee members (including Ward) are independent under NYSE standards and he qualifies as a “non-employee director” under Rule 16b-3 . Ward is the former CEO of Lenovo (April 2005–January 2006) and held multiple senior leadership roles at IBM, including CIO and general manager roles across devices and industrial sectors; he holds a B.S. in Mechanical Engineering from Cal Poly, San Luis Obispo .

Past Roles

External Roles

Board Governance

• Committee assignments: Chair, Compensation Committee; Member, Nominating & Corporate Governance Committee; not an Audit Committee member .
• Independence: Board determined all members of compensation and nominating committees (including Ward) are independent under NYSE standards; Ward qualifies as a “non-employee director” under Rule 16b-3 .
• Meeting cadence: Compensation Committee held 3 meetings in FY2025; Nominating & Corporate Governance Committee held quarterly discussions and acted by unanimous written consents; Audit Committee held 5 meetings (Ward not a member) .
• Compensation consultant: Compensia retained by the Compensation Committee for market data, peer group development, and director compensation advice; committee assessed Compensia independence and found no conflicts .
• Insider trading and alignment policies: Hedging, short sales, margin purchases, derivative trading, and pledging are prohibited for directors under the company’s insider trading policy .

Fixed Compensation

AI does not pay cash retainers or meeting fees to non-employee directors; directors are reimbursed for reasonable out-of-pocket expenses for board and committee service .

Performance Compensation

• Structure: Equity-only via stock options; typical annual grant (“Annual Award”) of $350,000 grant date fair value for non-employee directors, pro-rated if appointed <365 days before the annual meeting .
• Chair/Lead supplements: Additional option value of $20,000 for committee chair; $45,000 for lead independent director .
• Vesting & attendance: 5% vests quarterly over five years; vesting for a quarter is suspended if the director fails to attend in-person a regularly scheduled board meeting; suspended shares vest at the 5th anniversary if attendance requirements are subsequently met .
• Early exercise and CoC: Options are early exercisable subject to company repurchase rights; vest in full upon change in control (single-trigger), conditioned on service through closing .

No RSUs or PSUs were disclosed for Ward’s director compensation in FY2025; the program is option-based with attendance-linked vesting; no TSR/financial performance metrics are tied to director equity awards .

Other Directorships & Interlocks

Compensation Committee Interlocks: None of AI’s compensation committee members, including Ward, are or have been AI officers or employees; no cross-compensation committee interlocks disclosed with entities where AI executives serve .

Expertise & Qualifications

• Extensive operational and technology leadership (IBM GM and CIO; Lenovo CEO), and long-standing public company board experience, including lead independent director responsibilities .
• Formal engineering background (B.S., Mechanical Engineering, Cal Poly SLO) .
• Board’s rationale: Qualified for board service due to extensive technology management experience and multi-company directorships .

Equity Ownership

• Ownership table based on 134,027,425 Class A and 3,499,992 Class B shares outstanding as of Aug 4, 2025; directors’ percentages are computed including options exercisable within 60 days .
• Hedging/pledging prohibited under AI policy (enhances alignment); no pledging by Ward is disclosed .

Governance Assessment

• Strengths

  • Independence and leadership: Ward chairs the Compensation Committee and serves on the Nominating & Governance Committee; committee independence affirmed under NYSE standards .
  • Alignment via equity-only pay: No cash director fees; equity options with attendance-linked vesting and early exercise, plus single-trigger CoC vesting; reinforces participation and alignment with shareholders .
  • Experienced oversight: Deep technology and operational background; multiple public board experiences including lead independent director at Carpenter Technology .
  • Advisor independence controls: Compensation Committee engages Compensia; independence assessed, no conflicts identified .
  • Anti-hedging/pledging: Company prohibits hedging, short sales, margin purchases, and pledging—reduces misalignment risk .

• Watch items / RED FLAGS

  • Tenure: >16 years on AI’s board may raise questions about long-term independence in some governance frameworks despite committee independence determinations .
  • Single-trigger CoC vesting: Full acceleration upon change in control for director options may be viewed unfavorably by some investors (misalignment risk in M&A contexts) .
  • Multiple external directorships: Active roles at Carpenter Technology, Molekule, and Sprinklr may create time-commitment scrutiny; no related-party transactions disclosed with AI .
  • Attendance transparency: Vesting is attendance-linked, but specific per-director attendance rates are not disclosed; Compensation Committee held three meetings in FY2025 .

Overall: Ward’s committee leadership and equity-only compensation structure support investor alignment and governance rigor; areas to monitor include long tenure, single-trigger vesting features, and cumulative external board commitments .