Arun Narayanan
STEMAbout Arun Narayanan
Arun Narayanan, 50, has served as Stem’s Chief Executive Officer since January 27, 2025. He was previously CEO of RES Digital Solutions (Apr 2024–Jan 2025), Chief Digital Officer at RES (Aug 2023–Mar 2024), Chief Data Officer at Anglo American (Jan 2018–Jun 2023), and spent 20+ years in software, data, and operational leadership roles at SLB (Schlumberger). He holds a bachelor’s degree from the University of Mumbai, an MS in Computer Science from Iowa State University, and MBAs from the University of Houston and the University of Texas at Austin . Company context as he assumed the role: Stem’s pay-versus-performance table shows multi-year shareholder underperformance and losses (TSR value of initial $100 investment: $47.13 in 2022, $20.45 in 2023, $3.18 in 2024; Net Income: $(124.1)M in 2022, $(140.4)M in 2023, $(854.0)M in 2024) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| RES Digital Solutions (RES) | Chief Executive Officer | Apr 2024 – Jan 2025 | Led development of software products and solutions supporting a software-focused transformation in renewables . |
| RES | Chief Digital Officer | Aug 2023 – Mar 2024 | Drove digital transformation initiatives prior to becoming RES Digital Solutions CEO . |
| Anglo American plc | Chief Data Officer | Jan 2018 – Jun 2023 | Led digital strategy and built the company’s data analytics platform (VOXEL) . |
| SLB (Schlumberger) | Various software/data leadership roles; ultimately VP, Data & Analytics for Software division | ~1996 – 2017+ (20+ years) | Defined and implemented software solutions for global clients; extensive software and operations leadership across regions . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No public company directorships disclosed in filings reviewed . |
Fixed Compensation
| Component | Terms | Source |
|---|---|---|
| Base Salary | $575,000 annualized | |
| Target Annual Bonus | 100% of base salary (prorated for 2025) | |
| Sign-on Cash Bonus | $50,000, subject to repayment under certain circumstances |
Performance Compensation
Annual Cash Incentive (AIP) Structure and Metrics
- Company AIP metrics used in 2024: adjusted EBITDA, Contracted Annual Recurring Revenue (CARR), revenue, and operating cash flow (rigorous quantitative metrics; 100% formulaic) .
- 2025 CEO AIP target is 100% of salary (prorated for 2025); specific 2025 metric weightings/targets/payouts for the CEO were not disclosed in the appointment 8-K.
| Metric | Weighting | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|
| Adjusted EBITDA | Not disclosed | Not disclosed | Not disclosed | Not disclosed | Annual cash award (2024 program reference) |
| CARR | Not disclosed | Not disclosed | Not disclosed | Not disclosed | Annual cash award (2024 program reference) |
| Revenue | Not disclosed | Not disclosed | Not disclosed | Not disclosed | Annual cash award (2024 program reference) |
| Operating Cash Flow | Not disclosed | Not disclosed | Not disclosed | Not disclosed | Annual cash award (2024 program reference) |
| CEO 2025 AIP Target | — | 100% of base salary (prorated) | — | — | Annual cash award |
Equity Awards (Sign‑on and Initial LTI)
| Award Type | Shares | Grant/Commencement | Vesting Schedule | Performance Conditions |
|---|---|---|---|---|
| Sign-on RSUs | 225,000 | Jan 2025 appointment | Vests in two equal annual installments; first 50% on Mar 7, 2026 | Time-based only |
| Sign-on PSUs | 75,000 | Jan 2025 appointment | Vests in two equal annual installments; first 50% on Mar 7, 2026 | Subject to performance metrics set forth in award agreement (not disclosed) |
| Initial LTI RSUs | 750,000 | Jan 2025 appointment | Vests in three equal annual installments; first 33% on Mar 7, 2026 | Time-based only |
| Initial LTI PSUs | 250,000 | Jan 2025 appointment | Vests in three equal annual installments; first 33% on Mar 7, 2026 | Subject to performance metrics set forth in award agreement (not disclosed) |
- Implications: Large vesting events begin March 7, 2026 and recur annually through 2028, creating scheduled potential liquidity windows typical for executives following RSU/PSU vests .
Equity Ownership & Alignment
| Policy/Status | Details | Source |
|---|---|---|
| CEO Ownership Guideline | 5x annual base salary; five years to comply; retain 50% of net shares acquired until guideline met | |
| Hedging | Prohibited (includes short-term trading, short sales, options/derivatives; hedging transactions prohibited) | |
| Pledging | Discouraged; as of Dec 31, 2024, no shares of Company common stock beneficially owned by a director or executive officer were pledged | |
| Clawback | NYSE 303A.14-compliant recoupment policy adopted Oct 2023; applies to excess incentive-based comp for prior 3 fiscal years after a restatement | |
| Compliance | As of Mar 31, 2025, all NEOs and board members were in compliance with ownership guidelines |
Note: The DEF 14A security ownership section centers on major holders; a line-item beneficial ownership breakdown for Mr. Narayanan was not disclosed in the reviewed excerpts .
Employment Terms
| Topic | CEO (Arun Narayanan) | Reference Terms for Other Executives (context) |
|---|---|---|
| Employment Agreement | Entered Company’s form of executive employment agreement (Jan 14, 2025) | CFO/COO on standard Executive Employment Agreement forms in prior filings |
| Severance (non‑CIC) | Agreement provides severance benefits (specifics not disclosed in 8-K) | CFO/COO: 9 months base salary; prior-year unpaid bonus; pro‑rata current-year bonus; up to 9 months COBRA; certain COO equity acceleration; subject to release and covenants |
| Severance (CIC period) | Agreement includes CIC benefits (specifics not disclosed in 8-K) | CFO/COO: Cash equal to 1x (base + target bonus); prior-year unpaid bonus; pro‑rata current-year bonus; up to 12 months COBRA; subject to release and covenants |
| Equity Plan CIC Provisions | Governed by 2024 Equity Incentive Plan; Board can assume/continue/substitute awards or accelerate vesting in CIC | Plan-level CIC mechanics summarized; case-by-case per award agreement |
Performance & Track Record
- Strategic focus: Board appointed Narayanan to drive a software-forward transformation; public statements emphasize accelerating software/services growth and profitability .
- Company performance context: Pay-versus-performance shows steep TSR declines and significant net losses in 2022–2024, underscoring turnaround mandate as CEO takes office (TSR value of initial $100: $47.13 in 2022, $20.45 in 2023, $3.18 in 2024; Net Income: $(124.1)M, $(140.4)M, $(854.0)M) .
- Execution risk: CFO transition announced July 2, 2025 (Doran Hole stepping down; Brian Musfeldt appointed effective July 17, 2025) may affect near-term execution and financial discipline; Narayanan cited focus on growing software/services revenue with the new CFO .
Governance, Policies, and Shareholder Matters
- Stock ownership, hedging/pledging, clawback: Ownership guideline (5x salary for CEO); hedging prohibited; pledging discouraged and none outstanding; NYSE-compliant clawback in place .
- Equity plan capacity: 2025 proposal to amend and restate 2024 Equity Incentive Plan to add 7,500,000 shares and extend plan term, supporting ongoing equity-based incentives crucial for retention and alignment .
- Say-on-Pay: Advisory vote scheduled for 2025 Annual Meeting; Board recommends “FOR” .
- Related party transactions: None since the beginning of 2023 under relevant standards .
Compensation Structure Analysis
- Mix and risk profile: CEO package combines cash (base + target 100% bonus) with substantial time-vested RSUs and performance-based PSUs, aligning with a results-driven AIP historically keyed to adjusted EBITDA, CARR, revenue, and operating cash flow .
- Retention levers: Multi-year cliff and ratable vesting (2026–2028) across sign-on and initial LTI awards create strong retention hooks through first three years of tenure .
- Governance safeguards: No hedging, discouraged pledging with zero pledged shares; mandatory ownership guideline and clawback mitigate misalignment risk .
- Data gaps: Specific CEO severance/CIC multiples and PSU performance curves/thresholds are not disclosed in appointment 8-K; CFO/COO terms provide directional context but may not be identical to CEO terms .
Investment Implications
- Alignment: Large, staged RSU/PSU grants and a 100% target bonus tied to quantitative metrics support pay-for-performance and retention. Ownership guidelines and clawback enhance alignment and downside governance protection .
- Overhang/dilution: Proposed 7.5 million share increase to the 2024 Equity Plan supports talent retention but adds potential dilution; weigh against expected software-driven value creation under new CEO .
- Execution watch items: CEO PSU metrics are not yet disclosed; monitor upcoming award agreements for performance rigor. Leadership transitions (CFO change) and ongoing strategy realignment introduce near-term execution risk; track AIP metric outcomes and cash flow discipline .
- Turnaround baseline: Multi-year TSR decline and heavy losses set a low baseline for value creation; successful pivot to higher-margin software/services is key to unlocking PSU value and improving compensation “pay versus performance” optics going forward .
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