Form 4: Marathon Digital Holdings CEO Frederick Thiel Receives Performance-Based Restricted Stock Units

Frederick Thiel, CEO of Marathon Digital Holdings, was granted long-term incentive performance-based restricted stock units (LTIP Performance RSUs) on May 1, 2024, with vesting contingent upon the company's total stockholder return (TSR).

Summary

• On May 1, 2024, Frederick Thiel, the CEO of Marathon Digital Holdings, received a grant of 1,646,606 long-term incentive performance-based restricted stock units (LTIP Performance RSUs) under the company's 2018 Equity Incentive Plan.
• These RSUs represent a contingent right to receive shares of Marathon Digital Holdings common stock.
• The number of RSUs that will ultimately vest depends on the company's achievement of a pre-determined performance metric related to total stockholder return (TSR).
• The reported number of RSUs represents the maximum achievable award for 2024, which is 200% of the target award.
• The maximum number of shares that may be earned by the Reporting Person is equal to $34,200,000 divided by the average closing price over the prior 100 consecutive trading days as determined on the Grant Date.
• If the TSR target metric is achieved, 25% of the grant will vest on January 31, 2025, with the remaining portion vesting in 12 quarterly installments of 6.25% thereafter, contingent upon Thiel's continued service to the company.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The granting of performance-based RSUs is a common practice and aligns management incentives with shareholder value. The ultimate value depends on the company's performance.

Positives

• The performance-based nature of the RSUs aligns executive compensation with shareholder value creation through total stockholder return (TSR).

Risks

• The actual number of RSUs that vest could be significantly lower than the reported amount if the company fails to meet the TSR target.
• The vesting schedule is contingent upon Frederick Thiel's continued service to Marathon Digital Holdings.

Future Outlook

The vesting of the LTIP Performance RSUs is contingent upon the company's achievement of a pre-determined TSR target and Frederick Thiel's continued service to the company.

Industry Context

The use of performance-based equity compensation is a common practice in publicly traded companies to align executive incentives with shareholder interests. The specific metrics and vesting schedules vary depending on the company and industry.

Comparison to Industry Standards

• Many companies in the technology and cryptocurrency sectors use performance-based equity compensation to incentivize executives.
• Companies like Riot Platforms and Coinbase also utilize similar equity incentive plans tied to performance metrics.
• The vesting schedules and performance targets are typically tailored to the specific goals and challenges of each company.

Stakeholder Impact

• Shareholders: The performance-based RSUs aim to align management's interests with shareholder value creation.
• Employees: The grant could motivate employees by aligning the CEO's compensation with the company's overall performance.

Key Dates