Form 4: Marathon Digital Holdings General Counsel Receives Performance-Based Restricted Stock Units

Zabi Nowaid, General Counsel of Marathon Digital Holdings, was granted performance-based restricted stock units (RSUs) on May 1, 2024, tied to the company's total stockholder return.

Summary

• On May 1, 2024, Zabi Nowaid, General Counsel of Marathon Digital Holdings, received a grant of long-term incentive performance-based restricted stock units (LTIP Performance RSUs) under the company's 2018 Equity Incentive Plan.
• The number of LTIP Performance RSUs reported is 433,317, representing the maximum achievable award for 2024, which is 200% of the target award.
• The final number of shares will be determined based on Marathon Digital Holdings' achievement of a pre-determined performance metric relating to total stockholder return (TSR).
• The actual number of LTIP Performance RSUs that will vest can range from 0% to 200% of the target, depending on the achievement of the TSR target metric.
• 25% of the grant will vest on January 31, 2025, and the remaining portion will vest in 12 quarterly installments of 6.25% thereafter, subject to continued service.

Sentiment

Score: 7

Explanation: The announcement is generally positive as it aligns management incentives with shareholder value through performance-based compensation. The vesting schedule also promotes long-term commitment.

Positives

• The performance-based RSUs align the General Counsel's interests with those of the shareholders by linking compensation to total stockholder return.
• The vesting schedule encourages long-term commitment from the General Counsel.

Risks

• The actual number of RSUs that vest depends on the company's performance against the TSR metric, which may not be achieved.
• The General Counsel must remain employed by the company through each vesting date to receive the RSUs.

Future Outlook

The number of LTIP Performance RSUs that will ultimately vest depends on the company's achievement of the TSR target metric, ranging from 0% to 200% of the target. Vesting will occur over time, subject to continued service.

Industry Context

Granting equity-based compensation, particularly performance-based RSUs, is a common practice in the industry to incentivize executives and align their interests with those of shareholders. The specific metrics and vesting schedules vary depending on the company and its goals.

Comparison to Industry Standards

• Companies like Riot Platforms and Hut 8 also use equity-based compensation for their executives.
• The vesting schedules and performance metrics are often tailored to the specific goals and circumstances of each company.
• The use of TSR as a performance metric is common, as it directly reflects the return to shareholders.

Stakeholder Impact

• Shareholders: The performance-based RSUs align management's interests with shareholder value.
• Employees: The grant may have a positive impact on employee morale by demonstrating the company's commitment to its executives.
• Executive: The General Counsel is incentivized to improve the company's total stockholder return.

Next Steps

• The company will need to track its performance against the TSR metric to determine the number of LTIP Performance RSUs that will vest.
• The General Counsel will need to continue their service to the company through each vesting date to receive the RSUs.

Key Dates