DEFA14A: Marathon Digital Holdings Seeks Stockholder Approval for Equity Incentive Plan Amendment

Marathon Digital Holdings is supplementing its proxy statement to encourage stockholders to approve an amendment to its 2018 Equity Incentive Plan, increasing the reserved shares by 15,000,000.

Summary

• Marathon Digital Holdings is seeking stockholder approval for Proposal No.
• 4, which involves amending the company's Amended and Restated 2018 Equity Incentive Plan to increase the number of shares of common stock reserved under the plan by 15,000,000.
• The Board approved this amendment on April 26, 2024, contingent on stockholder approval at the Annual Meeting on June 27, 2024.
• The primary purpose of the 2018 Plan is to attract, retain, and motivate employees, directors, consultants, advisors, and executives critical to the company's success.
• The plan includes a Long-Term Incentive Program (LTIP) that issues restricted stock units.
• For 2023, LTIP awards were based on performance objectives such as stock price and market capitalization increases, exceeding exahash rate targets, outperforming third-party pool operators, and strengthening the balance sheet.
• The company believes that without the approval of Proposal No.
• 4, its ability to attract and retain key personnel would be negatively impacted.
• Proxy advisory firm Glass Lewis supports the approval of the Plan Amendment.

Sentiment

Score: 7

Explanation: The document conveys a positive outlook regarding the company's ability to attract and retain talent, supported by the recommendation from Glass Lewis. However, it also acknowledges the potential negative impact if the amendment is not approved.

Positives

• The proposed amendment aims to enhance the company's ability to attract and retain key personnel through long-term equity incentives.
• The LTIP aligns executive compensation with strategic objectives and stockholder interests.
• The LTIP awards are designed to be retentive, vesting over a long-term service period.
• The company has received support from Glass Lewis for the proposed amendment.

Negatives

• Failure to approve the amendment could negatively impact the company's ability to attract and retain employees and other service providers.

Risks

• If the Plan Amendment is not approved, Marathon Digital Holdings may face challenges in attracting and retaining talent, potentially hindering its strategic objectives.

Future Outlook

The company aims to continue granting LTIP awards to align employee interests with those of stockholders and promote long-term success, contingent on the approval of the Plan Amendment.

Management Comments

• We are writing to encourage you to vote in accordance with the recommendations of our board of directors (the Board) on all of the proposals to be voted upon at the Annual Meeting.
• In particular, we seek your support for Proposal No. 4, the approval of an amendment to our Amended and Restated 2018 Equity Incentive Plan (our 2018 Plan) to increase the number of shares of our common stock, par value $0.0001 per share (the Common Stock) reserved under our 2018 Plan by 15,000,000 (the Plan Amendment), which is more fully described in the Proxy Statement.

Industry Context

Long-term equity incentive compensation is a typical compensation element within the industry and the market generally, and retaining the ability to issue meaningful equity incentive awards to employees and other service providers is critical to providing market-competitive compensation.

Comparison to Industry Standards

• Many companies in the technology and cryptocurrency sectors utilize equity incentive plans to attract and retain talent.
• Companies like Riot Platforms and CleanSpark also use similar equity-based compensation strategies to align employee interests with company performance.
• The size of the equity pool increase (15,000,000 shares) should be compared to the company's current outstanding shares and industry benchmarks to assess its reasonableness.

Stakeholder Impact

• Approval of the amendment could positively impact employees through continued equity incentives.
• Stockholders could benefit from the alignment of employee interests with company performance.
• Failure to approve the amendment could negatively impact the company's ability to attract and retain talent, potentially affecting long-term growth and shareholder value.

Next Steps

• Stockholder vote on Proposal No. 4 at the Annual Meeting on June 27, 2024.
• Implementation of the Plan Amendment if approved by stockholders.

Key Dates

Keywords

Equity Incentive Plan, Proxy Statement, Stockholders, LTIP, Marathon Digital Holdings, Amendment