Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On
Executive Summary and Background
The goals of our compensation programs are to ensure that the interests of our employees, including our named executive officers, are aligned with the interests of our stockholders and our business goals and that the total compensation paid to each of our named executive officers is fair, reasonable and competitive.
We provide our executive officers with a significant portion of their compensation through cash incentive compensation based upon the achievement of corporate objectives for the year as well as through equity compensation, including premium priced stock options, which are options with exercise prices above the fair market value of the Common Stock on the date of grant. These two elements of executive compensation are aligned with the interests of our stockholders because the amount of compensation ultimately received will vary with our corporate and operational performance and, in the case of options, will result in value for the named executive officers only if our stock price increases.
Key elements of our compensation programs include the following:
Compensation
Element Purpose Features Base salary To attract and retain Fixed component of pay to experienced and highly skilled provide financial stability, executives. based on responsibilities, experience, individual contributions and benchmarked company data. Annual To promote and reward the Variable component of pay based cash achievement of key short-term on annual corporate quantitative
incentive strategic and business goals of and qualitative goals.
bonuses the Company as well as
individual performance; to motivate and attract executives.
Long-term To encourage executives and Typically subject to vesting
Equity other employees to focus on based on continued service and
incentive long-term Company performance; are primarily in the form of
compensation to drive long-term stockholder stock options, premium priced
value; to promote retention; to stock options and restricted reward outstanding Company and stock, the value of which individual performance. depends on the performance of our Common Stock price, in order to align employee interests with those of our stockholders over the longer-term. 2
In addition to our direct compensation elements, the following features of our compensation program are designed to align our executive team with stockholder interests and with market best practices:
What We Do What We Don't Do
ü Maintain a benchmarking process, × Allow hedging of equity utilizing third-party independent
× Provide excessive perquisites tools × Provide supplemental executive ü Target pay based on market norms retirement plans ü Deliver executive compensation primarily through performance-based compensation ü Offer market-competitive benefits for executives that are consistent with the rest of our employees ü Hold a say-on-pay vote at least once every 3 years
During 2020, we made significant progress on our business goals. Our innovative technology enables distributed assets to function optimally in multiple applications. Our solutions meet the needs of an ongoing paradigm shift in the power, energy, and transportation industries to address the need for economic optimization and energy security, while meeting sustainability goals.
2020 results showcase the best year in the Company's history, setting the stage for meaningful future growth. These results include the following achievements that impacted executive compensation for the fiscal year endingSeptember 30, 2020 : º Revenues more than doubled compared to the prior year, while navigating a global pandemic º The Company successfully listing on Nasdaq º Acquisition and integration of two companies that are cash flow positive º Stock price improvement over the prior 12 months º Software, service and related revenues have increased to be a larger percentage of total revenues to resulting in gross margin increasing significantly sinceOctober 2019 º Significantly improved cash balance and balance sheet
Setting Executive Compensation
The Compensation Committee is responsible for reviewing, and recommending to the
The Compensation Committee makes its determination regarding executive
compensation and then makes a recommendation to the
In setting executive base salaries and bonuses and granting equity incentive awards, the Compensation Committee and the Board consider compensation for comparable positions in the market, the historical compensation levels of our executives, individual performance as compared to our expectations and objectives, our desire to motivate our employees to achieve short- and long-term results that are in the best interests of our stockholders, and a long-term commitment to our Company. We generally target a competitive position, based on independent third-party benchmark analytics to inform the mix of compensation of base salary, bonus or long-term
Comparing Compensation to Market Benchmarks
In evaluating the total compensation of our named executive officers, our
Compensation Committee, our Compensation Committee uses data from the Radford
Global Technology executive compensation survey (the "
3
Due to the nature of our business, we also compete for executive talent with other companies, including public companies that are larger and more established than we are or that possess greater resources than we do, and with smaller private companies that may be able to offer greater equity compensation potential. While competitive practice is an important component of our compensation philosophy, it is not the sole determinant of executive compensation and benefit practices and programs and we do not automatically target our executive compensation at a specific percentage of the peer group average. Instead the Compensation Committee focuses on a balance of annual and long-term compensation, which is weighted toward "at risk" performance-based compensation.
Executive Employment Agreements
On
Zachary Bradford Employment Agreement
Furthermore,
As compensation for performance during the most recent fiscal year ended
For fiscal year 2021,
Lori Love Employment Agreement
4
Furthermore,
As compensation for performance during the most recent fiscal year ended
For fiscal year 2021,
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed as part of this report:
Exhibit Number Description 10.1 Employment Agreement, entered into by and betweenCleanSpark, Inc. andZachary K. Bradford , datedOctober 26, 2020 . 10.2 Employment Agreement, entered into by and betweenCleanSpark, Inc. andLori Love , datedOctober 26, 2020 . 10.3 Employment Agreement, entered into by and betweenCleanSpark, Inc. andAmanda Kabak , datedOctober 26, 2020 . 10.4 Amended and Restated Employment Agreement, entered into by and betweenCleanSpark, Inc. andAmer Tadayon , datedOctober 26, 2020 . 10.5 Employment Agreement, entered into by and betweenCleanSpark, Inc. andS. Matthew Schultz , datedOctober 26, 2020 . 7
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