Management Change/Compensation - Form 8-K

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Long-Term Equity Incentive Compensation Program

As a key element of its compensation program, Marathon Digital Holdings, Inc. (the "Company") provides long-term equity incentive compensation to its employees, including its named executive officers, which is referred to as the Long-Term Incentive Program ("LTIP"). LTIP awards are issued in the form of restricted stock units ("RSUs") and are granted pursuant to the Company's 2018 Equity Incentive Plan.

Purpose of LTIP Awards

The LTIP aligns with the Company's pay-for-performance philosophy since the number of awards that vest is tied directly to the achievement of a pre-determined performance metric, and the awards therefore serve to reward the achievement relative to this metric (refer to the section titled "-Vesting of 2024 LTIP Awards" for additional information). The LTIP awards also align the interests of the Company's executives with those of its stockholders since the value of the awards is directly tied to the Company's stock price. Further, the LTIP is designed to be retentive because, even after the LTIP awards have been earned based on performance, they continue to vest over a long-term service period. Accordingly, the issuance of the LTIP awards aligns closely with the Company's executive compensation objectives.

Determination of Target LTIP Awards

For 2024, each named executive officer was assigned a target value for the LTIP award, which was reflected as a multiple of base salary for 2024. In determining the value of the 2024 LTIP awards (the "2024 LTIP Awards"), the Compensation Committee of the Board of Directors (the "Committee") considered the following factors:

	●	the Company's recent growth rate relative to a number of metrics that are significant for driving alignment with stockholder value, including stock price, market capitalization and enterprise value both in absolute terms and relative to peer group companies;
	●	the productivity of the Company's employees with respect to factors such as revenue per employee and total general and administrative expenses relative to peer group companies;
	●	the value of the long-term equity incentive compensation paid by peer group companies, as determined based on a review of compensation data provided by Compensia, which is the Committee's independent compensation consultant;
	●	the Company's role as an industry leader in the Bitcoin mining and digital asset industry;
	●	the Company's relatively high risk-profile due to factors such as regulatory uncertainty, stock price fluctuation and employee mobility; and
	●	individual performance of and expected contributions from the named executive officers.

Based on this assessment, on May 1, 2024, the Committee granted 2024 LTIP Awards to the named executive officers with the value to be based upon the Company's achievement of a pre-determined performance metric relating to total stockholder return ("TSR") as further described below. The following table sets forth the value of the RSUs that will be earned by each named executive officer assuming the Company's achievement of 100% of the TSR target:

Name		Value of RSUs Assuming Achievement of 100% of TSR Target ($)
Fred Thiel		17,100,000
Salman Khan		11,250,000
Zabi Nowaid		4,500,000

Vesting of 2024 LTIP Awards

The number of 2024 LTIP Awards that are subject to vesting is directly correlated with the Company's TSR for the period from January 1, 2024 through December 31, 2024 (the "Performance Period") relative to a TSR index for certain of the Company's peer group companies for the Performance Period. For this purpose, TSR effectively compares the percentage change in market capitalization for the Company relative to that of its peer group companies during the Performance Period.

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