Core Scientific Inc. (NASDAQ:CORZ), a Finance Services company, announced on Monday that it has entered into a new employment agreement with Adam Sullivan, who will continue his role as President and Chief Executive Officer. The agreement, effective as of Thursday, comes after Sullivan's tenure as President since May 15, 2023, and as CEO since August 2, 2023.
Under the new contract, Sullivan will receive a base salary of $625,000 and is eligible for an annual incentive target of 125% of his base salary, starting in 2024. The incentives are contingent upon meeting certain performance criteria. Additionally, Sullivan will be part of the company's 2024 Stock Incentive Plan and will have access to employee benefit plans and other fringe benefits.
Core Scientific will also cover $80,000 in legal fees incurred during the negotiation of the agreement and reimburse business expenses as per company policy. An indemnification agreement is also expected to be arranged, providing Sullivan with protections similar to other company directors and senior executives.
If Sullivan's employment is terminated by the company without cause or if he resigns for a good reason outside the Protection Period, he is entitled to 18 months of his base salary, any unpaid annual bonuses, and COBRA continuation coverage. Additionally, he will receive accelerated vesting of the unvested portion of his 2024 Equity Grant. Terms are more favorable if the termination occurs during the Protection Period, including a lump-sum payment and continued bonus eligibility.
On the same day the employment agreement was signed, Sullivan received a 2024 Equity Grant consisting of time-based and performance-based restricted stock units (RSUs). The time-based RSUs will vest over the next four years, while the performance-based RSUs are contingent upon achieving specific performance goals.
In other recent news, Core Scientific has seen a significant shift in its financial landscape. Compass Point raised its price target for the company's shares to $12.50, in response to a 200MW AI/HPC hosting agreement with Coreweave, which is expected to generate over $3.5 billion in revenue.
The contract is projected to start in 2025 and reach full capacity later that year, contributing to a significant increase in annual revenue. Additionally, Core Scientific received an upgrade from a Neutral to a Buy rating by BTIG, due to its consistent operational performance and potential to reduce its debt more aggressively.
In other developments, Core Scientific announced a 72-megawatt capacity expansion at its Denton, Texas data center, part of a broader strategy to complete 372 megawatts of partially built infrastructure across the company's Texas facilities. This expansion is expected to be completed by 2024, increasing the total company-owned infrastructure to 817 megawatts.
Finally, Core Scientific reported a record-setting March 2024 in bitcoin earnings, mining 906 bitcoin and facilitating the earning of an estimated 309 bitcoin for its customers. The company also sold 981 bitcoin in March, with sales proceeds amounting to approximately $66.3 million, contributing to a first-quarter total of approximately $160.8 million in bitcoin sales proceeds.
InvestingPro Insights
As Core Scientific Inc. (NASDAQ:CORZ) solidifies its leadership structure with Adam Sullivan at the helm, the company's financial metrics and market performance provide a broader context for investors. According to InvestingPro data, Core Scientific currently has a market capitalization of approximately $1.84 billion. The company has shown a striking one-month price total return of 179.57%, indicating a robust short-term growth in its stock value. Furthermore, the revenue growth for the last quarter was an impressive 48.6%, reflecting a potential upward trajectory in the company's financial performance.
InvestingPro Tips reveal that analysts are optimistic about Core's future, with two analysts revising their earnings upwards for the upcoming period, signaling confidence in the company's ability to grow its bottom line. Additionally, the substantial returns over the past week and month suggest that the market is responding favorably to recent developments within the company. For investors looking to delve deeper into Core Scientific's performance and future outlook, there are additional InvestingPro Tips available, offering a comprehensive analysis of the company's financial health and stock potential. By using the coupon code PRONEWS24, investors can gain an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable insights.
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