Core Scientific Inc. (NASDAQ:CORZ), a Financial Services company, announced Monday that it has entered into a new employment agreement with Adam Sullivan, who will continue in his role as President and Chief Executive Officer. The deal, effective Thursday, follows Sullivan’s tenure as President beginning May 15, 2023 and as CEO beginning August 2, 2023.
Under the new contract, Sullivan will receive a base salary of $625,000 and is eligible for a target annual incentive of 125% of his base salary, beginning in 2024. Incentives are contingent on meeting certain performance criteria. In addition, 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 while negotiating the settlement and will reimburse business expenses as per company policy. An indemnity agreement is also expected to be arranged, giving Sullivan similar protections to the company’s other directors and senior executives.
If Sullivan’s employment is terminated by the Company without cause or if he resigns for good reason outside the Protection Period, he is entitled to 18 months of his base salary, any unpaid annual bonus and continued COBRA coverage. In addition, he will receive accelerated vesting of the unvested portion of his 2024 Capital Grant. The terms are more favorable if termination occurs during the Protection Period, including a one-time 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). Time-based RSUs will vest over the next four years, while performance-based RSUs are contingent upon the achievement of specific performance goals.
In other recent news, Core Scientific has seen a significant change in its financial landscape. Compass Point raised its price target on the company’s stock to $12.50 in response to a 200 MW AI/HPC deal with Coreweave, which is expected to generate over $3.5 billion in revenue.
The contract is expected 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 rating to a Buy rating from BTIG, due to continued operational performance and the 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 the 372 megawatts of infrastructure partially built at the company’s Texas facilities. This expansion is expected to be completed by 2024, increasing the total infrastructure owned by the company to 817 megawatts.
Finally, Core Scientific reported a March 2024 record in bitcoin earnings, mining 906 bitcoins and facilitating a profit of about 309 bitcoins to its customers. The company also sold 981 bitcoins in March, with sales revenue totaling approximately $66.3 million, contributing to a first-quarter total of approximately $160.8 million in bitcoin sales revenue.
InvestingPro Insights
As Core Scientific Inc. (NASDAQ:CORZ) strengthens its leadership structure with Adam Sullivan at the helm, the company’s financial metrics and market performance provide broader context for investors. According to InvestingPro data, Core Scientific currently has a market capitalization of about $1.84 billion. The company has shown a remarkable return of 179.57% in one month price, indicating a strong short-term increase in its stock value. Additionally, revenue growth for the most recent quarter was an impressive 48.6%, reflecting a potential upward trajectory in the company’s financial performance.
InvestingPro Tips finds that analysts are bullish on Core’s future, with two analysts revising their earnings upward for the coming period, signaling confidence in the company’s ability to grow its bottom line. Furthermore, the significant returns over the past week and month suggest that the market is responding favorably to recent developments within the company. For investors looking to dig deeper into Core Scientific’s performance and future outlook, additional InvestingPro Tips are available, providing a comprehensive analysis of the company’s financial health and stock potential. Using the coupon code PRONEWS24investors can get an additional 10% off an annual or two-year subscription to Pro and Pro+ to access this valuable insight.
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