COGENT COMMUNICATIONS HOLDINGS, INC. 8-K

What Happened
Cogent Communications Holdings, Inc. announced an amendment (Amendment No. 11, dated December 31, 2025) to CEO David Schaeffer’s employment agreement that extends his term through December 31, 2028, resets his cash pay and incentives, and establishes multi-year restricted stock awards. The company granted the 2026 equity awards on December 31, 2025 and will grant similar awards for 2027 and 2028 if Mr. Schaeffer remains employed on January 1 of each year. In addition, the company made retention restricted-stock awards to three senior executives.

Key Details

• CEO cash compensation: new annual salary of $1,000,000 and an annual cash incentive target (and cap) of $1,250,000. Annual cash incentive is payable only if the company achieves positive annual EBITDA growth (EBITDA AGR); no payout if EBITDA AGR is zero or negative.
• CEO equity grants (per year for 2026, 2027, 2028): 229,657 time-vesting restricted shares (2026 grant valued at $5.0M) and 321,520 performance-vesting restricted shares (2026 grant valued at $7.0M).
• Vesting: 2026 time-vesting shares vest January 1, 2029 (subject to continued employment except for certain qualifying terminations); 2027–2028 time grants vest in three equal annual installments starting the year after grant. Performance shares vest (if earned) based on 3‑year EBITDA compound annual growth rate (EBITDA CAGR) and are settled on the first March 15 after the performance period; no vesting if EBITDA CAGR is zero or negative. The Compensation Committee will set specific performance targets.
• Retention awards: Thaddeus G. Weed (CFO), John B. Chang (Chief Legal Officer) and Mark Andrew Harris (Chief Revenue Officer) each received 100,000 restricted shares that vest January 1, 2029, subject to continued employment.

Why It Matters
The amendment ties significant portions of the CEO’s pay to EBITDA growth, aligning incentive payouts and large equity awards with the company’s operating performance over multi-year periods. The grants, if they vest, will result in issuance of restricted shares and will affect future equity compensation expense and outstanding share count. For investors, the filing signals management retention priorities and a clear emphasis on EBITDA growth as the metric for executive incentives.