Applied Digital Corp. 8-K

What Happened Applied Digital Corporation announced that on January 6, 2026 the Board approved equity awards to CEO Wes Cummins totaling 4,500,000 performance stock units (PSUs) and 1,500,000 restricted stock units (RSUs) under the company’s 2024 Omnibus Equity Incentive Plan. The awards are intended to be in lieu of future equity grants for the next five years (absent unusual circumstances) and are designed to align Cummins’ pay with long‑term company performance.

Key Details

• Grant date: January 6, 2026; Awards: 4,500,000 PSUs and 1,500,000 RSUs.
• PSU payout structure: three 1,500,000 tranches that vest only if the company’s 90-day Average Closing Price reaches $50, $75, or $100 on or before the five‑year anniversary; PSUs represent ~1.6% of shares outstanding at grant date.
• RSU vesting: 300,000 cliff at 1 year, then 150,000 every six months to fully vest at five years; RSUs represent <0.6% of shares outstanding at grant date.
• Termination/change-in-control rules: PSUs may remain eligible to vest for 12 months after certain terminations (death, disability, without Cause, for Good Reason, or non‑renewal); RSUs may accelerate (50% or 100% depending on termination type); awards are forfeitable for covenant breaches and subject to the company’s Clawback Policy.

Why It Matters This filing shows the company is tying a significant portion of the CEO’s compensation to sustained share‑price performance and continued employment, which the Board says aligns management incentives with stockholder value creation. The PSUs require substantial stock-price appreciation before value is realized, limiting near-term dilution, while the RSUs create multi-year retention incentives. Investors should note the explicit vesting hurdles, potential dilution figures (~2.2% combined at grant date), and acceleration/forfeiture provisions that govern how and when these awards could convert into shares.