Data Storage Corp 8-K

What Happened

• Data Storage Corporation (DTST) filed an 8-K on Feb 13, 2026 (Item 5.02) reporting amendments to the employment agreements for CEO Charles M. Piluso and CFO Chris Panagiotakos, effective Jan 1, 2026, and approval of the CEO's 2025 annual bonus. On Feb 9, 2026 the Board approved a 2025 bonus for Mr. Piluso that includes a cash payment (within his agreement limits) and a discretionary equity award of 160,600 restricted stock units (RSUs) that vest in full on May 20, 2026.
• The filing also reports that President Harold Schwartz resigned effective Feb 12, 2026; the company states the resignation was not due to any disagreement over the company’s financials, operations, policies, or practices.

Key Details

• Base salary: CEO Charles Piluso — $275,000/year; CFO Chris Panagiotakos — $270,000/year (during the extended employment term).
• One-time equity grants on amendment execution:
  • Piluso: 250,000 stock options + 60,000 RSUs (vest one‑third on May 20 of 2027, 2028, 2029); + 30,000 PSUs that vest on an acquisition of an entity with $3M TTM revenue; up to 225,000 additional PSUs (3 × 75,000) tied to market-cap milestones ($30M, $60M, $90M for 20 trading days).
  • Panagiotakos: 125,000 stock options + 60,000 RSUs (same one‑third vesting schedule).
• Bonus targets and special cash awards:
  • Piluso: annual cash bonus 0–200% of base (target 100%); $100,000 one-time cash per completed acquisition meeting $3M TTM; $250,000 for a reverse merger.
  • Panagiotakos: annual cash bonus 0–200% of base (target 50%).
• Termination/severance highlights: for termination without Cause (or resignation for Good Reason) prior to term end, executives receive remaining base salary for the Extended Term, acceleration of outstanding equity awards, and a one‑time severance equal to 1× base salary plus a bonus amount; enhanced severance (1× base + last annual bonus) applies if termination occurs within 24 months of a Change in Control. Severance is conditioned on signing a release.

Why It Matters

• These amendments increase guaranteed pay and create substantial equity and performance-based incentives for the CEO and CFO, which may affect future compensation expense and potential share dilution if awards vest or PSUs are earned.
• The CEO’s large, near-term RSU grant (160,600 vesting May 20, 2026) and the multi‑year option/PSU packages align management pay with acquisitions and market-cap milestones—items investors should watch when assessing corporate strategy and potential dilution.
• The President’s immediate resignation reduces executive-level depth; the company states it was not due to disagreement, but investors may monitor leadership changes and any subsequent organizational updates.