DEF 14A of Hut 8 Corp.
Filed Apr 26, 2024 · FY20230001558370-24-005913
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
| General Information | 1 | | Proposal 1: Election of Directors | 5 | | Corporate Governance | 6 | | Executive Officer and Director Compensation | 15 | | Share Ownership of Certain Beneficial Owners and Management/Directors | 22 | | Certain Relationships and Related Party Transactions | 24 | | Independent Registered Public Accounting Firm | 30 | | Audit Committee Report | 31 | | Additional Information | 32 |
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS Our board of directors is currently comprised of nine directors. Alexia Hefti is retiring from our board of directors and not standing for re-election at our Annual Meeting. We thank Ms. Hefti for her dedicated service on the board of directors. Our board of directors decreased the size of our board of directors to eight members effective as of the Annual Meeting. At the Annual Meeting, stockholders will vote to elect as directors of the Company the eight nominees named in this proxy statement. Each of the directors elected at the Annual Meeting will hold office until the 2025 Annual Meeting of Stockholders and until his or her successor has been duly elected and qualified, or until their earlier death, resignation or removal. The board of directors has nominated Joseph Flinn, Asher Genoot, Michael Ho, E. Stanley O’Neal, Carl J. Rickertsen, Mayo Shattuck III, William Tai and Amy Wilkinson for election at the Annual Meeting. In the event that any nominee for director becomes unavailable or declines to serve as a director at the time of the Annual Meeting, the persons named as proxies will vote the proxies in their discretion for any nominee who is designated by the current board of directors to fill the vacancy. All of the nominees are currently serving as directors and we do not expect that any of the nominees will be unavailable or will decline to serve. In determining that each director should be nominated for re-election, our board considered his or her service, business experience, prior directorships, qualifications, attributes and skills described in the biography set forth below under “Corporate Governance—Executive Officers and Directors.” The board of directors recommends that you vote “FOR” the election of each of the director nominees in this Proposal 1.
Shenif Visram
Shenif Visram Shenif Visram has served as our Chief Financial Officer since the consummation of the Business Combination. Mr. Visram had previously served as Chief Financial Officer of Legacy Hut since December 2022. With over 20 years of experience leading world-class finance organizations, Mr. Visram brings a breadth of corporate and operational finance experience to Hut 8. He began his finance career at IBM Canada, where he progressed to the CFO roles in the largest IBM Canada Business units. He then moved to Cogeco Peer 1 as Vice President, Finance from September 2015 to April 2019, where he jointly led the sale of the company to a private equity firm. Mr. Visram remained with the company post-sale and assumed the role of CFO from April 2019 to July 2021, where he led the privatization of the company and played a key role in rebranding to Aptum Technologies. Mr. Visram holds a Bachelor of Business Administration from the Schulich School of Business at York University and is a Charter Professional Accountant (CPA, CMA).
Compensation and Talent Development Committee
| ● | director compensation; and |
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION The following table shows the total compensation paid or accrued during the fiscal years ended December 31, 2023 (January 1 through December 31, 2023), June 30, 2023 (July 1, 2022 through June 30, 2023), and June 30, 2022 (July 1, 2021 through June 30, 2022), as applicable, to our former Chief Executive Officer, the former Chief Executive Officer of USBTC who is currently the Chief Strategy Officer of Hut 8, our next most highly compensated executive officer during the one-year period ending December 31, 2023 who was serving as an executive officer as of December 31, 2023, and one additional individual who would have been included in the foregoing but for the fact that this individual was not serving as an executive officer of Hut 8 as of December 31, 2023 (each, a “Named Executive Officer” or “NEO”).
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| | | | | | | All Other | | | | | Salary | Bonus | Stock Awards | Option Awards | Compensation | Total | | Name and Principal Position(1) | Fiscal Year(2) | ($) | ($) | ($)(3) | ($)(3) | ($) | ($) | | Jaime Leverton, | | | | | | | | | Chief Executive Officer(4) | 1/1/2023–12/31/2023 | 47,258 | — | — | — | — | 47,258 | | Michael Ho, | | | | | | | | | Chief Strategy Officer(5) | 1/1/2023–12/31/2023 | 271,465 | — | 5,685,103 | — | — | 5,956,568 | | | 7/1/2022–6/30/2023 | 250,000 | — | — | — | — | 250,000 | | | 7/1/2021–6/30/2022 | 250,000 | — | 2,976,127 | — | 1,852,790 | 5,078,917 | | Asher Genoot, | | | | | | | | | President(6) | 1/1/2023–12/31/2023 | 265,692 | — | — | 1,167,356 | 18,588 | 1,451,636 | | | 7/1/2022–6/30/2023 | 259,615 | — | — | 219,805 | 18,588 | 498,008 | | | 7/1/2021–6/30/2022 | 250,000 | — | 3,273,853 | — | 1,940,218 | 5,464,071 | | Joel Block, | | | | | | | | | Former Chief Financial Officer(7) | 1/1/2023–12/31/2023 | 300,000 | — | — | 182,950 | — | 482,950 | | | 7/1/2022–6/30/2023 | 298,077 | — | — | 49,010 | — | 347,087 | | | 7/1/2021–6/30/2022 | 145,384 | — | — | 587,716 | — | 733,100 |
Summary Compensation Table
| (1) Each NEO’s title is reflected as of December 31, 2023. Ms. Leverton ceased serving as Hut 8’s Chief Executive Officer on February 6, 2024. Mr. Ho served as Chief Executive Officer of USBTC prior to the closing of the Business Combination, and has served as Hut 8’s Chief Strategy Officer since the closing of the Business Combination. In connection with the departure of Ms. Leverton, Mr. Genoot ceased serving as President of Hut 8 and was appointed as Hut 8’s Chief Executive Officer, effective February 6, 2024. USBTC and Mr. Block entered into an offer letter for at will employment on September 27, 2021. Mr. Block served as Chief Financial Officer of USBTC until November 30, 2023, and his employment as a non-executive employee of Hut 8 terminated effective January 31, 2024. |
Summary Compensation Table
| (2) The compensation reported for the fiscal year from January 1, 2023 through December 31, 2023 includes the portion of compensation paid or earned during the period from January 1, 2023 through June 30, 2023, which is also included in the amounts reported for the fiscal year from July 1, 2022 through June 30, 2023. For Ms. Leverton, compensation paid by Legacy Hut prior to the closing of the Business Combination has been omitted. |
Summary Compensation Table
| (3) The stock awards and option awards columns reflect the aggregate grant date fair value of the equity awards granted computed in accordance with FASB ASC Topic 718. The assumptions we used in determining the grant date fair value of awards granted in 2023 are described in Note 17 to the consolidated financial statements in our Annual Report. |
Summary Compensation Table
| (4) The salary reported for Ms. Leverton is gross salary pay and was converted from Canadian dollars to U.S. dollars using the average Bank of Canada exchange rate for the respective compensation period included (November 30, 2023 to December 31, 2023). |
Summary Compensation Table
| (5) The salary reported for Mr. Ho includes the annual cash consideration of $250,000 due to Mr. Ho in exchange for his services as Chief Executive Officer of USBTC pursuant to his consulting agreement prior to the closing of the Business Combination in the fiscal years ended June 30, 2022 and June 30, 2023. Mr. Ho’s gross salary pay for the fiscal year ended December 31, 2023 reflects cash compensation of $229,167 in exchange for his services as Chief Executive Officer of USBTC pursuant to his consulting agreement existing prior to the closing of the Business Combination and $42,298, an amount converted from Canadian dollars to U.S. dollars using the average Bank of Canada exchange rate for the respective period, that was earned by Mr. Ho under his employment contract as Chief Strategy Officer of Hut 8 following the closing of the Business Combination (November 30, 2023 to December 31, 2023). |
Summary Compensation Table
Stock awards received by Mr. Ho in the fiscal year ended December 31, 2023 include 704,449 shares of restricted stock granted in January 2023 which were subsequently cancelled in February 2023 upon agreement between Mr. Ho and USBTC and 704,449 shares of common stock issued in November 2023 for the replacement of the previously cancelled shares of restricted stock. The “All Other Compensation” column includes a cash payment of $1,852,790 for personal income taxes associated with the issuance of stock awards during the fiscal year ended June 30, 2022.
Summary Compensation Table
| (6) Mr. Genoot received gross salary pay of $250,000, $259,615, and $265,692 in fiscal years ended June 30, 2022, June 30, 2023, and December 31, 2023, respectively. Amounts reported under the “Option Awards” column include the incremental fair value, computed as of the modification date in accordance with ASC Topic 718, resulting from the modification of Mr. Genoot’s USBTC options equal to $947,551 in the fiscal year ended December 31, 2023, as further described in Note 17 to the consolidated financial statements in our Annual Report. |
Summary Compensation Table
All other compensation received by Mr. Genoot in the fiscal years ended June 30, 2023 and December 31, 2023 includes the payment of $18,588 in January 2023 to cover Mr. Genoot’s Young Presidents’ Organization membership fees for a period of two years. All other compensation received by Mr. Genoot in the fiscal year ended June 30, 2022 includes a cash payment of $1,940,218 for personal income taxes associated with the issuing of stock awards during the fiscal year ended June 30, 2022.
Summary Compensation Table
| (7) Mr. Block received gross salary pay of $145,384, $298,077, and $300,000 in fiscal years ended June 30, 2022, June 30, 2023, and December 31, 2023, respectively. Amounts reported under the “Option Awards” column include the incremental fair values, computed as of the modification dates in accordance with ASC Topic 718, resulting from the modification of Mr. Block’s USBTC options equal to $151,936 and $17,996 in fiscal years ended December 31, 2023 and June 30, 2023, respectively, as further described in Note 17 to the consolidated financial statements in our Annual Report. |
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at December 31, 2023 The following table shows all outstanding stock options and stock awards held by each of our Named Executive Officers as of December 31, 2023.
Outstanding Equity Awards at December 31, 2023
| | Option Awards | | | | Stock Awards | | | | Number of | Number of | | | | | | | Securities | Securities | | | | | | | Underlying | Underlying | | | Number of | Market Value of | | | Unexercised | Unexercised | Option | | Shares or Units | Shares or Units | | | Options | Options | Exercise | | of Stock That | of Stock That | | | (#) | (#) | Price | Option | Have Not Vested | Have Not Vested | | Name | Exercisable | Unexercisable | ($) | Expiration Date | (#) | ($) | | Jaime Leverton, | | | | | | | | Chief Executive Officer(1) | — | — | — | — | 452,664 | 6,038,538 | | Michael Ho, | | | | | | | | Chief Strategy Officer | — | — | — | — | — | — | | Asher Genoot, | | | | | | | | President(2) | — | 704,449 | $0.39 | 01/05/2033 | — | — | | Joel Block, | | | | | | | | Former Chief Financial Officer | 192,245 | — | $0.39 | 11/15/2031 | — | — | | | 99,396 | — | $0.39 | 01/05/2033 | — | — | | | 27,367 | — | $0.39 | 11/15/2031 | — | — |
Outstanding Equity Awards at December 31, 2023
| (1) As of December 31, 2023, Ms. Leverton held 519,331 Legacy Hut 8 restricted stock units settleable in shares of Hut 8 common stock with the year-end value determined based on the closing stock price of $13.34 per share of Hut 8 common stock on the last trading day of 2023. 66,667 of the 519,331 Legacy Hut restricted stock units held by Ms. Leverton were vested but not settleable as of December 31, 2023 and the remaining 452,664 Legacy Hut restricted stock units had not met the vesting conditions as of December 31, 2023. |
Outstanding Equity Awards at December 31, 2023
| (2) Represents USBTC replacement options that vest 25% on January 5, 2024 and the remaining ratably over 36 monthly installments starting February 5, 2024. |
Director Compensation
Director Compensation The following table sets forth information concerning the compensation that we paid or awarded to our non-executive directors from January 1, 2023 through December 31, 2023. Ms. Leverton and Messrs. Ho and Genoot did not receive any additional compensation in connection with their role as Hut 8 directors.
Director Compensation
| | Fees | | | Non-Equity | Nonqualified | | | | | Earned | | | Incentive | Deferred | | | | | or Paid in | Stock | Option | Plan | Compensation | All Other | | | | Cash | Awards | Awards | Compensation | Earnings | Compensation | Total | | Name | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | Joseph Flinn(1) | 44,491 | 106,482 | — | — | — | — | 150,973 | | Alexia Hefti(2) | 44,491 | 106,482 | — | — | — | — | 150,973 | | Jonathan Koch(3) | — | — | — | — | — | — | — | | Stanley O’Neal(4) | — | — | 51,131 | — | — | — | 51,131 | | Carl J. Rickertsen(5) | — | 145,518 | — | — | — | — | 145,518 | | Mayo A. Shattuck III(6) | — | — | 51,131 | — | — | — | 51,131 | | William Tai(7) | 50,916 | 106,482 | — | — | — | — | 157,398 | | Amy Wilkinson(8) | — | — | 51,131 | — | — | — | 51,131 |
Director Compensation
| (1) Fees earned in cash were converted from Canadian dollars to U.S. dollars using the Bank of Canada exchange rate on each of the respective cash payment dates. The amounts under the “Stock Awards” column represent the aggregate grant date fair value of 9,285 Legacy Hut deferred stock units that were granted fully vested to Mr. Flinn during the fiscal year ended December 31, 2023, with such aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For complete FASB ASC Topic 718 disclosures for the awards, see Note 17 to the consolidated financial statements in our Annual Report. As of December 31, 2023, Mr. Flinn holds 28,603 Legacy Hut deferred stock units in vested state that are redeemable after Mr. Flinn ceases being a director of Hut 8 and subject to conditions of the Hut 8 Mining Corp. Omnibus Long-term Incentive Plan. |
Director Compensation
| (2) Fees earned in cash were converted from Canadian dollars to U.S. dollars using the Bank of Canada exchange rate on each of the respective cash payment dates. The amounts under the “Stock Awards” column represent the aggregate grant date fair value of 9,285 Legacy Hut deferred stock units that were granted fully vested to Ms. Hefti during the fiscal year ended December 31, 2023, with such aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For complete FASB ASC Topic 718 disclosures for the awards, see Note 17 to the consolidated financial statements in our Annual Report. As of December 31, 2023, Ms. Hefti holds 17,850 Legacy Hut deferred stock units in vested state that are redeemable after Ms. Hefti ceases being a director of Hut 8 and subject to conditions of the Hut 8 Mining Corp. Omnibus Long-term Incentive Plan. |
Director Compensation
| (3) Mr. Koch ceased serving on the USBTC board of directors on November 30, 2023. As of December 31, 2023, Mr. Koch held 81,935 USBTC replacement Options, which will continue to vest after Mr. Koch’s departure from the USBTC board of directors in accordance with the consulting agreement between Hut 8 and Mr. Koch, dated November 29, 2023. |
Director Compensation
| (4) The amounts under the “option Awards” column represent the aggregate grant date fair value of 163,870 USBTC replacement options granted to Mr. O’Neal during the fiscal year ended December 31, 2023, with such aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For complete valuation assumptions for the awards, see Note 17 to the consolidated financial statements in our Annual Report. As of December 31, 2023, Mr. O’Neal held a total of 245,805 USBTC replacement options. |
Director Compensation
| (5) The amounts under the “Stock Awards” column represent the aggregate grant date fair value of 12,689 Legacy Hut deferred stock units that were granted fully vested to Mr. Rickertsen during the fiscal year ended December 31, 2023, with such aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For complete FASB ASC Topic 718 disclosures for the awards, see Note 17 to the consolidated financial statements in our Annual Report. As of December 31, 2023, Mr. Rickertsen holds 16,748 Legacy Hut deferred stock units that are fully vested and redeemable after Mr. Rickertsen ceases being a director of Hut 8 and subject to conditions of the Hut 8 Mining Corp. Omnibus Long-term Incentive Plan. |
Director Compensation
| (6) The amounts under the “Option Awards” column represent the aggregate grant date fair value of 163,870 USBTC replacement options granted to Mr. Shattuck during the fiscal year ended December 31, 2023, with such aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For complete valuation assumptions for the awards, see Note 17 to the consolidated financial statements in our Annual Report. As of December 31, 2023, Mr. Shattuck held a total of 245,805 USBTC replacement options. |
Director Compensation
| (7) The amounts under the “Stock Awards” column represent the aggregate grant date fair value of 9,285 Legacy Hut deferred stock units that were granted fully vested to Mr. Tai during the fiscal year ended December 31, 2023, with such aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For complete FASB ASC Topic 718 disclosures for the awards, see Note 17 to the consolidated financial statements in our Annual Report. As of December 31, 2023, Mr. Tai held a total of 28,603 Legacy Hut deferred stock units that are fully vested and redeemable after Mr. Tai ceases being a director of Hut 8 and subject to conditions of the Hut 8 Mining Corp. Omnibus Long-term Incentive Plan. |
Director Compensation
| (8) The amounts under the “option Awards” column represent the aggregate grant date fair value of 163,870 USBTC replacement options granted to Ms. Wilkinson during the fiscal year ended December 31, 2023, with such aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For complete valuation assumptions for the awards, see Note 17 to the consolidated financial statements in our Annual Report. As of December 31, 2023, Ms. Wilkinson held a total of 245,805 USBTC replacement options. |