Adam Sullivan
About Adam Sullivan
Adam Sullivan, age 33, is President (since May 15, 2023) and Chief Executive Officer (since August 2, 2023) of Core Scientific, and has served on the Board since January 23, 2024; he holds a B.A. in Financial Economics from the University of Rochester . Under his leadership, Core Scientific emerged from Chapter 11 in January 2024 and pivoted toward high‑performance computing (HPC) hosting, securing ~500 MW contracts with $8.7B potential revenue over 12 years . 2024 Pay‑Versus‑Performance shows strong stock performance with a TSR index value of 408.43 for the year, well above the Nasdaq Composite peer index (124.73) . The company emphasized stock price, cash growth/debt reduction, operating cash flow, and hashrate utilization as performance metrics in 2024 compensation plans .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| XMS Capital Partners | Managing Director; Head of Digital Assets & Infrastructure | 2017–2023 | Oversaw >$5B of transactions; represented PDIA Corp. in its acquisition of Core Scientific Holding (Legacy Core) in 2021 |
Fixed Compensation
| Component | 2024 Value | Notes |
|---|---|---|
| Base Salary | $625,000 | Increased from $500,000 under June 14, 2024 employment agreement |
| Target Annual Bonus % | 125% of base salary (target $781,250) | Administered under 2024 Bonus Plan |
| Actual Annual Bonus Paid (2024 performance, paid Jan 2025) | $1,800,000 (230% of target) | Above plan “maximum” guidance; Compensation Committee exercised discretion |
| Other Cash/Benefits | $80,000 legal fee reimbursement | Per employment agreement |
Performance Compensation
Annual Cash Bonus Metrics (2024)
| Metric | Weighting | Threshold | Target | Maximum | Actual Achievement | Payout Impact |
|---|---|---|---|---|---|---|
| Cash increase / Debt reduction | 20% | Cash +$125M or debt −$50M | Cash +$150M or debt −$75M | Cash +$200M or debt −$100M | Committee determined 4 metrics at maximum and 1 above target; overall >175% achievement | CEO payout 230% of target |
| Operating Cash Flow | 20% | $100M | $125M | $150M | See above | See above |
| Ideal Hashrate Utilization | 20% | 95% | 97% | 98% | See above | See above |
| Compliance (material weakness progress, SOC2, SOX) | 20% | Discretionary | Discretionary | Discretionary | See above | See above |
| Strategic Objectives | 20% | Discretionary | Discretionary | Discretionary | See above | See above |
Equity Awards Granted in 2024 (RSUs/PSUs)
| Award Type | Grant Date | Units | Vesting Schedule | Notes |
|---|---|---|---|---|
| Emergence RSUs | 6/14/2024 | 2,867,521 | 25% on 1/23/2025; 25% on each of next three anniversaries (continuous service required) | One‑time award; grant‑date fair value $10.33/share |
| Annual RSUs | 6/14/2024 | 716,881 | 1/3 on 1/23/2025; remaining vests quarterly (1/12 per quarter) through 12/31/2026 | Grant‑date fair value $10.33/share |
| Annual PSUs | 6/14/2024 | 238,961 target | Three annual measurement periods (2024–2026); earned vs stock‑price hurdles with continuous service | Price hurdles: $3.14 (50%), $5 (100%), $8 (150%), $10 (200%), $12 (250%), $14 (300%) based on 20‑day average |
| PSUs Earned (2024) | 12/31/2024 | 238,961 earned and settled in Jan 2025 | Earned 300% of the 2024 measurement period tranche; vested on 12/31/2024 | Continuous service through year‑end required |
Equity Ownership & Alignment
| Ownership Item | Amount | Notes |
|---|---|---|
| Common Shares Owned | 970,923 | |
| Tranche 1 Warrants (exercise $6.81) | 114,364 | |
| Shares Issuable within 60 days (primarily RSUs) | 119,480 | |
| Total Beneficial Ownership (SEC definition) | 1,204,797 (<1%) | |
| Unvested RSUs (Emergence) | 2,867,521, MV $40,288,670 as of 12/31/2024 | |
| Unvested RSUs (Annual) | 716,881, MV $10,072,178 as of 12/31/2024 | |
| Unvested PSUs (at year‑end) | 159,308, MV $2,238,277 as of 12/31/2024 | |
| Hedging/Pledging Policy | Hedging, short selling, margin purchases, and pledging prohibited for directors/officers/employees |
- Insider selling pressure: Significant scheduled RSU vesting (25% on 1/23/2025 and annual anniversaries; quarterly vesting through 2026) could create supply around vest dates; PSUs are tied to sustained stock price hurdles, reinforcing alignment with TSR .
- Ownership guidelines: Not disclosed in the proxy; hedging/pledging prohibited reduces misalignment risk .
Employment Terms
| Term | Details |
|---|---|
| Agreement Date | June 14, 2024 (Sullivan Employment Agreement) |
| Initial Term; Auto‑Renewal | 3‑year initial term; automatic one‑year renewals unless notice given |
| Severance (without cause / good reason, outside change‑in‑control protection period) | 18 months base salary ($937,500); prior year unpaid bonus if any; pro‑rata current year bonus eligibility; up to 18 months COBRA reimbursement (~$19,238 est.); accelerated vesting per award terms (estimated total $58,813,668 at 12/31/2024) |
| Change‑in‑Control (double trigger within protection period) | Lump sum 2×(base+target bonus) ($1,250,000); prior year unpaid bonus if any; pro‑rata current year bonus eligibility; up to 18 months COBRA reimbursement; accelerated vesting (estimated $59,126,168 at 12/31/2024) |
| 280G Treatment | Best‑net approach (cutback if economically beneficial); no excise tax gross‑ups |
| Clawback | Recoupment policy compliant with SEC/Nasdaq (Rule 10D‑1; Nasdaq 5608) for erroneously awarded incentive comp including equity |
| Confidentiality/Restrictive Covenants | Confidentiality in perpetuity; 12‑month non‑compete and non‑solicit post‑termination |
| Indemnification | Standard director/officer indemnification agreements |
Board Governance and Director Service
- Board service: Class 1 director since January 23, 2024; nominated for re‑election (declassification proposal would move all directors to one‑year terms beginning 2026) .
- Committee roles: None; Adam Sullivan is not listed as a member of Audit, Compensation, or Nominating & Corporate Governance committees .
- Leadership structure: Separate CEO and independent Chair (Jarrod Patten); Board affirms independence of all non‑employee directors .
- Meetings/attendance: Board held 13 meetings in 2024; each director attended >75% of meetings and committee sessions; executive sessions used regularly by Compensation Committee .
- Independence status: Non‑employee directors deemed independent under Nasdaq; separation of roles mitigates CEO+Chair dual‑role concerns .
Director Compensation (as it relates to Adam Sullivan)
Adam Sullivan, as CEO, is not a non‑employee director and does not receive director retainer/fees shown for non‑employee directors; non‑employee director compensation schedules are provided separately in the proxy (not applicable to Sullivan) .
Compensation Committee, Peer Group, and Governance
- Compensation Committee: Independent directors (Chair Yadin Rozov, members Jeff Booth and Eric Weiss) with authority over executive pay; meets regularly and uses independent consultant (Compensia) .
- Philosophy: Emphasis on “pay‑for‑performance”, significant equity and variable compensation; no formal benchmarking targets or fixed cash/equity mix percentages .
- Peer Groups:
- 2024 peer set included crypto miners, fintech, software/hardware and tech infrastructure companies (e.g., Bitfarms, Marathon Digital, CleanSpark, Riot, Box, MarketAxess, MicroStrategy, Okta, VeriSign, etc.) .
- 2025 peer set adjusted for HPC hosting transformation (e.g., Box, Robinhood, Manhattan Associates, CleanSpark, SolarWinds, Okta, DigitalOcean, Elastic, Informatica, Intapp, Riot, Rambus, Altair, Zeta, etc.) .
- Policies: No option repricing without shareholder approval; limited perquisites; no income or excise tax gross‑ups; insider trading policy prohibits hedging/pledging .
Related Party Transactions and Risk Indicators
- Related party transactions: None since Jan 1, 2024; policy requires Audit Committee approval for any such transactions .
- Legal proceedings: No adverse proceedings involving directors reported; Section 16 compliance generally timely (one late filing for another officer) .
- Prior restructuring: Company emerged from Chapter 11 on January 23, 2024; CEO led strategic pivot to HPC hosting with long‑term contracts .
- Hedging/pledging: Prohibited, reducing alignment risks .
- Equity plan oversight: 2024 Stock Plan and proposed Restated Plan add governance protections (no single‑trigger acceleration if awards are assumed, minimum vesting, no liberal share recycling) .
Investment Implications
- Strong equity alignment but supply risk: Large RSU grants and quarterly vesting through 2026 create potential selling pressure around vest dates; PSUs require sustained stock‑price performance, reinforcing TSR alignment .
- Pay‑for‑performance with discretion: 2024 bonus metrics were aggressive and achieved at/near maximum; CEO payout of 230% of target indicates Committee discretion, which can signal confidence but raises governance scrutiny .
- Retention secured via double‑trigger CoC and severance: Robust severance and CoC protections (2× base+target; accelerated vesting) mitigate retention risk in strategic transition, without tax gross‑ups .
- Strategy and revenue visibility: $8.7B potential HPC hosting revenue over 12 years and 1,300 MW controlled capacity underpin long‑term cash flow visibility; execution risk remains in deploying 500 MW and diversifying the HPC customer base .
- Governance quality: Independent chair, independent committees, clawback policy, and declassification/supermajority removal proposals suggest improving shareholder‑friendly governance post‑emergence .
Notes: This analysis is based on Core Scientific’s 2025 DEF 14A and related disclosures.