Milton C. Ault, III
About Milton C. Ault, III
- Executive Chairman of Hyperscale Data, Inc. (ticker: GPUS) since January 2021; previously CEO from December 2017 to January 2021; first appointed Executive Chairman in March 2017. Age 55. Director/officer since 2017 .
- 2022–2024 pay-versus-performance shows weak shareholder value creation: total shareholder return (TSR) index fell to 0.00 in 2024 (from 10.08 in 2022), alongside continuing net losses and variable revenues, indicating pay outcomes largely driven by cash/benefits rather than equity appreciation in recent years .
- Oversees capital structure actions (special meeting proposals to reverse split, increase authorized shares) and affiliate financings with Ault & Company, Inc. (A&C), including Series H preferred (9.5% cumulative dividend) that carries board-seat rights and protective provisions, signaling control/related-party complexity .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Hyperscale Data (GPUS) | Executive Chairman | Jan 2021–present | Oversight of capital raises (ATM, preferred stock), special meeting proposals (reverse split/authorized shares); affiliate financings to support equity compliance and expansion . |
| Hyperscale Data (GPUS) | Chief Executive Officer | Dec 2017–Jan 2021 | Led company through transition; subsequently moved to Executive Chairman . |
| Hyperscale Data (GPUS) | Executive Chairman | Mar 2017–Dec 2017 | Initial board leadership; set up subsequent management journey . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Ault & Company, Inc. (A&C) | Chairman & CEO | Dec 2015–present | GPUS affiliate/financier across Series C/G/H; significant voting power and board-seat rights via preferreds . |
| MCKEA Holdings, LLC | VP, Business Development | Jan 2011–present | Family office experience . |
| Alzamend Neuro, Inc. (Nasdaq) | Director | Since Jan 2024 | Founder; prior Chairman to IPO; now director . |
| Universal Safety Products, Inc. (NYSE American) | Director | Since May 2025 | Public board service . |
| RiskOn International, Inc. (OTCPK) | Chairman & CEO | Since Jan 2024 | Parallel operating role . |
| Ault Disruptive Technologies Corp. (NYSE American) | Chairman | Feb 2021–Oct 2024 | SPAC leadership . |
| Algorhythm Holdings, Inc. (Nasdaq) | Executive Chairman | Apr 2023–Sep 2024 | Public board role . |
| Avalanche International Corp. | Chairman | Since Sep 2014 | Public/voluntary filer . |
Fixed Compensation
| Metric (USD) | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Base Salary | $400,000 | $400,000 | $400,000 | $400,000 |
| Cash Bonus | $821,667 | $1,716,667 | $16,667 | $16,667 |
| Stock Awards (Grant-date FV) | $1,632,000 | – | – | – |
| Option Awards (Grant-date FV) | $1,301,440 | – | – | – |
| All Other Compensation | $39,918 | $47,310 | $325,773 | $126,950 |
| Total Compensation | $4,195,025 | $2,163,976 | $742,440 | $543,617 |
All other compensation detail:
- 2023: 401(k) $16,500; auto $12,000; personal aircraft $262,134; medical/life $23,179; travel/entertainment $11,960; total $325,773 .
- 2024: 401(k) $9,442; auto $12,000; personal aircraft $78,324; medical/life $27,184; total $126,950 .
Performance Compensation
| Component | Metric | Target/Threshold | Payout Formula | Vesting/Timing |
|---|---|---|---|---|
| CEO Performance Award (equity) | Revenue growth; Net income; Market cap appreciation | Revenue ≥ prior year (with 35% “Revenue Percentage” threshold); Positive net income (5% “Net Income Percentage” threshold) | Shares with max value = 10% of appreciation in Company market capitalization above High Water Mark, multiplied by Revenue% × Net Income% (with cumulative catch-up on revenue/net income targets) | Annual measurement per fiscal year during contract term |
Notes:
- 2022–2024 Pay vs Performance: TSR and net income trends underscore high performance risk. TSR index fell from 10.08 (2022) to 0.03 (2023) to 0.00 (2024); net income was $(182.2)m (2022), $(232.4)m (2023), $(61.5)m (2024); revenue $104.1m (2022), $134.8m (2023), $106.7m (2024) .
Equity Ownership & Alignment
- Beneficial ownership (Ault & affiliates):
- Ault & Company, Inc. (A&C): 19,249 Class A; 14,679,024 Class B (10 votes per share); convertible into 154,320,991 Class A via 50,000 Series C; 2,962,963 Class A via 960 Series G; 5,068,221 Class A via 960 Series H; 639,052 Class A via warrants .
- Milton C. Ault, III (personal): 19,250 Class A; 1,664 Class B .
- Outstanding equity awards at FY 2023: options deeply out-of-the-money (27 options @ $13,425; 53 options @ $19,125), implying negligible near-term exercise pressure .
- 2025 proposed option grant (subject to stockholder/NYSE approval and 2025 Plan): Ault to receive 2,000,000 options, $0.72 strike, 10-year term; 50% vests at stockholder approval, 50% vests monthly starting Jan 1, 2026 .
- Policies: No formal stock ownership guidelines; insider trading policy allows 10b5-1 plans; the company has not adopted any hedging policies (i.e., hedging is not prohibited) .
- Section 16 compliance: Ault filed three late Forms 4 in 2024 .
Employment Terms
| Term | Key provisions |
|---|---|
| Agreement | 10-year executive employment agreement dated June 17, 2018 (entered as CEO; now Executive Chairman) . |
| Base salary | $400,000 per annum . |
| Annual bonus | Eligible per Compensation Committee goals . |
| CEO Performance Award | Up to 10% of market cap appreciation (subject to revenue and net income thresholds); see Performance Compensation . |
| Severance (non-CIC) | Four weeks of base salary per full year of service (credit from 9/22/2016) plus lump-sum base salary for up to 12 months or remainder of term (cap 2 years), continuation of benefits during separation period, pro rata max bonus for service year, and full acceleration of equity with a 24-month exercise window (on timely release) . |
| Change in Control | Payment equal to the greater of 5× then-current base salary or the above Separation Payment amount, regardless of continued employment . |
Board Governance
- Role: Executive Chairman (not independent). Lead Independent Director: Robert O. Smith .
- Independence: Board determined Smith, Bentz, Rosenberg are independent; Ault, Horne, Nisser are not independent .
- Committees (independent directors):
- Audit (Chair: Smith; members: Smith, Bentz, Rosenberg; Smith is audit committee financial expert) .
- Compensation (Chair: Bentz; members: Bentz, Smith, Rosenberg) .
- Nominating & Gov (Chair: Rosenberg; members: Rosenberg, Smith, Bentz) .
- 2024 Board activity: 9 Board meetings; Audit 4 meetings; Nom/Gov 0; Compensation 0; written consents as disclosed .
- Director compensation (2024): Independent director base $45,000; Lead Independent $55,000 .
Director & Executive Equity Issuances (Proposed – 2025)
- Options to insiders (subject to stockholder/NYSE approval; 2025 Plan):
- Ault & Horne: 2,000,000 options each @ $0.72, 10-year term (50% vests at approval; 50% monthly from 1/1/2026).
- Nisser: 1,500,000 options @ $0.72, same vesting.
- CFO Cragun: 1,000,000 options @ $0.72, same vesting.
- Independent directors: 250,000 options each @ $0.72, same vesting .
Related-Party Transactions & Structural Risks
- Preferred financings with A&C (affiliate chaired by Ault) with protective provisions and board-seat rights:
- Series C (up to $75m): conversion ≥$0.10 floor; voting floor price $107.625; A&C right to maintain ownership in financings; no financing below conversion price; warrants issued; A&C debt guarantees include Company-prompted segregated cash accounts with prescribed funding schedule .
- Series G (up to $25m): conversion ≥$0.10 floor; voting floor $6.244; similar protective provisions and warrants .
- Series H (up to $100m cash): 9.5% cumulative dividends; conversion ≥$0.10 floor; voting floor $0.72; reserves 12.5% of proceeds; A&C right to maintain ownership; board-seat rights proportionate to conversion shares; change-of-control/Rule 713 triggers; dilution scenarios summarized in proxy .
- Voting/control: A&C holds substantial Class B voting stock and preferreds; Class B carries 10 votes per share. Voting rights for preferreds limited by “voting floor prices” for NYSE rules .
- Company guaranteed A&C debts with structured restricted cash funding (Segregated Account), adding potential claims on corporate cash flows .
Pay vs Performance (selected metrics)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| TSR (Value of initial $100) | 10.08 | 0.03 | 0.00 |
| Net Income ($) | (182,209,000) | (232,402,000) | (61,481,000) |
| Total Revenue ($) | 104,079,000 | 134,846,000 | 106,662,000 |
Risk Indicators & Red Flags
- No hedging policy adopted; hedging not explicitly prohibited .
- No formal stock ownership guidelines for executives/directors .
- Large, immediate-vesting insider option awards contingent on approval could create near-term selling/overhang if in-the-money; exercise price $0.72 .
- Extensive related-party financing with A&C (protective covenants, board seats, participation rights) and company guarantees of A&C debt, creating potential conflicts and cash constraints .
- Structural dilution risk from reverse split, authorized share increase, and preferred conversions (Series H up to 100,000 shares; dilution tables provided) .
- Section 16: late Forms 4 for Ault in 2024 .
Equity & Awards (Selected Outstanding Awards at FY-end)
| Name | Exercisable Options (#) | Unexercisable (#) | Exercise Price ($) | Expiry |
|---|---|---|---|---|
| Milton C. Ault, III (Dec 31, 2023) | 27 | – | 13,425.00 | 9/17/2030 |
| 53 | – | 19,125.00 | 4/26/2031 |
Say-on-Pay & Compensation Committee
- Say-on-Pay: triennial cadence; most recent proposal in 2025 recommending approval; prior stockholders approved in 2022 .
- Compensation Committee: independent (Chair: Bentz; members: Smith, Rosenberg); responsible for executive pay, equity plans .
Investment Implications
- Alignment and control: Ault’s dual role (Executive Chairman + principal of affiliate financier A&C) and A&C’s significant voting/conversion rights concentrate control and create related-party governance risk; independent committees and a lead independent director help mitigate but do not eliminate conflicts .
- Pay-for-performance: 2022–2024 TSR collapse and persistent losses contrast with recurring cash pay and significant perks (notably aircraft usage in 2023), though total compensation declined meaningfully in 2023–2024; the CEO Performance Award ties equity to market cap appreciation plus revenue/net income thresholds, but realization depends on multi-factor turnaround .
- Dilution/overhang: Proposed reverse split, authorized share increase, and affiliate preferred structures (9.5% cumulative dividends, board-seat rights, anti-dilution guardrails) raise future dilution and cash/dividend burdens; 2025 insider option grants (immediate 50% vesting at approval) create additional supply risk if shares appreciate above $0.72 .
- Liquidity and financing: Reserves/segregated accounts and protective covenants tied to A&C financings may constrain flexibility; however, regained NYSE American equity compliance (via capital raises) indicates active capital markets access under current leadership .
Overall: Governance and financing are tightly coupled to Ault & Company under Ault’s leadership, offering capital access but elevating related-party and dilution risks; pay structures include a performance equity formula, yet recent TSR and losses highlight execution risk and the importance of disciplined capital deployment to align compensation with shareholder outcomes .