Michael Toporek

About Michael Toporek

Michael Toporek (age 60) is Executive Chairman of Soluna Holdings, Inc. (SLNH) and has served on the Board since 2016; he was CEO from October 2020 until May 1, 2023, when he transitioned to Executive Chairman . He holds a B.A. in Economics and an MBA (Finance/Accounting) from the University of Chicago . During 2022–2024, Soluna’s pay-versus-performance disclosure shows net losses of $(99.1)mm, $(27.7)mm, and $(58.3)mm, respectively, and TSR (value of a fixed $100 investment) of $228 (2022), $62 (2023), and $53 (2024), highlighting pressure on shareholder returns during this period .

Past Roles

External Roles

Fixed Compensation

Key Employment Agreement Terms:

• Original CEO contract (effective Jan 14, 2022): Base salary $300,000; annual performance bonus; one-time 500,000 stock options at $6.84 (three-year vest); severance (without cause/good reason): 12 months health coverage + one year base salary + target bonus, lump sum .
• Amended upon move to Executive Chairman (effective May 1, 2023): Agreement expires May 1, 2028; severance multiple increased from one year to three years (without cause/good reason) .

Performance Compensation

Change of Control & Vesting:

• Master Restricted Stock Agreements provide automatic full vesting upon change of control, subject to Sections 280G/4999 of the Internal Revenue Code .
• General Restricted Stock Agreements allow the Compensation Committee discretion to accelerate vesting upon change of control .
• Beneficial ownership footnotes indicate Toporek’s sizable restricted stock awards will vest 100% upon separation from the Company, a critical retention/separation lever (see ownership section) .

2024 Total Equity Granted (Fair Value):

• Stock awards to Toporek totaled $6,727,285 in 2024; total compensation $7,054,885 .

Equity Ownership & Alignment

Alignment Policies:

• Hedging prohibited for directors, officers, employees under insider trading policy .
• No executive equity ownership guidelines disclosed; company notes no ownership guidelines are imposed .
• No pledging disclosures for Toporek identified in proxies .

Insider Activity:

• Administrative error resulted in late Form 4 filings by Mr. Toporek for share dispositions: 8,000 (Oct 31, 2024), 31,300 (Nov 1, 2024), and 20,600 (Nov 4, 2024) .

Employment Terms

Board Governance

• Board Service: Executive Chairman; member of the Executive Committee along with Phelan (Chair), Bottomley, and Lipman .
• Committees & Independence: Toporek is not an independent director under Nasdaq rules . Audit, Compensation, and Nominating committees consist solely of independent directors .
• Attendance: The Board met 26 times in 2024; each director attended ≥75% of Board and applicable committee meetings .
• Director Compensation: Non-employee directors receive cash retainers ($20k base; additional $15k for Audit/Comp Chair; $10k Lead Independent; $15k Executive Committee). Directors who are employees (e.g., Toporek) are not compensated for Board service .

Related Party Transactions

• HEL (Harmattan Energy Limited) affiliations: Toporek owns 90% of Soluna Technologies Investment I, LLC (57.9% of HEL) and 100% of MJT Park Investors, Inc. (3.1% of HEL) and has dispositive power over Tera Joule, LLC (9.2% of HEL) via Brookstone IAC . The Company’s 2025 proxy reiterates these relationships and notes transactions were reviewed by an independent investment committee and approved by the full Board .
• Company investment in HEL was fully impaired to $0 in 2022 .

Compensation Structure Analysis

• Year-over-Year Mix: 2024 shows a heavy tilt toward equity with $6.73mm stock awards and modest base salary, driving total compensation of $7.05mm .
• Shift to RSAs: Awards in 2024 were primarily RSAs (common and preferred), which generally carry lower performance risk than options and feature potential change-of-control/separation vesting .
• Guaranteed vs At-Risk: Severance economics (three-year multiple) and separation-trigger vesting of large RSAs increase guaranteed outcomes and can reduce sensitivity to performance .
• Clawback: Adopted November 2023, applying to incentive awards upon financial restatement for the prior three fiscal years; no clawbacks reported for 2023 .

Performance & Track Record

Qualitative Highlights:

• Ongoing efforts include financing arrangements (e.g., SEPA with YA II PN, ATM capability) and capital projects (Dorothy 2, Project Kati) per company disclosures, with repeated reverse split and authorized share increase proposals reflecting share price/listing pressures .

Director Compensation (Toporek-specific)

• As an employee-director, Toporek receives no cash director fees; compensation is through his executive role and equity awards .

Risk Indicators & Red Flags

• Separation-triggered vesting for very large RSAs creates potential incentives around executive turnover and limits true performance conditioning .
• High severance multiple (3x salary+target bonus) increases change-of-control/separation costs .
• Related party ties to HEL and Brookstone require continued robust conflict oversight .
• Dilution risk evident in ownership percentage decline (12.3% → 10.1% → 4.6%) amid significant share issuance and corporate actions .
• Late Section 16 filings for insider dispositions in Oct–Nov 2024 require improved compliance controls .

Say-on-Pay & Shareholder Feedback

• Non-binding advisory vote proposals are included in prior proxies; specific approval percentages not disclosed in these documents (N/D) .

Compensation Committee Analysis

• Compensation Committee composed solely of independent directors; administers executive compensation, equity plans, and succession planning .

Investment Implications

• Alignment: Hedging prohibitions and sizable personal holdings support alignment; however, separation-triggered vesting for ~1.9–2.9mm RSAs materially reduces pay-for-performance and creates departure optionality .
• Overhang & Dilution: Significant equity plan capacity and repeated corporate actions (reverse splits, authorized share increases) imply ongoing dilution risk, compressing ownership and weighing on TSR .
• Event Risk Economics: Three-year severance multiple and change-of-control vesting elevate transaction costs and may deter strategic alternatives or complicate capital structure repositioning .
• Trading Signals: Insider sale activity in late 2024 and persistent net losses alongside TSR declines indicate caution until evidence of sustainable profitability and de-leveraging; monitor governance safeguards on related party dealings with HEL/Brookstone .

Notes:

• All quantitative values above are drawn directly from SLNH’s DEF 14A filings and related SEC documents.
• Where specific data are not disclosed (N/D), items are omitted per the instruction to skip undisclosed items.

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