Monitor the say-on-pay vote outcome on November 4, 2026 — a repeat of sub-70% approval would signal persistent investor discontent despite governance changes. The SC 13D/A activist filing adds pressure; watch for any dissident director nominations or shareholder proposals ahead of the meeting. The FY2027 formulaic bonus program tied to Adjusted Cash EBITDA will be a key test of pay-for-performance alignment.
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Executive Summary
Applied Digital Corp. filed its definitive proxy statement for the 2026 Annual Meeting, seeking election of six director nominees, ratification of CBIZ CPAs P.C. as auditor, and an advisory vote on executive compensation. The filing details massive CEO pay of $189.2M in total reported compensation for FY2026, driven by $185.9M in stock awards, including multi-year RSUs and PSUs with a 25/75 ratio and five-year vesting/performance periods tied to stock price hurdles ($50/$75/$100). The prior year's say-on-pay received only 52.6% support, prompting the company to adopt formulaic annual bonus program and stock ownership guidelines. A related SC 13D/A filed 79 days prior signals potential activist interest ahead of the meeting.
Key Facts
- CEO Wes Cummins total reported compensation for FY2026: $189,217,520, including $185,900,249 in stock awards (RSUs and PSUs).
- Prior year say-on-pay approval rate was only 52.6%, well below the 70% threshold for investor discontent.
- In response, the company adopted a formulaic annual bonus program for FY2027 based on Adjusted Cash EBITDA goals and stock ownership guidelines (CEO: 6x salary, other NEOs: 3x).
- Multi-year equity awards granted to CEO, President, and CFO with 25/75 RSU-to-PSU ratio and five-year vesting/performance periods.
- CEO PSUs tied to stock price hurdles of $50, $75, and $100 over five years; President PSUs tied to contracted revenue and RFS milestones; CFO PSUs tied to NOI targets of $1B and $2B.
- Market cap grew from ~$1.37B to ~$13.61B during FY2026; total contracted revenue reached ~$36B across 1.41GW of critical IT load.
- Net loss for FY2026 was $250.3 million; Adjusted EBITDA was $107.2 million.
- SC 13D/A filed July 9, 2026 (79 days prior) indicates potential activist stake and possible proxy fight.
- All six director nominees are incumbents; five of six are independent; two of six are female.
- Related party transactions disclosed: ~$59.2M promissory note to Base Electron (10% owned, CEO/President serve as officers), $7M drawn on $100M grid note to ChronoScale (96% owned), and $3.3M in compensation to family members of CEO.
Financial Impact
CEO total compensation $189.2M (FY2026); net loss $250.3M; Adjusted EBITDA $107.2M; market cap increased ~10x to $13.61B
Risk Factors
- Continued low say-on-pay support could trigger further activist engagement or proxy fight given the SC 13D/A filing.
- Massive equity awards (CEO alone has 6.1M unvested PSUs + 1.5M unvested RSUs) create significant dilution overhang.
- Related party transactions with Base Electron ($59.2M note) and ChronoScale ($7M drawn) raise governance concerns.
- Net loss of $250.3M despite revenue growth highlights negative GAAP profitability.
Investment Themes
Documents Analyzed
This report is based on 4 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| DEF 14A Filing (Primary) | 0001493152-26-044325 |
| Document: 0001493152-26-044325-index-headers.html | 0001493152-26-044325 |
| Document: 0001493152-26-044325-index.html | 0001493152-26-044325 |
| Document: 0001493152-26-044325.txt | 0001493152-26-044325 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 19, 2026 8d ago | Insider Cluster | $19.25 $17.83 | ▼ −7.38% | ▼ −7.23% | $19.51 (+1.35%) |
Oct 13, 2026 14d ago | 144 | $20.33 $20.98 | ▲ +3.22% | ▲ +2.77% | $19.51 (−4.01%) |
Oct 7, 2026 20d ago | 8-K | $23.85 $20.39 | ▲ +14.51% | ▲ +14.23% | $19.51 (+18.20%) |
Sep 28, 2026 29d ago | Press Release | $25.41 $25.34 | ▼ −0.28% | ▼ −2.22% | $19.51 (−23.22%) |
Sep 25, 2026 4w ago | DEFA14A | $24.53 $24.70 | ▲ +0.69% | ▼ −0.51% | $19.51 (−20.46%) |
Sep 25, 2026 4w ago | DEF 14A | $24.53 $24.70 | ▲ +0.69% | ▼ −0.51% | $19.51 (−20.46%) |
Jul 27, 2026 13w ago | 8-K | $26.62 $29.49 | ▲ +10.78% | ▲ +8.51% | $19.51 (−26.71%) |
Jun 26, 2026 17w ago | 8-K | $37.77 $33.50 | ▼ −11.31% | ▼ −12.69% | $19.51 (−48.35%) |
Jun 16, 2026 19w ago | 8-K | $45.57 $41.98 | ▼ −7.88% | ▼ −6.84% | $19.51 (−57.19%) |
Jun 12, 2026 19w ago | Institutional Cluster | $42.70 $46.59 | ▲ +9.11% | ▲ +8.44% | $19.51 (−54.31%) |
US Market Status
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