Riot Executives Shoot for $200 Million in Restricted Stock Rewards

Restricted shares issued under Riot's Long-term Incentive Program

Senior executives of Texas bitcoin mining company Riot Platforms are taking a long shot at vesting as many as 13.3 million restricted shares for themselves if things go as planned by 2026.

According to Form-4 filings submitted on Friday, members of Riot’s senior management have acquired a total of 6.65 million restricted shares as a target performance award, which can be vested up to 200% of the acquired amount. At Riot’s closing price of $15 per share on Friday, those shares have a max nominal market value of nearly $200 million.

The restricted stocks were issued as part of Riot’s new Long-Term Incentive Program (LTIP) rolled out in July 2023, which offers an interesting look into how one of the largest public bitcoin mining companies encourages employee retention by pegging it to its stock price performance.

Riot’s LTIP includes a service award and a performance award for eligible employees, which vest in three years from a grant date based on certain criteria.

The service award vests in three tranches at the first, second, and third anniversary of the grant date based on continuous employment while the performance award has a vesting range between 0% and 200%, depending on Riot’s stock price return relative to the Russell 3000 Index.

For instance, if Riot’s stock returns in three years outperform the Russell 3000 Index by 25% or more, the performance award can vest at 200% of the target award, as the screenshot from Riot’s July filing illustrates.

Five of the six aforementioned senior executives were initially granted the awards in July, which comprised 635,996 units of service-based restricted shares and 1.27 million restricted shares based on maximum vesting.

During Q3, Riot granted employees in total of 1.9 million restricted stocks for maximum performance awards and 0.9 million restricted stocks for service awards.

Notably, the max performance awards granted to the top executives have increased 10 times since July to 13.3 million restricted shares as of Friday.

So far, the Russell 3000 Index has a return of 4% between July 13, 2023, when the LTIP was first granted to the executives, and last Friday. Over the same period, Riot’s stock price went down by 26% from $20.29 to $15.