Filing Overview
D-Wave Quantum Inc. filed a Form 8-K under Item 5.02 regarding executive compensation and equity awards. The relevant actions occurred on October 27, 2022; the report was signed on November 2, 2022. The filing does not provide quarterly or annual operating results.
Key Compensation and Equity Actions
| Recipient | Action | Terms |
|---|---|---|
| Alan Baratz, President and CEO | Salary increase and bonus eligibility | Annual base salary increased to $575,000, effective September 1, 2022. Target bonus under the 2022 Bonus Plan is 100% of base salary, subject to corporate and personal objectives. |
| Alan Baratz | One-time RSU grant | 2,500,000 RSUs. One tranche of 1,500,000 units vests 50% after one year and 25% after each of the next two years; the remaining 1,000,000 units vest 50% after each of the first and second anniversaries, subject to continued service. |
| John M. Markovich, CFO | Salary increase and RSU grant | Annual base salary increased to $400,000. Granted 875,000 RSUs vesting 50% after one year and 25% after each of the next two years, subject to continued service. |
| Independent directors | RSU grants | Aggregate grant of 167,605 RSUs, vesting upon the company’s first annual meeting of stockholders in 2023, subject to continued service. |
Termination Provisions
For a termination without cause, the amended CEO employment agreement provides for twelve months of base salary, payable as a lump sum, salary continuation, or a combination, plus a lump-sum target bonus equal to 100% of base salary, subject to specified conditions. Other employment agreement terms remain unchanged except as disclosed.
Financial Metrics and Liquidity
- Revenue, profit or loss, cash flow, margins, debt, cash balances, liquidity, and other operating metrics are not reported in this filing.
- The filing does not provide a clear fair value or expense amount for the RSU awards.
- The awards could increase future share-based compensation expense and, upon vesting and settlement, dilute existing stockholders.
Investor Considerations
- The compensation changes were approved by the Board following a Compensation Committee recommendation and were described as recognition of the CEO’s contributions, including taking the company public, and as incentives for future performance.
- The CEO’s potential target annual cash compensation consists of $575,000 of base salary plus a target bonus of approximately $575,000, before considering equity awards or other compensation.
- The filing does not include company performance guidance, financial outlook, or management commentary on operations.
- Most awards are subject to continued service, creating retention incentives but also future compensation obligations.
- Investors should review the complete employment-agreement amendment and RSU agreements, including redacted provisions and the detailed termination conditions.
Facts to Verify
- Confirm the final terms and valuation of the 2,500,000 CEO RSUs, 875,000 CFO RSUs, and 167,605 director RSUs.
- Assess the potential share dilution and future stock-based compensation expense under the 2022 Equity Incentive Plan.
- Review subsequent filings for actual vesting, forfeitures, compensation expense, and any changes to executive arrangements.
- Consult the company’s financial statements and other filings for revenue, losses, cash resources, debt, liquidity, and operating outlook, which are absent from this 8-K.