What is the Total Compensation at Coinbase and Other Crypto Firms?
The price of bitcoin has dropped more than 20% since the start of the year, but it is not all bad news.
The recent crash in the value of bitcoin and other cryptocurrencies has not yet affected the rich total compensation packages offered by cryptocurrency firms, according to an analysis by the professional social network Blind.
Software engineers and technologists have reported job offers as high as $900,000 a year from the cryptocurrency exchange Coinbase on Blind, as recently as Jan. 25, 2022.
The nearly $1-million pay package for the senior “staff” software engineer includes stock-based compensation of $450,000 a year, plus an undisclosed cash bonus. Cash bonuses at Coinbase can range from 5% to 15% of an employee’s base salary.
Some other compensation packages Coinbase offered new hires in the last month include:
1. $672,550 a year for an infrastructure engineer
- Base salary: $237,000
- Cash bonus: $35,550 (15% of base salary)
- Stock-based compensation: $400,000
2. $464,500 a year for a senior staff software engineer
- Base salary: $230,000
- Cash bonus: Up to $34,500 (15% of base salary)
- Stock-based compensation: $200,000
3. $401,600 a year for a senior software engineer
- Base salary: $206,000
- Cash bonus: $20,600 (10% of base salary)
- Stock-based compensation: $175,000
4. $362,000 a year for a senior protocol engineer
- Base salary: $170,000
- Cash bonus: $17,000 (10% of base salary)
- Stock-based compensation: $175,000
According to a post on its company blog, Coinbase benchmarks its pay to the 75th percentile of a “highly competitive set of peers.” The cohort includes some of the largest tech companies, including Google and Facebook-parent Meta.
The median base salary for a software engineer at Coinbase is $185,000 a year, according to salaries shared on Blind by verified Coinbase professionals.
But unlike the internet giants, Coinbase decided to adopt annual equity grants, which begin vesting right away. The practice forgoes the typical four-year schedules common in the tech industry for new hires.
How does equity compensation work at tech companies?
Companies might offer employees equity as part of their pay packages. Equity compensation might offer partial ownership in the company for work completed.
Common types of equity compensation include stock options, or the opportunity to buy shares at a fixed price, sometimes called a “strike” price, and so-called restricted stock units. Restricted stock units are a promise by a company to provide a set number of shares or a cash value of shares in the future. The future event is generally a milestone, such as an acquisition or IPO, or after a particular time of ongoing employment or work.
What equity compensation do cryptocurrency companies offer?
Coinbase is a public company listed on Nasdaq, and public companies that offer employees equity, typically provide employees with restricted stock units.
At Coinbase, the share price for restricted stock unit grants is calculated by taking the stock’s average closing price for the 60 trading days before your first month of employment. The method is called the “trailing average.”
Coinbase provides employees with restricted stock units that vest entirely after one year. The vesting period begins on an employee’s first day at work and does not have a “cliff” or waiting period.
In contrast, Gemini, a competing cryptocurrency exchange and custodian, offers employees “profits interest units” and not stock options or restricted stock units.
Profits interest units represent an interest or a claim to future profits and the appreciation of a company’s assets. They are similar to restricted stock units, which guarantee a fixed cash value or a number of shares, but may not require an event like an acquisition or IPO to realize any value. Unlike stock options, profits interest units do not typically require employees to buy the equity.
The bottom line
Cryptocurrency firms are happy to pay up for the best talent in a competitive job market. According to a recent analysis of job offers posted on Blind, the recent decline in bitcoin and other cryptocurrencies’ value has not slowed down the pace of hiring or pay packages. Engineers and other technologists recently reported receiving job offers with total compensation close to $1 million a year.