Bitcoin Miners: The New Kings of Overpaid Executives 🤑

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Oh, the times we live in! While the rest of us toil away, the executives at US-listed Bitcoin mining firms are raking in pay packages that would make even the most extravagant tech and energy tycoons blush. 🤩

According to the latest findings from VanEck, these equity-heavy compensation structures are not just driving up totals but also drawing increasing shareholder resistance. It’s like a modern-day gold rush, but with a digital twist and a hefty price tag. 💰

Across eight miners that VanEck reviewed – Bit Digital, Cipher Mining, CleanSpark, Core Scientific, Hut 8, Marathon Digital, Riot Platforms, and TeraWulf – executive pay averaged a staggering $14.4 million in 2024. This is more than double the previous year’s $6.6 million, and significantly above the averages in the energy and technology sectors. 🚀

And here’s the kicker: while base salaries for mining executives remain broadly in line with other industries, averaging $474,000 in 2023, the primary driver is the sector’s reliance on stock-based compensation, which accounted for 89% of miner executive pay in 2024. It’s like they’re getting paid in digital gold, and boy, are they piling it high! 🏆

While stock-based incentives can align management with investors, VanEck’s analysis indicates many miners continue to structure these awards with short- to medium-term vesting, limited performance gating, and dilution risks that erode shareholder value. It’s a bit like giving a child a credit card and hoping they’ll save for college. 🤔

Shareholders, it seems, are not amused. Across broader corporate America, nearly 99% of executive pay proposals passed during the 2024 proxy season, while S&P 500 and Russell 3000 companies typically witness 90% or higher support rates. By contrast, Bitcoin miners saw an average support rate of just 64%. It’s like a high school dance where the popular kids are being booed off the stage. 🕺

Six of the eight miners, including Riot, Core Scientific, Hut 8, Cipher, TeraWulf, and Marathon, have expanded the use of performance stock units (PSUs). These typically vest over multiple years, tied to share price or total shareholder return benchmarks. It’s a step in the right direction, but it’s like trying to put a band-aid on a bullet wound. 🤕

Marathon has transitioned fully to PSUs in 2025, and Cipher now uses a 50/50 split between restricted stock units and PSUs. Core Scientific reintroduced its long-term incentive plan with performance-linked stock after reorganization. These changes indicate a move away from purely time-based vesting and toward longer-term alignment, although not all firms have fully adopted these practices. 🕰️

CleanSpark, for one, has not implemented PSUs. The same is true for Bit Digital as well. Despite authorizing them, it has yet to issue them according to its latest filings. It’s like they’re holding out for a better deal, or maybe they just enjoy the suspense. 🤫

The question of whether these pay structures are delivering value remains. VanEck’s comparison of total executive pay with each miner’s 2024 market-cap growth shows stark contrasts. At TeraWulf and Core Scientific, executive pay amounted to around 2% of the firms’ market-cap increases. This pointed to relatively efficient pay-for-performance alignment. 🎯

On the other hand, Riot’s executives received $230 million, which is equivalent to 73% of the company’s 2024 market-cap gains, while Marathon’s executive pay was 18% of its market-cap growth. Such disparities have drawn scrutiny, particularly given Riot’s history of shareholder pushback on pay proposals and concerns over dilution tied to expanding equity compensation plans. 🚨

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2025-07-13 07:24