VanEck Report: Bitcoin Miners Face Shareholder Pushback Over Executive Compensation
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Shareholders are increasingly opposed to the executive compensation packages awarded to Bitcoin mining companies, according to a new report from asset manager VanEck. The research highlights “aggressive compensation packages” granted despite, or often contrary to, shareholder interests.
The findings indicate surprising disparities: the average approval rate for executive pay packages among surveyed Bitcoin miners stood at just 64%, significantly lower than the approximately 90% typically approved for the S&P 500 and Russell 3000 companies.
Executive Pay Exceeds Sector Norms
Despite scrutiny, the compensation for executives at US-listed Bitcoin miners remains substantially higher than in comparable IT and energy sectors. The study analyzed eight prominent Bitcoin mining firms: Bit Digital, Cipher Mining, CleanSpark, Core Scientific, Hut 8, MARA Holdings, Riot Platforms, and TeraWulf.
Average executive pay, encompassing salaries, bonuses, and stock awards, nearly doubled in 2024 compared to 2023, rising to approximately $14.4 million.
Equity-Centric Packages
The compensation structure is heavily skewed towards equity, with equity awards comprising 89% of total pay in 2024, and 79% in 2023. Most notably, 2024’s reported largest equity award was $79.3 million granted to Riot Platforms CEO Fred Thiel, significantly exceeding compensation provided to peers at other miners.
“Miner executive pay practices remain aggressive, equity-heavy, and often weakly aligned with shareholder outcomes.”
Performance Inequality
The report underscores a stark divergence in how executives capitalize on performance. While companies like TeraWulf and Core Scientific saw executives rewarded for minimal market capitalization gains (0.5% and 2%, respectively), Riot Platforms saw its executive compensation effectively mirror a disproportionate 73% of its market cap appreciation, totaling $230 million in 2024.
This disparity exacerbated the negative shareholder sentiment regarding executive pay, with three of the eight firms facing particularly strong rebuffs in recent proposals.
A Path Towards Alignment
Despite the controversy, six of the eight analyzed firms now utilize performance-based stock units (PSUs) with multi-year vesting requirements tied to metrics like share price or total shareholder return. Furthermore, support for annual shareholder votes on pay packages is more prevalent among these companies.
VanEck suggests potential improvements: tying bonus thresholds to cost-per-coin efficiency, incorporating measures like return on invested capital, and strengthening performance benchmarks for equity awards.
“As Bitcoin miners mature into large-scale infrastructure operators, their executive compensation programs must evolve as well,” concludes the VanEck report.
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