According to VanEck, the salaries of executives in Bitcoin mining companies are substantially higher than the average in energy and technology sectors.
Surge in Mining Executives' Pay
An analysis by VanEck indicates that the average pay for executives of eight cryptocurrency mining firms, including Bit Digital and Marathon Digital, reached $14.4 million in 2024, more than double the $6.6 million recorded the previous year.
Compensation vs. Company Performance
Despite the rise in overall pay, a significant portion derives from stock-based compensation, which accounted for 89% of executive pay in 2024, compared to much lower figures in other sectors. Investors are expressing concerns about short- to medium-term vesting and dilution risks related to equity compensation structures.
Pay-for-Performance Misalignment
A comparison of total executive pay with market-cap growth reveals stark contrasts, with Riot's executives earning 73% of the company's market-cap gains, raising questions about the fairness of the current compensation schemes.
The increasing salaries of executives in mining companies have raised alarms among shareholders, highlighting the need for a reassessment of compensation structures in the industry.
