Research from VanEck has revealed high compensation levels for Bitcoin mining executives in the US, along with significant shareholder discontent regarding these pay levels.
High Compensation and Shareholder Discontent
According to VanEck, shareholders of Bitcoin mining firms are expressing dissatisfaction with the high compensation of their executives. The average approval level for executive pay is only 64%, significantly lower than the 90% seen in S&P 500 and Russell 3000 companies. Matthew Sigel, head of digital assets research at VanEck, stated: “This skepticism appears well-founded. Mining executives continue to grant themselves oversized equity awards that dilute shareholders without reliably linking pay to long-term value creation.”
Structure of Executive Compensation
Bitcoin mining executives earned an average of $6.6 million in 2023, nearly doubling to $14.4 million in 2024. Notably, 79% of total pay in 2023 and 89% in 2024 consisted of equity awards. Riot Platforms CEO Fred Thiel received the largest equity award at $79.3 million in 2024, nearly double that of other miners.
Disparities in Executive Pay and Performance Conditions
The report also highlighted stark differences in pay-for-performance alignment. Companies like TeraWulf and Core Scientific paid executives only 2% of their market cap growth, while Riot Platforms awarded 73% of its market cap increase to named executive officers. Additionally, six of the eight miners adopted performance stock units (PSUs) with multi-year vesting tied to share price targets.
VanEck's research highlights the need for the evolution of executive compensation programs for Bitcoin mining companies to be fairer and more aligned with shareholder interests.
