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The fintech standard of stock based compensation has not paid well for these crypto workers.

Coinbase stock crash: $1.2bn in compensation goes up in smoke

Last year, crypto giant Coinbase paid out a total of $820.6M in stock-based compensation. This year, in the first 3 quarters alone, it paid out $1.1bn and the expectation in the third quarter was that it would end the year with total stock-based compensation around the $1.5bn mark.

Sounds great on paper, right? Taking a look at its stock price might change your mind. From December 31st of last year to today, Coinbase’s stock has plummeted an astonishing approximate of 82%.

This means that the $1.5bn will have depreciated in value to $270m, a loss of $1.23bn. After the layoffs in June, we estimate Coinbase to have around 5000 employees, which means that the loss per head is a staggering $246k.

Stock compensation wasn’t evenly spread across the company, however. Some divisions were hurt more than others. Coinbase revealed the departments that received the most stock-based expense so far this year in its Q3 earnings report.

As the chart below shows, Coinbase's technology and development received the vast majority of this year’s stock payments, followed by general and administrative. Sales and marketing staff might be considered to have got off lightly, by comparison.

 

Source: Coinbase Investor Relations, Q3 2022

 

With private crypto companies in like FTX and Genesis in administration/disarray and publicly traded ones plummeting in value, many of Coinbase’s employees are falling out of love with crypto as an industry. Coinbase employees on Blind say they “wouldn’t hold any crypto” and “don’t have faith” in the industry at large. Others are more focused on the staggering amount of money lost simply saying “RIP my stocks.”

That being said, recent Blind reviews for Coinbase aren’t terrible, just mixed. There’s a lot of camaraderie for the “good people” that work there… except the executive staff. The C-suite has been described as “self-serving” and “just plain bad”, which are probably understandable in the circumstances.

For reference, at the end of last year CEO Brian Armstrong spent $133Mn on an extravagant compound in Bel Air. With the drop in share price, employees have lost that money 9 times over.

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Have a confidential story, tip, or comment you’d like to share? Contact: alex.mcmurray@efinancialcareers.com in the first instance. 

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Photo credit: eFinancialCareers/Midjourney

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AUTHORAlex McMurray
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