The world of Bitcoin mining is deeply volatile and high-stakes. The crypto-world know that effective leadership in this field requires more than just technological know-how. It takes good financial stewardship and strategic vision. A recent trend has sparked debate and concern among shareholders: the rising executive compensation in Bitcoin mining companies. Are these executives really taking their companies down paths of sustained, long-term growth? Or are they pumping and dumping, enriching themselves while destroying longterm shareholder value?

Recommendations for Bitcoin Miners' Compensation Structure

VanEck, a highly respected investment management firm, has acknowledged growing accountability for bad CEO pay. In turn, they’ve proposed a number of widely-supported reforms to better match executive interests with those of shareholders. This move is intended to reward efficiency in spending dollars. They further advocate for increasing the rigor of performance gating for equity awards and for linking pay packages to long-term value creation.

Importance of Linking Bonuses to Production Costs

Perhaps the most important recommendation here is to require that bonuses and equity grants be tied to the cost-per-coin-mined. This approach directly incentivizes executives to focus on cost-efficiency, a critical factor for success in the highly competitive Bitcoin mining industry. When compensation is tied to production costs, executives are encouraged to find ways to run efficient mining operations while keeping costs down and profits up.

Potential Benefits for Mining Operations

Implementing this recommendation could lead to several benefits for mining operations. Firstly, it would incentivize executives to double down on investing in more productive mining equipment and new productivity-enhancing technologies. Second, it would advance more energy-smart practices across the school ecosystem, thereby consuming less electricity and saving on operating costs. Adopting this mindset is how we will build a culture of continuous improvement. Executives will be looking around the organization for ways to improve productivity and cut costs.

The second key issue as it relates to compensatory equity awards is the structure of equity vesting. VanEck’s recommendation is for equity to vest over several years and have performance thresholds in addition to service requirements. Not just any results—executives need to demonstrate tangible outcomes to achieve full vesting for their equity prizes. They have to hit their own particular production milestones and they have to improve the company’s overall financial performance. This principled approach goes a long way in making sure that top executives pursue the right goals by emphasizing long-term value creation over short-term windfalls.

Strengthening performance gating on equity awards is an important step here. Specifically, this looks like adopting multi-year vesting, relative benchmarks, and defined performance thresholds within equity plans. For starters, companies can make performance and intended progress targets very specific and measurable. This holds people at the top accountable for their behavior as well as aligning their compensation to how well the company is doing overall.

Analysis of Executive Overcompensation in Bitcoin Mining

Analysis of recent data shows a worrisome pattern of rising executive pay in the Bitcoin mining industry. So far in 2023, Bitcoin miner executives made an average of $6.6 million. That number almost doubled to $14.4 million in 2024. Year after year, shareholders are left to wonder why these pay packages continue to rise so steeply. They are asking whether these mind-boggling salaries can be justified by the companies’ bottom lines.

Overview of Current Compensation Trends

A deeper analysis into the makeup of these compensation packages shows us that they are almost exclusively equity-heavy. Equity awards represented 79% of total pay in 2023, and this increased to 89% in 2024. While equity-based compensation can be a powerful tool for aligning executive interests with shareholder value, it raises concerns about potential short-term focus and excessive risk-taking.

The unwarranted overuse of equity-based compensation can reward short-termism by encouraging executives to focus on short-term stock price appreciation at the expense of longterm sustainable growth. These types of decisions only provide a short-term bump to stock price. Over the long term, they are damaging the company’s long-term prospects. One form of excessive risk taking occurs when executives are strongly incentivized to achieve very aggressive performance goals. This kind of behavior has the potential to risk the entire company’s bottom line.

Impact of Overpay on Company Performance

The effects of executive overcompensation on company performance is a topic of persistent discussion. Others claim that massive pay packages are necessary to lure and retain the best and brightest. Still others argue that these packages are responsible for creating misaligned incentives in the first place, driving bad decision-making. A poster child for this kind of shareholder discontent is RIOT Blockchain, Inc. This unhappiness isn’t without merit. In 2022, RIOT’s shareholders rejected the company’s say-on-pay proposal after facing news that the company paid their CEO a whopping $21.9 million.

In 2025, a number of Bitcoin mining companies had at least half of their shareholders opposed to their pay packages for top executives. Three of the eight miners – CORZ, RIOT, and MARA – lost in their executive compensation shareholder proposals. Even though they received less than 50% support, indicating that the shareholders were extremely unhappy. Furthermore, only two of the eight companies assessed surpassed both the 70% and 80% support thresholds in 2025, highlighting a widespread issue of shareholder concern regarding executive compensation.

The equity-heavy design of these compensation packages has pushed total compensation far north of that. This troubling trend calls into question whether executives are actually motivated—or can be held accountable—to generate long-term value for shareholders. The difference between NEO (Named Executive Officer) compensation and market cap growth has always sounded outrageous, but it is a stark figure. In 2024, NEO’s compensation was responsible for over 73% of RIOT’s market cap increase. By contrast, WULF and CORZ only made up about 2%. This would imply that many firms are wasting valuable company dollars by dramatically overpaying their executives compared to the value they’re producing for their shareholders.

If passed, proxy advisors like ISS flag any proposal with less than 70% support as “low support.” At the same time, Glass Lewis raises the bar even higher by applying an 80% threshold. These benchmarks highlight the increasing pressure that is building on troubling executive pay practices. Today, companies are under increasing scrutiny to tie these pay packages to actual creation of shareholder value.

Implications of the VanEck Report Findings

As noted in this recently released VanEck report, there is a pressing public interest for Bitcoin mining companies to reconsider the structure of their executive compensation. The study’s findings underscore the importance of making sure executive incentives are in line with what’s best for shareholders. Moreover, they argue that executive pay should be tied to long-term value creation.

Effects on Investor Confidence

These findings are quite impactful considering the potential for increased investor confidence in a healthy Bitcoin mining industry. Excessive executive compensation can destroy investor confidence. When their compensation doesn’t match up to the value being created for shareholders, it more often than not results in decreased valuations. This, in turn, can further impose challenges on companies’ ability to raise private capital and fund their growth projects.

Addressing the concerns raised in the VanEck report is crucial for restoring investor confidence and attracting long-term capital to the Bitcoin mining industry. Companies that prioritize long-term shareholder value create a deeper level of trust with investors. By finally putting smart compensation practices into place, they position themselves for more sustainable growth.

Future of Bitcoin Mining Industry Standards

Looking forward, the Bitcoin mining industry has a tremendous opportunity to raise the bar on corporate governance and transparency. This means implementing easy-to-understand and transparent disclosures of executive pay practices and being responsive with shareholders to allegations investors have on the practices. Boards and compensation committees should focus on three key priorities: incentivize cost-efficiency, strengthen performance gating on equity awards, and align pay packages with shareholder value creation.

By embracing these principles, Bitcoin mining companies can help build a more sustainable and equitable ecosystem that benefits all stakeholders involved. As KnowingCoin.com always says, it's about having "no fluff, no FOMO—just the tools to own your chain and conquer the game." This is true not just for Bitcoin mining, but all of these companies’ operations. More importantly, it makes sure they’re going to be configured for long-term success. After all, in the new crypto order, determination and experience make the perfect pair.