Shareholder opposition to executive pay packages is on the rise. Consequently, publicly listed Bitcoin mining companies are coming under heightened criticism over executive pay. According to a recent Bloomberg analysis, compensation for named executive officers (NEOs) at these firms has grown tremendously. This increase prompts the question of whether their compensation is truly tied to long-term value creation.

Take for instance, the fact that NEOs at eight top publicly traded miners took home an average of $6.6 million in 2023. By 2024, that number had jumped to $14.4 million. Equity and other long-term instruments account for the majority of this compensation. This contrasts with 2023 where equity and other long-term instruments made up 79% of NEO compensation, rising to 89% in 2024. By contrast, the Russell 3000 and the energy sector invest 63% of their weight into equity and other long-term vehicles. This divergence underscores how different sectors view and execute investment strategies.

Though long-term incentives—often the largest part of executive compensation—remain a central pillar on which many corporations design executive pay, the structure of these plans is coming under fire. Yet the vast majority of plans still rely on vesting periods of two to three years. Investors counter “as-achieved” equity does not adequately align executive incentives in the best interest of delivering long-term value creation.

The ratio of NEO compensation to market capitalization increase is especially egregious. In 2024, Riot’s aggregate NEO compensation matched 73% of its market-cap increase that year. Marathon's NEO compensation ratio to market-cap increase is 18%, while Core Scientific's ratio is 2%. Most strikingly, while Core Scientific was laying off thousands, it awarded its CEO $39.5 million in equity as part of his remuneration package. Riot Platforms' CEO received a $79.3 million stock award for 2024, and Marathon's CEO received a $40.1 million stock award for 2024.

This pay raise, including the manner in which it was packaged, has resulted in a dramatic reduction of shareholder support for executive compensation packages. The result on executive pay was even starker. None of the eight companies received enough support to clear a 70% support threshold. The overall approval of executive compensation plans across the top US Bitcoin miners is 64%.