Step 2: Reboot our compensation structure
In November of 2019, we took 5 steps to implement the Comp Reboot.
We changed our peerset from 85 companies to the 18 top technology and financial services companies we regularly compete with for talent. Aligning ourselves with this group was aspirational given most of this group is now public, with nearly 10x our headcount, so we recognized that we were punching above our weight. However, we wanted to ensure that we could attract and retain top talent from these companies and remain within a cash comparable position.
We implemented a Target Total Cash model for base salaries. Coinbase pays what other companies pay for base + bonus, but all in base. We benchmarked against those two numbers to create a single pay target for each role and level. In doing so, every employee is seeing some of their “bonus” in their paycheck.
In addition, as part of the Target Total Cash model, we do not negotiate base salary during the hiring or promotion process. Every role and level has a set pay target.
We made pay targets transparent: Every employee and new hire knows their own pay target, and can ask for the pay target for the level above them. We do not negotiate offers. We believe that the single pay target model drives equitable outcomes for all employees and candidates.
We implemented regular Market Reviews to ensure that our pay targets are at market rates. During our 2019 “reboot,” 70% of employees received a pay increase. Coinbase invested $9M in annualized compensation for the ~700 people at the company to raise compensation and ensure they were at the new pay targets.
In our mid-2020 Market Review, we found that we were at market rate and did not increase our pay targets. In our end of 2020 Market Review, we expect several roles to shift slightly, and we will increase pay targets accordingly. Impacted employees will be notified of any base salary increases in mid-January.
We gave every level equity. Prior to our reboot, Level 1 and 2 roles at Coinbase typically did not receive a new-hire grant. As a result of the reboot, 10% of our population, who had not previously received equity, were granted an equity award and now every full-time employee receives equity upon joining the company (with Board approval). In addition, we moved to annual refresh grants.