Step 3: Adopting annual equity grants that drive predictable, real time compensation
Another goal of our new compensation program is to manage volatility and provide as much predictability for our employees as possible. Crypto has historically been volatile, and it’s a reasonable assumption that our stock price may be, too. As we grow, we anticipate more candidates will value predictability in their annual compensation. Instead of a four-year new hire grant (standard at many tech companies), employees will receive annual grants, sized at one-year targets that vest in their entirety each year. An employee’s multi-year equity compensation will no longer be dictated by our company valuation at a single point in time.
Some may say eliminating 4-year new hire grants could hurt retention; we disagree. We don’t want employees to feel locked in at Coinbase based on grants awarded 3 or 4 years prior. We want to earn our employees’ commitment every year and, likewise, expect them to earn their seat at Coinbase.
We are also eliminating the one-year cliff from our new hire grants. We expect new hires to add value on their first day, so it only makes sense for them to start vesting rewards for their contributions.
We also plan to make these annual grants for all employees together at one time, using one share price. This is designed to minimize disparate outcomes that can persist for years after one’s start date. This is another way we are ensuring pay differences are due only to demonstrated performance. Everyone will have the same incentive to add value and grow our company together, which is important for our culture.
These are significant changes, but ones we believe will help us achieve our ambitious goals in this next phase of growth. We are still early in rolling out this program and, like so many things at Coinbase, we’ll assess, understand and iterate on it over time. But we believe it aligns our compensation philosophy with the culture we want to build, and we can’t wait to see what it enables.
If this excites you, please apply to join the team here.