Forget currencies, Coinbase is switching up employee compensation

Ford Motor stock certificate issued to Henry Ford himself (Source: Bettman / Getty Images)

In tech, you frequently see folks in handcuffs.

Specifically, golden handcuffs, which signify the idea that employees must stay at companies for years in order to take home hefty stock payouts. These payouts are a primary topic of conversation in tech salary negotiations.

Now, Coinbase is flipping all of that on its head

In a blog post, Coinbase’s chief people officer L.J. Brock lays out the company’s new approach, including:

• Increasing its compensation targets from the 50th to the 75th percentile in tech
• Eliminating negotiations from its recruiting process
• Adopting annual grants instead of typical 4-year stock schedules

As with anything, this comes with pros and cons

In his post, Brock says negotiations disproportionately impact women and underrepresented minorities.

Coinbase, he explains, is trying to reward employees based on actual performance at Coinbase — not in a negotiation.

Critics have pointed out the shift to annual grants can benefit companies more than it does employees. Why? The valuation of grants resets every year, thus reducing the potential upside.

The move is getting mixed reviews

Both Stripe and Lyft switched over to 1-year grants prior to Coinbase, so Coinbase has some solid backup. But an anonymous post calling to boycott Stripe, Lyft, and Coinbase racked up ~800 likes, and clearly saw some heated debate.

Some, like Brock, believe the move will give both Coinbase and its employees the chance to show honest, mutual commitment toward each other.

Coinbase board member Fred Wilson thinks the move will unshackle employees from their golden handcuffs. “I’ve never loved that concept,” Wilson writes on his blog. “It feels like staying in a bad marriage for the kids.”