Bitcoin Miners' Excessive Comp Prompts Shareholder Concern

SummaryBitcoin miners are paying themselves too much, as RIOT shareholders vote “no” to chief executive’s compensation package.Given that RIOT is the largest bitcoin miner in North America, we see the lack of consensus regarding executive compensation as an opportunity to examine this issue in the digital assets industry, as well as other industries more broadly.Reflecting the heightened awareness of bitcoin mining’s environmental impact (both real and imagined), we would expect anti-crypto forces to mobilize shareholder proposals to target executive compensation and other governance issues should they be out-of-whack with corporate norms.Bitcoin miners are paying themselves too much, as RIOT shareholders vote “no” to chief executive’s compensation package.RIOT Shareholders Vote “No” to CEO’s Comp PackageIn the just-completed 2022 proxy season, shareholder opposition to directors rose again, particularly on the issue of executive compensation. Average voting opposition for executive compensation chairs, for example, rose to 7.29% in 2022 vs. 5.7% in 2021 and 3.8% in 2017.1 In addition, average support in nonbinding votes on compensation dipped below 90% for the first time since 2017.2 In particular, this most recent proxy season has sparked a debate regarding executive compensation in the digital assets community. The industry operates under a unique set of competing pressures between long-term performance and short-term volat...