Bitcoin Miners Face Shareholder Backlash Over 115% Executive Pay Surge

Shareholders have expressed significant dissatisfaction with the high compensation packages awarded to executives of publicly listed Bitcoin mining companies. During this year's proxy season, support for executive pay packages at leading US Bitcoin miners averaged 64%, a stark contrast to the over 90% approval rate typically seen across the S&P 500. This trend highlights a growing resistance among investors to the escalating executive compensation in the Bitcoin mining sector.

An analysis of filings from eight listed miners revealed that the average compensation for named executive officers (NEOs) surged from $6.6 million in 2023 to $14.4 million in draft 2024 proxies. Equity and other long-term instruments constituted a significant portion of this compensation, accounting for 79% in 2023 and 89% in 2024. This is notably higher than the Russell 3000’s 63% and the energy sector’s 63% weighting. While base salaries remained relatively stable at around $474,000, equity grants saw a substantial increase.

Riot Platforms’ CEO received a $79.3 million stock award for 2024, nearly double Marathon’s $40.1 million grant and significantly higher than the peer averages. Core Scientific, which was emerging from bankruptcy, issued its CEO $39.5 million in stock as part of the remuneration package. These high equity grants have raised concerns about potential dilution and the alignment of executive interests with shareholder value.

The say-on-pay votes further underscored the mounting resistance. Core Scientific, Riot, and Marathon failed their 2025 advisory votes on compensation, receiving approval rates of only 38%, 32%, and 22%, respectively. Industry-wide, six out of eight companies missed the 70% support threshold, a failure rate of 75% compared to about 4% for the Russell 3000. This indicates a significant pushback from investors against the current compensation structures.

Investors also scrutinized the dilution caused by equity plan expansions. Terawulf and Core Scientific approved expansions equal to roughly 10% of the shares outstanding, while smaller increases were approved at Bit Digital, Hut 8, and Marathon. Analysts warned that generous share reserves, when awards vest on short timelines, can amplify insider dilution, further straining shareholder trust.

In response to these concerns, there has been a gradual shift toward performance-based compensation. Six of the eight miners now use performance stock units (PSUs) that vest on multi-year share price or total shareholder return targets, up from two in 2022. However, CleanSpark has yet to adopt PSUs, and Bit Digital has authorization but no issuance. Most plans still rely on two to three-year vesting horizons and “as-achieved” equity, leaving gaps in alignment with long-term value creation.

Comparing 2024 NEO pay with market cap gains shows a stark dispersion. Riot’s $230 million aggregate NEO compensation equaled 73% of its market-cap increase, while Marathon’s 18% ratio and Core Scientific’s 2% ratio reflected better alignment. This disparity highlights the need for more transparent and performance-driven compensation structures.

To address these issues, boards can consider several measures. Tying bonuses to cost-per-coin-mined can enforce operating discipline. Linking long-term equity to return-on-capital metrics instead of absolute share-price targets can better align executive interests with shareholder value. Extending vesting schedules and capping awards can also help curb dilution and ensure long-term alignment with shareholder goals.