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Coinbase CEO’s earnings may exceed $ 1 million per day after the exchange enters the stock market

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The rise of the cryptocurrency market has led to the fact that the compensation package given to Coinbase CEO Brian Armstrong last year could become one of the largest in the American corporate world. Bloomberg writes about this with reference to official documents and the latest news.

Armstrong could earn more than $ 3 billion, which translates into more than $ 1 million for every working day over the next decade. This is another example of the so-called founding grant, where founders of companies receive large blocks of shares in advance of listing on the stock market. Startup executives typically motivate the need for such generous rewards to retain founders, even though their shares could be worth billions of dollars without it. Similar packages were received by the CEO of Palantir Technologies Inc. Alex Karp, who could win over $ 1 billion in equity over the next ten years, and the CEO of Snowflake Inc. Frank Slotman, for whom the payout is estimated at $ 80 million per month for four years.

Coinbase declined to comment on Armstrong’s earnings details. In its February 25 registration application, the company writes that if the objectives are met, it will receive “extremely balanced and properly agreed” compensation with shareholders. After a losing 2019, the exchange made $ 322 million in profits last year.

Armstrong, 38, founded Coinbase in 2012 and received 9.3 million options in August 2020, corresponding to approximately 3.8% of the available stock. The strike price was set at $ 23.49, which Coinbase’s board of directors said was a fair value for the company’s stock at the time. Once the exchange enters the stock market, the reward is eligible in six rounds if the average Coinbase share price over 60 days meets targets in the $ 200 to $ 400 range. At the high end, that means Armstrong’s stock will rise 1,600%.

Closed trading data indicate that he may well expect the maximum reward. On February 19, a buyer purchased 127,000 Coinbase shares at $ 373 per unit. This figure is in close proximity to the most optimistic target. At this rate, the value of Armstrong’s options on paper will be more than $ 3 billion. The options are valid for 10 years. In its filing, Coinbase did not specify if it intends to further incentivize Armstrong at this time. According to the Bloomberg Billionaire Index, his share in the company is estimated at $ 15 billion.

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