Coinbase rethinking its approach to compensation | Hacker News Reader

Coinbase rethinking its approach to compensation

blog.coinbase.com

49 pointszacharycohn32 comments

"This year we’ve continued our commitment to top talent by further increasing our cash and equity compensation — from the 50th percentile amongst our peers to the 75th — across the entire company."

"Because our standard offers are world-class, we are officially eliminating negotiations on salary and equity from our recruiting process."

Aren't these things mutually exclusive? Wouldn't moving from 50th to 75th percentile mean your offers are not world class?

They claim world class because they are “a highly competitive set of peers and some of the largest tech companies in the world”.

Moving “from 50th to 75th” is totally meaningless thought if they’re already arbitrarily deciding who is their “peer”. They could just change who the set of peers are to have any effect they want.

The big thing that has been slipped in is the yearly granting of shares. This means that people with the risk appetite will no longer have a shot at possibly higher upside. This also gives employees incentives to hop on the leetcode bandwagon, interviewing towards the beginning of every anniversary to ensure they are not booted out or forced out via reduced pay packages.

Every year the VCs and greedy founders are finding new ways to screw engineers over. First, it was the AirBnB founders cashing out while still building the company (https://techcrunch.com/2011/10/01/chamath-palihapitiya-airbn...), now we have Stripe and others shifting to yearly grants. It appears that there is very little incentive for employees to stick around for more than two years maximum at any one place, which is a shame because it will lead to a loss of valuable experience (supporting your coding/architecture mistakes and learning from them) and loss of the ability to capture the value they have created.

In reality they are just screwing themselves over with high turnover and ghosting from a candidate if an offer comes in lower than competition. They’ll walk it back quietly in a year (if it lasts that long) in a job market like this.

No negotiations and “equality” but:

We will continue to apply multipliers to our equity and cash rewards for high performers identified through our rigorous performance management process. This way, our high performers receive compensation commensurate with their impact

—-

Can someone explain the difference between how other companies compensate different levels of skillset.

Plenty of places where everybody gets the same raise and no bonuses each year especially outside of tech companies. My parents both worked for the government. Their raises were entirely based on multi year schedules in the contract the union had negotiated. E.g., everyone gets n% raise on year 1, m% on year two; once you have n years of tenure, you get an extra m%

>Plenty of places where everybody gets the same raise and no bonuses each year especially outside of tech companies.

AFAIK this is mostly a government thing, and one of the reasons they don't have top-tier labor. Most private companies want to incentive their high achiever (even coinbase here). They usually just wait for high-achiever to ask for a raise and give out bonuses though.

>the best candidates for Coinbase are those who are looking for a highly competitive package and are ready to let their contributions speak for themselves.

I like their concept, but contributions don't speak for themselves.

Exactly. Actual $ count does.

Looks like I dodged a bullet thanks to their broken hiring process!

(FWIW, I didn't bother impressing the karat moonlighter even though I was interviewing for a senior position, including 4 years on crypto backend stuff...)

Seems like the main things are

1) no more negotiation

2) switching to single year equity grants

Some more info about single year grants: https://www.levels.fyi/blog/lyft-vesting-schedule.html

Also comes as an opposite to the rest and vest culture.

single year grants are so dumb - just give me cash at that point

That's what it is. It's just a cash payment provided as stock. You can sell them immediately and turn them into cash. They are taxed as income.

Yeah fuck that tho. My mortgage broker doesn’t care about some crypto fintech rsus

Gotta keep that carrot dangling

Not sure i follow - surely it’s not going to reduce your total comp but if company valuation say doubles over 1 year they’ll just give you half of your previous grant. So don’t think I’d call this a carrot.

In my experience RSUs are granted in a dollar amount at whatever the price of the stock is at grant time. If the stock price rises over the year, your grant value will increase. What I meant by the “carrot” is the dangling of this vesting/payday over x amount of years/quarters with no real guarantee.

Usually it’s a 4-year grant so this carrot has been effectively quartered. So at this point it’s “no thanks I’ll take cash”

This is why you are better to work for small companies. Big companies simply cannot afford to treat people as individuals when it comes to terms of employment... it’s just not practical to negotiate individual deals. Big companies must implement standard processes for things like this.

And if you run a small company, this is how you beat the big companies to the best talent... negotiate deals that suit the individual employees.

The moment a company says the word “percentile” when talking about salaries, you know they’ve become “a big company”.

I found it weird that they describe themselves as "remote first", but all of their currently open roles are geographically restricted (to pretty much either USA or India).

Some detailed comments on that point from a founder of HashiCorp, which is also remote first: https://news.ycombinator.com/item?id=17022563

Their "remote first" policy is likely newer than those postings. I think they sent out a press-release about it this week.

They don't know whatever they're doing. 2.5 years ago, they shutdown all remote positions and focused on they SF office, now they're back remote first...

If you wonder why they closed their SF office, here you have the answer!

"Because our standard offers are world-class, we are officially eliminating negotiations on salary and equity from our recruiting process."

Lol. Their chief-of-something has declared themselves exempt from market forces. The Great Market Defeater.

They have some of the worst offers for a company of their size.

They rely on your "passion" for crypto to underpay and hire naive engineers.

Oh, that explains it. They should also offer subsidized housing then, because their employees will quickly figure that the non-negotiation policy doesn't work on the housing market.

This would explain the network lag.

Where are you getting this? If you joined Coinbase in January, your equity was granted at an $8bn valuation. Today it’s at $56bn for a quick 7x in 5 months.

How are you getting the $8bn number[1]?

In any case, that's moot. Because if you join now (after they are making this change), your equity is being valued at ~$60bnm so the upside is significantly lower.

[1] If that's from the valuation at last funding round, then that's being disingenuous since no one thought that they are worth 8b then, and I would be surprised if they were offering equity at the valuation.

From a friend who joined Coinbase.

Also, see comments in https://us.teamblind.com/s/rh0DJajS

Nothing more demotivating than the compensation chicken dance.

Reply on news.ycombinator.com