Support for executive compensation among shareholders of U.S. Bitcoin mining companies has dropped to 64%, far below the over 90% approval rate of the S&P 500.

According to a research report released by VanEck on July 10, leading U.S. Bitcoin mining companies saw shareholder support for executive compensation packages drop to an average of 64% in the proxy voting for 2024, far below the approval rate of over 90% in the S&P 500 index. VanEck reviewed the filings of 8 publicly listed mining companies and found that the proposed compensation for executives (NEO) in 2024 increased from $6.6 million in 2023 to $14.4 million.

Executives’ compensation has seen a significant increase.

According to the report, in 2023 and 2024, the portion of executive compensation coming from equity and other long-term instruments accounted for 79% and 89% respectively, far exceeding the 63% of the Russell 3000 index and the 63% of the energy sector. The base salary is approximately $474,000, close to the industry standard, but equity awards have significantly increased.

For example, the CEO of Riot Platforms received a stock bonus of $79.3 million for 2024, nearly double the $40.1 million bonus of the Marathon CEO, and well above the industry average. At the same time, Core Scientific (CORZ), which is recovering from bankruptcy, paid its CEO a stock bonus of $39.5 million.

Executive compensation votes face increasing opposition

Core Scientific, Riot, and Marathon (MARA) failed to pass the compensation advisory vote for 2025, receiving support rates of 38%, 32%, and 22%, respectively. Within the industry, 6 out of 8 companies did not meet the 70% support threshold, resulting in a failure rate of 75%, whereas the failure rate for the Russell 3000 index is approximately 4%.

Investors are also closely watching the issue of equity dilution. Terawulf and Core Scientific have each approved equity plan expansions equivalent to about 10% of the company’s outstanding shares, while Bit Digital, Hut 8, and MARA have approved smaller increases. Analysts warn that generous equity retention plans will exacerbate insider dilution, especially when rewards are realized in the short term.

Shift to performance-based equity incentives

Among the 8 mining companies, 6 are now using performance stock units (PSUs) based on multi-year stock price or shareholder return targets, a significant increase compared to 2 companies in 2022. However, CleanSpark has not yet adopted PSUs, and Bit Digital has been authorized but has not issued them.

VanEck pointed out that most plans still rely on a grant period of 2 to 3 years and “issue upon achievement” equity, creating a gap in alignment with long-term value creation.

The huge disparity between executive compensation and market value growth

Comparing the relationship between executive compensation and market value growth in 2024, the differences are significant: Riot’s $230 million executive compensation accounts for 73% of its market value growth, while Marathon is 18%, and Core Scientific is only 2%. This difference reflects better alignment of compensation.

VanEck concludes that the board can constrain shareholder dissent by linking bonuses to the cost of mining each Bitcoin, thereby promoting operational discipline; linking long-term equity to capital return metrics rather than absolute stock price targets; extending the grant period and limiting rewards to reduce dilution effects.