For someone who’s having a great year, Brian Armstrong sure is having a lousy year.
Coinbase’s CEO took another hammer-blow from the New York Times’ Nathaniel Popper on Dec. 29, with an article alleging the firm not only paid black and female employees less than their male counterparts, it did so at levels far worse than is typical in Silicon Valley.
In the Dec. 30 story, Popper wrote that 2018 compensation data obtained by the Times “indicated that women at Coinbase were paid an average of $13,000, or 8 percent, less than men at comparable jobs and ranks within the company, according to an analysis of the figures.”
The records covered most of the 830 employees then working at the top U.S. cryptocurrency exchange, including 16 salaried black employees, the Times said. It also found that black employees were paid $11,500, or 7%, less than other employees.
“The pay disparities at Coinbase appear to be much larger than those in the tech industry as a whole, and at the few other tech companies that have had to release data,” the Times said. The data was reviewed by an economist who has testified in pay bias court cases.
The story comes on the heels of a Nov. 17 Times story that described black employees saying they faced “constant condescension” and were described as “less capable.” And in September, Armstrong announced the company would take an apolitical stance on social issues like Black Lives Matter, leading to widespread criticism and the departure of more than 60 employees after Armstrong offered a my-way-or-the-highway severance package.
The company has nevertheless been having a banner year of rapid growth. In mid-December, Coinbase filed papers with the U.S. Securities and Exchange Commission (SEC) beginning the process of launching an initial public offering (IPO) that would make it the first cryptocurrency firm to go public in the stock market.
Later the same day that the Times story broke, Coinbase was slapped with a $10 million class action lawsuit over XRP sales, which the plaintiff claims is an illegal security.
Coinbase responded to the article with a blog post by Chief People Officer L.J. Brock, in which he said:
“Coinbase is committed to ruthlessly eliminating bias in all our internal processes.”
Brock saids the Times’ conclusions, based on 2018 numbers, was out of date, and that “Coinbase is committed to fair and equitable compensation for every employee.”
He added that over the past two years the company has “put in significant work to ensure our pay-for-performance philosophy is transparent and fair,” Brock said. “We’ve made several major program changes.”
Beginning in October 2018, Coinbase more than doubled the number of employee salary levels, and by early the next year, Brock said the company “provided market adjustments in base pay to ensure that all employees were compensated within the new market range for their role.”
He added, “[a]t that time, all eligible employees received a 3% compensation increase, and a subset of that group received additional adjustments to ensure they were within the range for their role.”
Coinbase said it also rebooted its compensation structure with five major changes, including making pay targets transparent and not negotiating individual salaries, as well as giving all employees—including the two lowest levels—equity.
Updated Dec. 30 at 5:43 p.m. with news of the Coinbase securities lawsuit.