Coinbase CEO Brian Armstrong owns close to $14 billion of company stock ahead of market debut

Coinbase co-founder and CEO Brian Armstrong talking at TechCrunch Disrupt SF 2018.

Steve Jennings | Getty Photos for TechCrunch

When Coinbase hits the general public market in the approaching weeks, CEO Brian Armstrong is poised to depraved amongst the wealthiest folks in tech.

Armstrong, who co-based mostly the cryptocurrency alternate in 2012 after working for a year at Airbnb, owns 39.6 million Coinbase shares, between his Class A and Class B holdings. His stake is payment $13.6 billion, per an practical non-public market allotment notice this year of $343.58, in accordance with the company’s updated prospectus.

Unlike most tech founders, Armstrong will seemingly be ready to promote shares factual away after Coinbase goes public. That is because there is no lock-up period as part of Coinbase’s allege itemizing, which differs from an IPO in that the company would not elevate contemporary capital nonetheless as a replacement lets in existing shareholders to promote inventory on the starting up market.

Assuming Coinbase’s non-public trading is indicative of where the inventory will birth, Armstrong will was the most contemporary member of a rising neighborhood of tech “decabillionaires.” Headlined on the high by Amazon’s Jeff Bezos, Tesla’s Elon Musk, Microsoft co-founder Bill Gates and Facebook’s Tag Zuckerberg, who’re all payment over $100 billion, the checklist of tech’s mega-filthy rich has expanded very much in contemporary years from surging valuations and contemporary IPOs.

Zoom CEO Eric Yuan, who took his video chat company public in 2019, is payment over $16 billion, in accordance with the Bloomberg Billionaires Index. Atlassian co-founders Scott Farquhar and Mike Cannon-Brookes are each payment conclude to $14 billion, attributable to their company’s 2015 IPO and the inventory’s subsequent bustle-up. Jack Dorsey’s ranking payment has ballooned previous $13 billion, largely as a consequence of Sq.’s rally. Shopify CEO Tobi Lutke and Snap’s Evan Spiegel are both payment over $10 billion.

Most of Armstrong’s wealth appreciation has near in the previous year or in verbalize the cost of Coinbase’s inventory in non-public trades jumped more than 10-fold. The corporate will get most of its income from the trading and storage of bitcoin, which has soared more than 700% in the previous year, and ethereum, which is up effectively over 1,000%.

Bitcoin and ethereum over 12 months

CNBC

But Armstrong has been in the center of controversy as effectively. In a blog post in September, Armstrong suggested employees that, at a time when tensions were high as a consequence of the pandemic, protests for racial justice and a heated presidential election, Coinbase would not be a company centered on activism.

“The reason being that whereas I contemplate these efforts are effectively intentioned, they admire got the functionality to abolish more than a couple of payment at most corporations, both by being a distraction, and by surroundings up inner division,” Armstrong wrote. 

A couple months later, the Unique York Instances ran an expose on Coinbase, detailing Dim employees’ allegations of unfair therapy on the company, at the side of pay discrimination. Coinbase preemptively printed a blog post making an attempt to refute the claims.

None of that has impaired the company’s boost, as non-public trades reached anecdote phases in contemporary weeks before the allege itemizing. But Coinbase does acknowledge in the possibility components part of its prospectus that a bet on the company is, not not as much as in part, a bet on Armstrong.

Hefty incentives

“On story of we are a founder-led company, actions by, or hideous publicity about, Brian Armstrong, our co-founder and Chief Executive Officer, would possibly per chance maybe adversely impression our imprint and popularity,” the submitting says. “Such harmful publicity moreover can admire an harmful originate on the scale and engagement of our customers and can consequence in lowered income, which would possibly admire an harmful originate on our enterprise, running outcomes, and financial situation.”

Armstrong is closely incentivized to defend the momentum going. He modified into as soon as paid a wage of $1 million final year, though his total compensation topped $59 million with all his chance awards.

In August, Armstrong modified into as soon as granted a multibillion-dollar efficiency award, giving him the flexibility to defend 9.29 million alternate suggestions at $23.46 over 10 years. The awards are all per the company’s inventory trading at a certified notice for 60 days. In line with the non-public market notice, roughly three-quarters of the award will vest briefly verbalize. The very most nice looking tranche vests at $400.

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