Cryptocurrency startup underpaid women and Black employees, data shows
By Nathaniel Popper
The fast-growing cryptocurrency startup Coinbase has been rattled in recent months by tensions between executives and employees who said they were being treated unfairly because of their race or gender.
While management at the company has argued that the complaints were limited to a handful of employees, Coinbase’s own compensation data suggests that inequitable treatment of women and Black workers went far beyond a few disgruntled workers.
The data, recently obtained by The New York Times, indicated that women at Coinbase were paid an average of $13,000, or 8%, less than men at comparable jobs and ranks within the company, according to an analysis of the figures, which included pay details for most of Coinbase’s roughly 830 employees at the end of 2018.
The picture was also unequal for the 16 salaried Black employees in the data. They were paid $11,500, or 7%, less than all other employees in similar jobs.
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 Coinbase analysis was conducted for The Times by Alexandra Marr, an economist who has provided statistical analysis for court cases involving pay bias. When she factored in stock options for Coinbase’s employees — often an important part of pay at startups — the compensation for women and men was roughly the same while the gap between white and Black employees grew to 11%.
Nine employees included in the data confirmed the accuracy of the figures about themselves and colleagues they knew.
The pay disparities are likely to add to tensions at the San Francisco company, which is riding a boom in the value of cryptocurrencies like Bitcoin. It recently told regulators it intended to file for an initial public offering.
Numerous Black employees at Coinbase recently publicly complained about the discrimination they faced at the company. Several women who work at Coinbase have also complained internally about how they were hired, paid and promoted, according to company documents and five employees with knowledge of the complaints. The people would speak only on the condition they not be named because they had signed nondisclosure agreements.
The compensation analysis paints a new and detailed picture of the challenges that women and Black employees have faced at Coinbase, a startup that has taken center stage in a broader debate in Silicon Valley about how underrepresented employees are treated.
“This certainly looks like a company with a problem,” said James Finberg, the lawyer who is leading the two biggest cases on pay bias in Silicon Valley, against Oracle and Google, after reviewing the Coinbase data.
In a statement, L.J. Brock, Coinbase’s chief people officer, said the company started to conduct a comprehensive review of compensation across the company in late 2018.
“As a result of this process, we implemented a new compensation program that brought Coinbase in line with some of the world’s most respected technology companies. This program included: implementing a robust, industry standard leveling system; implementing nonnegotiable, single pay targets for base salary; and awarding equity to all roles and levels,” Brock said.
Brian Armstrong, Coinbase’s chief executive, has prided himself on his management strategy and acumen, writing numerous memos on his efforts to create a “consistent culture” dedicated to growth. But his strategy has left many workers feeling shortchanged or alienated, according to current and former employees, surveys and internal documents.
The growing criticism from employees could make it harder to hire new workers at a time when Coinbase is in need of them. More than 60 employees — or 5% of the company — resigned this fall after Armstrong put in place new policies restricting employees from discussing noncompany politics and social issues during work.
The compensation details given to The Times do not go past 2018. At the time, the company had around 830 employees, the data shows. Coinbase has since grown to around 1,100 employees.
The tech industry has struggled broadly with unequal representation and pay for women. Pinterest, for example, agreed to pay $22.5 million this month to settle a suit from its former chief operating officer, accusing the company of sexism and pay discrimination.
But few companies have released detailed information about pay. Those that have, like Google and Oracle, did so in response to lawsuits brought by female employees accusing the companies of pay bias.
The data analysis from those cases suggests that Coinbase had bigger wage disparities between men and women than either Google or Oracle. At Oracle, the gap between men and women with similar backgrounds and roles was 3.9% according to analysis in the court case against the company — less than half as much as the gap at Coinbase.
The Coinbase figures arrived at by Marr took account of the job level of all employees, as well as their status as an engineer and manager. It is possible that if the analysis took account of more factors, the pay disparity would shrink.
In the 14 job categories at Coinbase with at least three women, the average woman earned less than the average man in all but two job categories.
Black employees earned less, on average, than white employees in all but one of the eight job categories that had any Black staff members, the analysis by Marr shows.
The wage disparities are compounded by the fact that women and Black employees were concentrated in the lower-paying jobs at the company.
At Coinbase, the engineering staff was only 13% female, according to the company’s own analysis from 2018, which was obtained by The Times. This was half the industry average and lower than the number at all of the 11 companies that Coinbase considered competitors, according to the company’s internal analysis, which was shared with The Times.
Employee unhappiness over pay and culture led to several negative reviews on the career site Glassdoor that cite problems with pay and representation for women and Black employees, culminating in an overall rating of 1.1 out of 5 on diversity and inclusion.
The bad reviews led to conversations among executives, some who pushed for changes to the company’s culture, according to four former employees briefed on the conversations, who would speak only on the condition of anonymity because of nondisclosure agreements they signed.
An internal document about the company’s struggles to improve diversity, from around the same time as the data, said that employees had noticed the “lack of engagement” on diversity from executives, leading to “confusion” about whether the company cared about improving the environment for minorities.
“Without senior executive engagement, diversity is considered a secondary, ‘nice to have’ rather than a priority for the organization,” the document said.
Or, as one otherwise positive review on Glassdoor put it, at around the same time: “Don’t repeat the same mistakes of the past, where women and minorities are left behind.”