Cryptocurrency Begin-Up Underpaid Girls and Black Staff, Information Reveals

The fast-growing cryptocurrency start-up Coinbase has been shaken in recent months by tensions between executives and employees who claim they are being treated unfairly because of their race or gender.

While the company’s management has argued that the complaints were limited to a handful of employees, Coinbase’s own compensation data suggests that the unequal treatment of women and black workers went well beyond a few disgruntled workers.

The data, recently obtained from the New York Times, showed that women at Coinbase were paid an average of $ 13,000, or 8 percent less than men for similar jobs and ranks within the company. This revealed an analysis of the numbers, which included the pay details for most of Coinbase’s roughly 830 employees at the end of 2018.

The picture was also unequal for the 16 employed black employees in the data. They received $ 11,500, or 7 percent less than anyone else in similar professions.

The wage differentials at Coinbase seem to be much larger than across the tech industry and the few other tech companies that have had to publish data.

The Coinbase analysis was performed for The Times by Alexandra Marr, an economist who has provided statistical analysis for litigation with wage bias. When she considered stock options for Coinbase employees – often an important part of pay at startups – compensation for women and men was roughly the same, while the gap between white and black employees widened to 11 percent.

Nine employees in the data confirmed the accuracy of the numbers about themselves and their colleagues.

The wage differentials are likely to create tension at the San Francisco company, which is booming in the value of cryptocurrencies like Bitcoin. It recently announced to regulators that it intended to apply for an IPO.

Numerous black Coinbase employees have recently complained publicly about the discrimination they have faced within 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 who were aware of the complaints. People would only speak on condition that they would not be named because they signed non-disclosure agreements.

The compensation analysis paints a new and detailed picture of the challenges women and black employees face at Coinbase, a start-up that has been the focus of a wider debate in Silicon Valley about treating underrepresented employees.

“This certainly looks like a company with a problem,” said James Finberg, the attorney leading the two largest pay bias cases in Silicon Valley against Oracle and Google after reviewing Coinbase data.

In a statement, Coinbase’s chief people officer LJ Brock said the company began 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; Implementation of non-negotiable individual wage targets for the basic salary; and to give justice to all roles and levels, ”said Brock.

Brian Armstrong, Coinbase CEO, takes pride in his management strategy and acumen, and has written numerous memos on his efforts to create a “consistent culture” dedicated to growth. Because of his strategy, many employees have felt underserved or alienated, according to current and former employees, surveys, and internal documents.

The growing criticism from employees could make it more difficult to hire new employees when Coinbase needs them. More than 60 employees – or 5 percent of the company – resigned this fall after Mr. Armstrong introduced new guidelines that prevented employees from discussing non-company policies and social issues while at work.

Economy & Economy

Updated

Dec. Dec. 23, 2020 at 8:59 p.m. ET

The compensation details disclosed to The Times do not extend beyond 2018. At that time, the company employed around 830 people, according to data. Coinbase has since grown to around 1,100 employees.

The tech industry is largely grappling with unequal representation and pay for women. Pinterest, for example, agreed to pay $ 22.5 million this month to settle a lawsuit from its former chief operating officer, accusing the company of sexism and pay-based discrimination.

Few companies have published detailed information on payment. Those who have done so, like Google and Oracle, have done so in response to lawsuits from female employees accusing the companies of distorting salaries.

Analysis of the data from these cases suggests that Coinbase had larger wage gaps between men and women than Google or Oracle. At Oracle, the gap between men and women with similar backgrounds and roles was 3.9 percent – less than half the gap at Coinbase, according to analysis in the company’s lawsuit.

“If I ran a company and I knew my numbers were worse than the sued people, I’d be concerned,” said Janice Madden, a professor at the University of Pennsylvania who conducted the analysis on the Oracle case.

The numbers in the Google and Oracle cases, which were checked for factors such as experience and education, were not possible in the Coinbase statistics due to the limitations of the data shared with The Times.

The Coinbase numbers determined by Ms. Marr took into account the employment level of all employees as well as their status as engineers and managers. It is possible that the wage differentials would narrow if the analysis included more factors.

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 on average less than white employees in all but one of the eight occupational groups in which black employees were employed, as the analysis by Ms. Marr shows.

The wage differentials are exacerbated by the fact that women and black employees have concentrated on the low-paying jobs in the company.

At Coinbase, only 13 percent of engineers were female, according to the company’s own 2018 analysis obtained from The Times. That was half the industry average and lower than the number of any 11 companies Coinbase considered to be competitors. This was found in the company’s internal analysis shared with The Times.

Employee unhappiness over pay and culture resulted in multiple negative reviews on the Glassdoor career site citing issues with pay and representation for women and black employees, resulting in an overall rating of 1.1 out of 5 for diversity and inclusion led.

The poor reviews sparked conversations between executives, some of whom were pushing for culture changes, according to four former employees who had been briefed on the conversations and would only speak on condition of anonymity due to the confidentiality agreements they signed.

One of the reviews that was widely discussed in the company said that “the unconscious pro-male bias is out of control” warning women that “you are paid less than your male counterparts who have been passed over for promotions”.

Mr. Armstrong generally ignored recommendations from employees who had spoken to him about their diversity concerns, The Times previously reported.

Internal figures reported to The Times show that the company’s diversity has not changed significantly since 2018. When the company last produced an internal report on diversity in late 2019, the proportion of female and black employees at Coinbase was 33 percent and 3 percent the same as in 2018.

In an internal document about the company’s efforts to improve diversity, around the same time as the data, it was found that employees had noticed the leaders’ “lack of commitment” to diversity, leading to “confusion” about who whether the company wanted to improve the environment for minorities.

“Without leadership engagement, diversity is seen as a secondary issue and a priority rather than a priority for the organization,” the document says.

Or, as an otherwise positive review from Glassdoor put it, around the same time: “Don’t repeat the same mistakes of the past that left women and minorities behind.”

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