Coinbase's new compensation policy is good, actually

Death to salary negotiations

✍️ The big story

Earlier this week, Coinbase announced it was changing the way it handles employee compensation by increasing base comp to match tech industry competitors, adopting annual equity grants in lieu of four-year new hire grants with a one-year cliff, and eliminating salary negotiations from its hiring process.

It’s that last bit—the no more salary negotiations—that got the extremely online crowd all up in arms and complaining about how Coinbase was “banning” a practice that is bad and a process no one actually likes. From the Coinbase blog post:

Traditionally people expect they need to negotiate for the best package after being hired in a new job. Those that do this well tend to be rewarded, and those that don’t lose out. These negotiations can disproportionately leave women and underrepresented minorities behind, and a disparity created early in someone’s career can follow them for decades. We want to do everything we can to ensure that’s not the experience at Coinbase. All employees in the same position, in the same location, receive the same salary and equity offer. No exceptions.

Never mind that multiple studies have shown salary negotiations lead to inequitable outcomes for women and underrepresented applicants. Never mind that Coinbase is not alone in creating a standard methodology around its salary structure—something Buffer has been lauded for since 2013—or that Reddit (under Ellen Pao’s leadership) eliminated salary negotiations half a decade ago. Never mind that the change was likely made in response to recent criticism of a particularly large pay gap for women and black employees at the company.

This is something Coinbase is doing, and thus ipso facto it is bad.

The reason for all the outrage is that everybody hates Coinbase, largely due to its hamfisted “no politics at work” policy announced in the wake of George Floyd’s murder and national social unrest last year. It probably doesn’t help that people were reminded of the incident a few weeks ago when Basecamp’s founders released their own dumb no-politics memo and that company promptly imploded.

But because a subjectively bad company is doing an objectively good thing, everyone online is pretending that they love a system in which their starting salary is not defined by the work they will be doing, but is largely arbitrary and driven by some combination of when they entered the workforce, how big or successful their last company was, and their ability to make shit up when talking to an HR rep.

If Coinbase truly wants to foster a more diverse and inclusive workplace—and I understand why people doubt that it does!—the company will be facing an uphill battle due to last year’s memo and earlier pay practices that disadvantaged women and underrepresented employees. But by becoming a remote-first company, it’s more likely to attract diverse talent wherever that talent is. And by eliminating salary negotiations, it is more likely to pay those people what they’re worth. Really, Coinbase could be doing a lot worse.

Anyway, my sincere hope is that more companies adopt similar measures—and that the online horde doesn’t rush to assume the worst when they do.

📖 What I’m reading

The case for letting people work from home forever
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In reversal, retirements increased during the pandemic
After decades in which it decreased, the retirement rate rose during the pandemic, especially with the early retirement crowd.

The T-Mobile / Sprint merger hasn’t created jobs — it’s ended them
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The absurdity is the point
What can I say? If you’re not following Charlie Warzel at Galaxy Brain yet, what are you even doing with your life?

Credit-card debt keeps falling. Banks are on edge.

🧘‍♂️Your moment of zen