Microstrategy To Pay Board Members In Bitcoin
Having loaded up to the gills with bitcoin, Microstrategy, the company that has become the most popular publicly traded proxy for the cryptocurrency, and whose holdings surpassed $5.4 billion (with 90,859 tokens as of March 1), announced today that it would start spending some of this digital cash hoard, and would pay its four non-employee directors in bitcoin, “marrying management closer to the software maker’s strategy of investing in the largest cryptocurrency”, according to Bloomberg.
Then again, it’s not a pure bitcoin payout: as the 8K reveals, compensation fees for each board member will be based in U.S. dollars and then will merely be converted into Bitcoin during the time of payment. The question is whether the recipient will keep the comp in bitcoin or will immediately convert it back to USD (a move which if leaked would not be viewed favorably by MSTR investors).
The move is the software-analytics developer’s “commitment to Bitcoin given its ability to serve as a store of value,” the Tysons Corner, Virginia-based company said in an 8K filing, as excerpted below:
On April 11, 2021, the Board of Directors (the “Board”) of MicroStrategy Incorporated (the “Company”) modified the compensation arrangements for non-employee directors. Going forward, non-employee directors will receive all fees for their service on the Company’s Board in bitcoin instead of cash. In approving bitcoin as a form of compensation for Board service, the Board cited its commitment to bitcoin given its ability to serve as a store of value, supported by a robust and public open-source architecture, untethered to sovereign monetary policy.
Under this modified arrangement, the amount of Board fees payable to non-employee directors remains unchanged and will be nominally denominated in USD. At the time of payment, the fees will be converted from USD into bitcoin by the payment processor and then deposited into the digital wallet of the applicable non-employee director.
Shares in MicroStrategy were down less than 1% on the session, last trading at $708, and down from an all time high of $1,272.93 hit on February 9. Even so, the stock has surged almost 500% in the past year.
The CEO Michael Saylor has been one of the most vocal corporate advocates of Bitcoin, saying it should be part of any company’s balance sheet. MicroStrategy was one of the first public companies to invest a significant portion of its treasury into the digital currency.
Mon, 04/12/2021 – 13:27