Hedera management receives compensation in both base salary and coin grants.
Senior management salaries range from $200,000 to $350,000 annually. For the first several months, early members of management and other early team members worked for substantially less cash compensation.
Accounting for coins they may receive through coin grants and the coins they will receive under their SAFTs, Dr. Baird and Mr. Harmon (together, the “Founders”) each have a right to just over 5% of the total coin supply.
Dr. Baird and Mr. Harmon each have a coin grant of two billion hbars in total allocation (4% of the total supply of 50 billion hbars), each vesting over a six-year period as follows:
- 500 million coins, previously described for ‘short term’ release, which vest over a period ending in 2021. Baird and Mr. Harmon previously agreed to delay receipt of a portion of their “short term” allocation until August 2023 through November 2024.
- 5 billion coins, previously described for ‘long term’ release, which vest over a period from 2020 to 2023.
The Founders have each vested into approximately 200 million, or 40% of the short-term allocation, as of December 31, 2019. Those coins were released on February 1, 2020. (Under the terms of the grant and requirements of U.S. tax laws those coins had to be released no later than March 15, 2020.) Additional coins will be released monthly. As with all employees, for each release of coins, Hedera withholds a certain percent in order to meet Hedera’s tax withholding obligations.
Hedera is in the process of negotiating formal hbar transfer restriction agreements with the Founders. In addition, the Founders have publicly committed that they will not sell any of their granted coins without informing the public at least 30 days in advance. Accordingly, the 400 million coins mentioned above (200 million coins each, vested through December 31, 2019), less the amount that was withheld for tax purposes, were deposited into a common account with the other early executives who also are willing to formally lockup those coins and have similarly committed to providing public notice prior to selling them.
Approximately 25 million coins per month will be released to Dr. Baird and Mr. Harmon through March 2021. Each of those additional distributions, less the coins withheld for taxes, also will be deposited into the common account.
Additionally, Dr. Baird and Mr. Harmon each participated in SAFT Series 1 and SAFT Series 3. The total number of coins they each are entitled to under their SAFTs is 461 million and 500 million, respectively, under SAFT Series 1, and 83,333 each under SAFT Series 3. Dr. Baird and Mr. Harmon each sold less than $500,000 worth of coins received from their SAFT distributions on September 16, 2019 (the day of Open Access) to a third party in an over-the-counter transaction at a price of $0.096, but have not sold any coins since that day.
For both coins received under their coin grants and coins received under their SAFTs, Mr. Baird and Mr. Harmon will define a reasonable selling plan, which will be disclosed publicly at least 30 days before selling any of their coins. The selling plan will be designed to avoid flooding the market or selling based on non-public information, and to comport with all applicable laws and regulations.
Other senior executives who joined prior to March 2018 hold coin grants ranging from 250 million to 300 million coins, vesting over a period that ends in December 2021. Those individuals also were permitted to participate in the SAFT rounds and hold SAFTs from Series 1 and Series 3. Thomas Trowbridge, who served as President and departed Hedera in 2019, received 300 million coins on February 1, 2020, less coins withheld for taxes, and will not receive any further coins under a coin grant. Mr. Trowbridge also participated in SAFT Series 1 and SAFT Series 3. Executives who joined Hedera after March 2018 have coin grants ranging from approximately 10,000,000 to 100,000,000, with vesting, and some of those who joined prior to August 18, 2018 also participated in SAFT Series 3.
In addition, the Founders each own 36.3% of Swirlds common stock. Executives who joined in 2017, as Hedera was still being formed, also received grants of options or shares in Swirlds, ranging from 1.0% to 2.5%, with vesting, of Swirlds common stock.