Silicon Valley fortunes are built on rising stock values. But Block, the Jack Dorsey–founded fintech company, is starting off the new year by offering employees an unusual proposition: Take cash instead of stock.
A new compensation plan rolling out to U.S. Staff in the coming weeks features a “pilot choice program” that lets employees choose whether they want to earn some equity in the company or to get paid entirely in cash, according to documents viewed by Coins2Day. “The program reflects our commitment to empowering employees by giving them greater control over their compensation, fostering a culture of trust and autonomy,” the company says in the documents.
The change to compensation at Block comes amid a time of upheaval and rolling layoffs at the company, as Coins2Day has previously reported. Although Block’s stock price is up more than 30% over the last year, finishing Monday’s regular session at $91.94, it remains well below 2021 levels when it traded as high as $268.
Two current employees told Coins2Day that Block’s volatile stock price had become an issue and a topic of open complaint, particularly for workers who were hired or who received new grants of RSU compensation when the company’s stock was much higher, between 2020 and 2021. Employees who received RSUs during this peak have seen their total pay effectively diminish, as their shares became worth less than when they received them.
In the documents, Block says it hopes the option of all-cash compensation will “enhance employee satisfaction” and give Block a better competitive edge, helping it to “attract and retain top talent.”
A Block spokesperson did not respond to emails seeking comment on the planned compensation changes. Block, which operates payment processor Square, money transfer app CashApp, music streamer Tidal, and the layaway payments platform Afterpay, was founded more than a decade ago by Dorsey, one of the cofounders and a former CEO of Twitter.
Under Block’s new plan, employees can customize the amount of the equity portion of their compensation, which currently comes in the form of restricted stock units that vest over a four-year timeline. Employees will be able to select any amount of their RSU compensation in cash, distributed as part of their regular pay, not as an upfront lump sum, equivalent to the RSU grant price (typically the current stock price). The same offering will apply to performance bonuses. The plan is expected to roll out next year to Block employees in international regions.
Offering workers an option for all-cash compensation is a rare move for an established tech company. Even if a company is experiencing a stock slump, as has happened with companies like Meta and Snap, employees are usually only offered what’s referred to as a “top up,” or an additional grant of equity to make up for any difference in a person’s agreed-to compensation level.
Over the last year, Dorsey took on a more active role in running the company under his official title as Block Head. He proceeded to enact a reorganization and multiple rounds of layoffs of more than 1,000 people, put a strict cap on hiring and headcount, ended employee performance improvement plans, and closed the operations of CashApp in the U.K. While cancelling a planned international expansion of the app. The company also closed its developer platform TBD and ordered employees not to mention the name of Jay-Z, a board member who has come under increased scrutiny given his friendship with fellow rapper Sean “Diddy” Combs, who is awaiting trial in prison on multiple charges of sexual assault.
While an option of receiving an all-cash bonus may not vastly improve morale at Block, which took another hit with a spate of layoffs a few weeks before the holidays, as Coins2Day reported, it is nonetheless a largely welcome change. The two current employees said they would prefer to be paid in all cash, even if it may mean less potential upside, as opposed to having compensation tied up in stock.
Are you a Block employee or someone with insight or a tip to share? Contact Kali Hays securely through Signal at +1-949-280-0267 or at [email protected].