Michal Handerhan
BTCSAbout Michal Handerhan
Michal Handerhan is Chief Operating Officer and Corporate Secretary of BTCS and has served on the Board since February 5, 2014; he previously served as Chairman from February 5, 2014 to September 11, 2014 . He holds a B.S. in Computer Science from Czech Technical University and is a co‑founder of BitcoinShop.us LLC . Recent performance context: BTCS revenue rose 204% YoY to $4.07M in 2024, while net income swung to a loss of $1.27M from a $7.82M gain in 2023, reflecting crypto valuation dynamics and higher compensation accruals tied to revenue milestones . Pay‑versus‑performance TSR link shows a $100 initial investment valued at $130 in 2024 vs $88 in 2023 and $36 in 2022, indicating improved shareholder returns vs prior years .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| BTCS | Chairman of the Board | Feb 5, 2014 – Sep 11, 2014 | Early governance role during company transition to blockchain focus |
| BitcoinShop.us LLC | Co‑founder | Pre‑2014 | Foundation for BTCS’s blockchain strategy |
| NASA | Independent IT & web services consultant | Feb 2011 – Feb 2014 | Supported technology programs; informed operations discipline |
| Meesha Media Group, LLC | President & CEO | Oct 2005 – Feb 2014 | Led HD video, Web 2.0, database management services |
| NASA | Team Leader, Peer Review Services | Mar 2002 – Oct 2006 | Led peer review operations; process rigor |
| Folio Investments | Web Developer | Prior to 2002 | Financial tech exposure and web development expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed | — | — | No current external public-company directorships disclosed for Handerhan . |
Fixed Compensation
| Metric | FY 2023 | FY 2024 | Notes |
|---|---|---|---|
| Base Salary ($) | $287,375 | $300,307 | Contracted salary ~$300,000 for 2024 and 2025 |
| Cash Bonus ($) | $15,000 | $94,676 | FY24 performance payout included cash |
| All Other Compensation ($) | $33,176 | $35,176 | 401(k) matching $22,500; insurance; $1,000/month office/internet allowance |
| Director Fees | — | — | Handerhan is an employee‑director; non‑employee director fees apply to others |
Performance Compensation
| Component | Metric | Target | Actual | Payout | Vesting/Terms |
|---|---|---|---|---|---|
| Annual performance bonus (FY24) | Revenue | $3,712,500 | $4,073,518 | $94,676 cash; 153,322 restricted shares; 86,244 ISOs | RS shares issued; ISOs exercisable; shares 33,731 withheld for taxes |
| Long‑Term Incentive Plan (market‑cap) | Market capitalization sustained threshold | $50M sustained for 30 consecutive days | Achieved | 111,111 restricted common shares; Series V distribution shares separate from stock awards | Shares subject to forfeiture unless market‑cap hurdles sustained; Series V non‑convertible |
| Options (FY24 grant) | Equity incentive | n/a | n/a | 86,244 ISOs (ex. price $2.47) | Expires 12/31/2031; exercisable; cashless exercise permitted since 2023 amendment |
| Declined RSUs | Discretionary | 50,000 RSUs (Jan 1, 2024) | Declined | Forfeited | Forfeited at grant date per exec election |
Multi‑Year Compensation Summary (NEO detail)
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2023 | $287,375 | $15,000 | $136,164 | — | $33,176 | $471,715 |
| 2024 | $300,307 | $94,676 | $824,649 | $188,801 | $35,176 | $1,443,609 |
Equity Ownership & Alignment
| Item | Amount | Details |
|---|---|---|
| Beneficial ownership (Common) | 2,190,346 shares; 10.6% of outstanding | 20,181,878 shares outstanding; includes 436,244 vested options; includes 333,333 restricted common subject to market‑cap vesting |
| Series V Preferred (non‑convertible) | 1,254,276 unrestricted; 333,333 restricted | Restricted Series V subject to market‑cap vesting; Series V does not vote in annual meeting; non‑convertible capital structure |
| Options (exercisable) | 350,000 @ $1.90 exp 3/31/2026; 86,244 @ $2.47 exp 12/31/2031 | Exercisable; cashless exercise permitted per 2023 amendment |
| Unvested/Unearned equity | 444,444 unearned Long‑Term Incentive RSUs (common) | Subject to market‑cap thresholds within performance period |
| Pledging/Hedging | Hedging prohibited; pledging not disclosed | Insider Trading Policy prohibits hedging; no specific pledging disclosure identified |
| Ownership guidelines | Not disclosed | No executive stock ownership guideline disclosure identified |
Employment Terms
| Provision | Terms |
|---|---|
| Base agreement | Employment agreement dated June 22, 2017 as COO & Secretary |
| Base salary | ~$300,000 for 2024 and 2025 |
| Annual bonus eligibility | Eligible based on Board‑set criteria; FY24 payouts approved Jan 1, 2025 |
| Severance (non‑CoC) | Lump sum equal to 12 months base salary + pro‑rated earned bonus; medical and life insurance continuation up to 1 year |
| Change‑of‑control (CoC) | If terminated without cause or resigns for good reason within 18 months post‑CoC: lump sum equal to 2× base salary + 2× prior year cash bonus and incentive comp; immediate vesting of options and equity awards upon CoC |
| Good reason definition | Includes diminution of duties, nonpayment, location change >30 miles, consummation of CoC, material breach by company (with cure periods) |
| Clawback | Nasdaq/SEC 10D‑1‑compliant clawback policy adopted; 3‑year lookback for restatements |
| Hedging | Officers/directors prohibited from hedging; Insider Trading Compliance Policy in place |
| 401(k) | Discretionary 100% match up to IRS limits; $22,500 matched to execs in 2024 |
| Perquisites | $1,000 per month office/phone/internet allowance |
Board Governance
- Board service: Director since Feb 5, 2014; former Chairman Feb–Sep 2014 .
- Independence: Not independent due to executive status; independent directors are Lee, Pump, DeSimone .
- Committees: Audit, Compensation, Nominating committees composed of independent directors; Handerhan not shown on committees .
- Attendance: Five Board meetings held in 2024; all directors attended >75% of applicable meetings .
- Dual‑role implications: Combined CEO/Chair roles held by Charles Allen; Board deems combined structure optimal for BTCS; potential concentration of power mitigated by independent committees .
Performance & Track Record Context
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| TSR index of $100 investment | $36 | $88 | $130 |
| Total Revenues ($) | — | $1,339,628 | $4,073,518 |
| Net Income ($) | — | $7,818,728 | $(1,271,174) |
- Builder+ became a key revenue driver in 2024 ($2.45M) alongside NodeOps ($1.62M), but higher validator payments compressed gross margin and contributed to net loss .
- Compensation expense rose due to equity‑based bonuses triggered by exceeding revenue milestones; options fair value raised GAAP expense via Black‑Scholes .
Director Compensation (for governance benchmarking)
| Director | Cash Fees ($) | Stock Awards ($) | Total ($) |
|---|---|---|---|
| Independent directors (Pump/Lee/DeSimone) | $21k–$35k | $35,579–$50,002 | $56,925–$85,002 |
| Chair fees | $5,000 each for Audit, Compensation, Nominating chairs |
Risk Indicators & Red Flags
- Hedging prohibited and clawback policy adopted; positive governance alignment .
- Significant unearned LTI RSUs (444,444 common) and restricted Series V (333,333) could create future selling pressure upon vesting; options exercisable with near‑term 2026 expiration on 350,000 options .
- No related‑party transactions disclosed; no material legal proceedings; cybersecurity governance detailed .
Compensation Structure Analysis
- Shift to equity: In Sep 2024, NEOs voluntarily took restricted stock in lieu of cash salary; Handerhan converted $50,051 of salary into 57,930 restricted shares, increasing equity mix .
- Performance‑linked equity: FY24 payouts tied to revenue exceeding a defined milestone; additional LTI awards vested upon market‑cap thresholds, aligning incentives with growth and market value .
- Option grants: New ISOs at $2.47 expiring 2031 increase at‑risk pay exposure to stock price performance; cashless exercise flexibility added in 2023 .
- Discretionary declines: Handerhan declined 50,000 RSUs granted Jan 1, 2024, signaling sensitivity to dilution or pay optics .
Vesting Schedules and Insider Selling Pressure
| Instrument | Quantity | Vesting/Expiry | Potential Pressure |
|---|---|---|---|
| Common RSUs (LTI market‑cap) | 333,333 restricted common issued; 444,444 unearned RSUs | Vest upon sustained market‑cap thresholds | Large blocks vesting may drive liquidity events if thresholds achieved |
| Series V Preferred (non‑convertible) | 333,333 restricted; 1,254,276 unrestricted | Restricted subject to market‑cap thresholds | Non‑convertible; not a direct common sale overhang but signals incentive alignment |
| Options @ $1.90 | 350,000 | Expire 3/31/2026 | Near‑term expiry could prompt exercise/sales if ITM |
| Options @ $2.47 | 86,244 | Expire 12/31/2031 | Long‑dated optionality; exercisable |
Equity Ownership & Alignment Compliance
- Ownership guidelines: Not disclosed; compliance status not determinable .
- Pledging: No disclosure of pledging; hedging prohibited per policy .
- Beneficial ownership sizable at 10.6%, aligning interests with shareholders .
Board Service History and Independence
- Board member since 2014; not independent due to executive role; no committee memberships; Board committees staffed by independent directors (Pump chairs Audit and Compensation; DeSimone chairs Nominating) .
- Executive‑director dual role can raise independence concerns; mitigated via independent committee structure and majority‑independent Board .
Investment Implications
- Alignment: High equity ownership (10.6%) and performance‑based vesting tied to revenue and market‑cap thresholds align incentives with growth and valuation; hedging ban and clawback strengthen governance .
- Overhang: Material unearned RSUs and near‑term 2026 option expirations create potential selling pressure upon vesting/exercise, a tactical consideration for trading and liquidity .
- Retention/CoC economics: Double‑trigger CoC payout at 2× salary + prior‑year bonus/incentives with immediate vesting may increase retention but could be costly in a sale; severance of 12 months supports stability without excessive guarantees .
- Performance sensitivity: FY24 losses reflect cost of Validator Payments and equity compensation; Builder+ scale improves revenue, but margin volatility persists—pay design that uses market‑cap/revenue triggers may amplify dilution during rapid scale‑up phases .