Frederick Ernest Ehrsam III

About Frederick Ernest Ehrsam III

Frederick Ernest Ehrsam III, age 36, is Coinbase’s co‑founder and has served on the Board since March 2013. He is a General Partner at crypto investment firm Paradigm (Managing Member Jun 2018–Oct 2023; GP since Oct 2023), and CEO of Nudge Workbench LLC since January 2024; he previously served as Coinbase President (Nov 2012–Jan 2017) and was a FX trader at Goldman Sachs (Jul 2010–Jun 2012). He holds a B.S. in Computer Science and Economics from Duke University; the Board cites his crypto industry insight, historical knowledge, and operational leadership as qualifications .

Past Roles

External Roles

Board Governance

• Independence: The Board determined Mr. Ehrsam is an independent director under Nasdaq and SEC standards .
• Committee assignments: Member, Nominating and Corporate Governance Committee (chair: Gokul Rajaram) .
• Attendance: In 2024, Coinbase held 5 Board meetings; the Nominating & Corporate Governance Committee met 5 times. Each director attended at least 75% of applicable meetings except Messrs. Andreessen and Ehrsam, who each attended over 60% (below the typical 75% threshold) .
• Years of service: Director since March 2013 .
• Governance context: Coinbase is a “controlled company” under Nasdaq rules due to CEO Brian Armstrong’s majority voting power; however, Coinbase maintains majority‑independent Board and fully independent committees .

Fixed Compensation

• Program structure: Non‑employee directors are primarily compensated in RSUs; annual award increased from $300,000 to $325,000 effective April 18, 2024. Initial appointment grant is $550,000 in RSUs vesting over three years. Additional Annual Award RSUs are granted for Lead Independent Director and committee chair/member roles (dollar amounts converted into RSUs; vest on or before next annual meeting); director RSUs accelerate upon a Corporate Transaction .
• Cash fees: Coinbase generally does not pay cash retainers; cash shown in 2024 was for a special litigation committee (not applicable to Ehrsam) .

Performance Compensation

• Director equity awards are time‑based RSUs; no performance metrics are disclosed for director compensation .

RSU Grants and Vesting Detail

Other Directorships & Interlocks

• Public company boards: None disclosed for Mr. Ehrsam; he serves on private company boards .
• Interlocks/conflicts:
  • CEO Brian Armstrong is trustee of The Ehrsam 2014 Irrevocable Trust holding 2,958,393 Class B shares attributed to Armstrong’s beneficial ownership—indicating a trustee relationship involving shares associated with Ehrsam; this could create perceived voting influence linkages at the founder level .
  • Coinbase Ventures may co‑invest with entities affiliated with directors/officers; the proxy states that during the applicable period, none of the related parties had a direct or indirect material interest in such investments; related party transactions require Audit & Compliance Committee review/approval under written policy .

Expertise & Qualifications

• Crypto founder/operator; deep market knowledge and continuity from co‑founding Coinbase .
• Investing experience as General Partner at Paradigm .
• Technical and finance training: B.S. in Computer Science & Economics (Duke); earlier FX trading at Goldman Sachs .

Equity Ownership

• Significant insider ownership aligned with long‑term control structure.

Governance Assessment

• Strengths

  • Founder knowledge and crypto domain expertise; long tenure since 2013 enhances continuity and strategic oversight .
  • Independent director status; service on Nominating & Corporate Governance Committee supports board refreshment/succession planning oversight .
  • Material insider ownership (11.0% of total voting power) aligns interests with long‑term shareholders .

• Risks / RED FLAGS

  • Attendance shortfall: In 2024, Ehrsam attended “over 60%” of combined Board/committee meetings, below the commonly expected 75% threshold—this can signal engagement risk and may draw proxy advisory scrutiny. This warrants close monitoring if sustained .
  • Founder‑level voting entanglement: CEO Armstrong is trustee of an Ehrsam‑named trust holding 2,958,393 Class B shares, creating potential perception of intra‑founder voting influence; investors may scrutinize independence in sensitive votes given the controlled company context .
  • Section 16(a) timeliness: A late Form 4 filing was reported on Dec 5, 2023 for an open‑market sale by the Frederick Ernest Ehrsam III Living Trust on Nov 28, 2023—administrative lapse (company‑reported) .

• Director Pay Structure Signals

  • Equity‑heavy, time‑based RSUs with no performance metrics; 2024 stock award rose to $357,978 from $319,920 in 2023 (+~12%), consistent with program changes (Annual Award increased to $325,000 in April 2024) .
  • No cash retainer or meeting fees for Ehrsam in 2024; cash shown for other directors tied to a special litigation committee only .

• Related‑Party Exposure

  • The proxy discloses oversight mechanisms and indicates no material related‑party interest in Coinbase Ventures co‑investments during the applicable period; continue monitoring Paradigm relationships given sector overlap .

Overall: Ehrsam brings valuable founder/crypto expertise and meaningful ownership alignment, but 2024 attendance and intra‑founder trust/voting linkages are notable governance watch‑items for investor confidence .