SpaceX's board of directors has approved a sweeping compensation plan for founder and CEO Elon Musk that ties stock awards to the company's goals of colonising Mars and operating data centres in outer space, according to a Reuters report citing confidential registration filings with the U.S. Securities and Exchange Commission.
The plan, approved by the board in January, would award Musk up to 200 million super-voting restricted shares if SpaceX reaches a market valuation of $7.5 trillion and establishes a permanent human settlement on Mars with at least one million residents. A separate component of the package could grant up to 60.4 million restricted shares from an award dated March 23, contingent on the company meeting independent valuation targets and delivering at least 100 terawatts of orbital computing power through space-based data centres. 100 terawatts equals 100,000 gigawatts, or approximately 100,000 nuclear reactors.
Musk would receive none of those shares if SpaceX fails to hit the board’s targets. The plan does not have a calendar deadline, except that he must remain at the company. SpaceX cannot place a precise dollar value on the package since its shares do not currently trade on a public market.
IPO Preparations and Existing Holdings
The compensation plan comes as SpaceX reportedly prepares for an initial public offering around June 28, Musk's birthday, at a potential valuation of about $1.75 trillion. As of December 31, Musk held 68.8 million previously awarded Class B stock options with a strike price of about $42 and an expiration date of 2031, allowing him to pocket any profit above that amount if exercised before the options lapse.
Musk is currently worth approximately $776 billion according to Forbes. Since 2019, SpaceX has paid him a yearly salary of $54,080.
Dual-Company Governance Concerns
Corporate governance experts have warned that investors at both SpaceX and Tesla may question how effectively Musk allocates his time when both firms have massive performance-linked incentives tied to the same individual. Eric Hoffmann, chief data officer at Farient Advisors, noted: "What's interesting about this situation is now, SpaceX and Tesla, both effectively controlled by Elon Musk, are now bidding against each other for his attention."
Equilar Director of Research Courtney Yu highlighted the uniqueness of using non-financial metrics: "It does help with setting expectations for investors as to what the goals of the company really are."
Additionally, the California Coastal Commission has settled a lawsuit with SpaceX after the company accused the agency of political bias. The settlement agreement stated that the Commission agreed not to consider "the perceived political beliefs, political speech, or labor practices of SpaceX or its officers" in any regulatory actions concerning SpaceX.
