Washington, United States. SpaceX’s board has approved a compensation plan for founder Elon Musk that links major equity awards to valuation targets and milestones including a permanent human colony on Mars and space-based data centers, according to a confidential SEC filing reviewed by Reuters.
The plan was disclosed in excerpts from SpaceX’s confidential registration statement filed in recent weeks with the Securities and Exchange Commission.
Details disclosed in confidential filing
The details of Musk’s compensation package were revealed in the company’s confidential registration statement reviewed by Reuters last week. Reuters reported that the rewards underscore the challenge of holding the attention of Musk as he prepares to take SpaceX public, and corporate governance experts said the package could potentially create tensions with Tesla shareholders, where Musk is CEO.
Mars colony and valuation targets
The filing excerpts said the SpaceX board in January approved a pay package that would award 200 million in super-voting restricted shares if the company reaches a market value of $7.5 trillion and establishes a permanent human colony on Mars with at least 1 million people.
The filing also said Musk could receive as many as 60.4 million restricted shares awarded on March 23 if SpaceX meets separate valuation goals and operates data centers in space providing at least 100 terawatts of compute capacity, described as equal to 100,000 gigawatts, or about 100,000 one-gigawatt nuclear reactors running all at once.
Both awards would come with super-voting Class B restricted stock, which carries 10 votes for every one Class A share, and would vest in tranches as the company’s value rises.
Conditions, salary, and existing options
The filing said Musk would not receive any shares if SpaceX fails to reach the valuation targets, which are not tied to a specific timeline other than his continued employment. It also said he has received a nominal salary from SpaceX of $54,080 per year since 2019.
As of December 31, the filing said Musk held 68.8 million previously awarded Class B stock options with a strike price of about $42 that expire in 2031.
IPO timing and company responses
The value of the pay package could not be determined because SpaceX is privately held. Reuters has reported that SpaceX is targeting an initial public offering around June 28, which could value the company at about $1.75 trillion.
SpaceX and Tesla did not respond to requests for comment. The Information and Reuters have previously reported SpaceX pay targets for Musk linked to a Mars colony and to space data centers. The filing also said Musk was worth $776 billion by Forbes’ estimate and owned about 20% of Tesla stock as of November.
What do you think investors should focus on most when evaluating compensation plans tied to long-term, high-risk milestones?
