Musk's SpaceX pay tied to Mars colonization, space data centers
What's the story
SpaceX has revealed a unique compensation plan for its founder, Elon Musk. The plan, which was recently disclosed in a confidential filing with the US Securities and Exchange Commission (SEC), ties Musk's pay to ambitious goals like colonizing Mars and setting up data centers in space. The move highlights SpaceX's challenge of keeping its visionary leader engaged as it prepares for an initial public offering (IPO).
Pay structure
Musk's pay package linked to lofty goals
The SpaceX board has approved a pay package for Musk that promises 200 million in super-voting restricted shares if the company reaches a market cap of $7.5 trillion and establishes a permanent human settlement on Mars with at least one million inhabitants. The plan also includes up to 60.4 million in restricted shares, awarded on March 23, if SpaceX meets separate valuation targets and sets up space-based data centers providing at least 100 terawatts of compute capacity.
Share details
Shares come with super-voting Class B restricted stock
Both the share awards in Musk's pay package come with super-voting Class B restricted stock. Each of these shares comes with 10 votes to every one Class A share. The awards will vest in tranches as the company's value increases. However, if SpaceX fails to meet the board's ambitious valuation targets, Musk won't receive any shares.
Financial details
Musk's current salary and stock options
Since 2019, Musk has been drawing a nominal salary of $54,080 from SpaceX. He also holds 68.8 million in previously awarded Class B stock options with a strike price of about $42 that expire in 2031. This arrangement allows him to pocket any profit above this amount if he exercises the options before their expiration date.
Future prospects
Potential IPO and performance targets impact on Musk's wealth
SpaceX is eyeing an IPO around Musk's birthday on June 28, which could value the company at about $1.75 trillion. This would significantly boost Musk's already massive net worth of $776 billion, as estimated by Forbes. The ambitious performance targets set for him at Tesla, another company he runs, could double his wealth if he achieves the business milestones.