Leaked SpaceX documents have unveiled the complex and restrictive terms surrounding stock awards for its employees, potentially impacting their financial well-being. These documents, obtained and reviewed by an international media outlet, bring to light SpaceX’s control over employee stock sales, even after they leave the company.
Forbidding Stock Sales for Alleged Misbehavior
One striking revelation from the leaked documents is SpaceX’s authority to prohibit employees from selling their stock if the company deems they have engaged in misconduct or violated company policies. Such conditions severely limit employees’ ability to liquidate their vested shares, leaving them financially constrained.
Similar to many tech firms, SpaceX offers stock options and restricted stock units (RSUs) as part of its compensation package. However, the inability to sell shares without the company’s consent presents a tax conundrum for employees. Furthermore, the requirement to wait for SpaceX to go public further complicates the situation, prolonging the period during which employees cannot access the value of their shares.
Leaked SpaceX Documents Raise Concerns Over Control and Financial Security
The restrictive policies outlined in the leaked documents raise concerns about SpaceX’s control over its employees, even post-employment. Employees risk having their valuable stock rendered worthless if they are banned from participating in tender offers or face stock repurchases at nominal prices, especially if terminated “for cause.” The conditions highlight the precarious nature of stock compensation at private companies like SpaceX.
SpaceX stands as one of the most valuable privately held corporations globally, reaching a valuation of $180 billion by December of last year. Similar to other private enterprises, its stock is divided into preferred and common stock. While employees are granted the latter, preferred stock is typically held by institutional investors and entities associated with Musk, offering additional privileges such as liquidation preferences and dividends. The common stock is further categorized into three classes: Class A, B, and C. In line with an equity incentive scheme ratified by the SpaceX board in March 2015, extending until 2025, employees are allocated Class C stock, which carries no voting rights.
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