SpaceX imposes unique stock award terms on employees, which has raised concerns among staff, as per sources and internal documents reviewed by TechCrunch.
One provision allows SpaceX to repurchase vested shares within six months of an employee leaving the company for any reason. Additionally, SpaceX reserves the right to exclude employees from tender offers for reasons including alleged dishonesty or policy violations.
Many employees are unaware of these conditions when they initially sign up for the equity compensation management platform, as mentioned by a former employee.
Employees barred from participating in tender offers must wait until SpaceX goes public to cash out their shares, creating uncertainty around the timeline for such an event.
SpaceX did not respond to requests for comment.
Tax implications for employees holding SpaceX shares
SpaceX, like other tech firms, includes stock options and restricted stock units (RSUs) in its compensation packages to attract top talent, which has paid off with a workforce that is driving innovation in aerospace.
Employees at private companies like SpaceX can’t sell their stock without the company’s approval, limiting their ability to convert this part of their compensation into cash. SpaceX typically holds buyback events twice a year, offering employees opportunities to liquidate appreciated assets since vesting.
Terms and conditions surrounding stock compensation can vary at startups, but employees generally have restrictions on selling their shares until the company allows it. SpaceX’s repurchase rights for vested shares in certain scenarios, like a termination “for cause,” raise concerns among legal experts.
Former employees express frustration over limitations that can nullify the value of their SpaceX stock, especially in the absence of a firm IPO date.
SpaceX names actions by CEO Elon Musk as a ‘risk factor’ in its disclosures to employees.
The risk document highlights the company’s dependency on Musk’s leadership and acknowledges the impact of his public statements on SpaceX’s market position. It also references a settlement between Musk and the SEC that could affect SpaceX’s financing options.
The document underscores the uncertainty around the future public market for SpaceX’s stock and its valuation, considering the unique rights attached to preferred and common stock classes.
