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Investors have paid a lot of attention to Elon Musk's pay package at Tesla (NASDAQ: TSLA), but they might want to look at a few of the incentives he has at SpaceX as well.
Ahead of the rocket ship (and AI) company's initial public offering, details of its confidential registration statement with the Securities and Exchange Commission are leaking out (1). Among those? Should Musk succeed in establishing a colony on Mars with at least 1 million people, along with building SpaceX's market value to $7.5 trillion, he would be in line to receive 200 million super-voting restricted shares in the company, according to Reuters, which viewed the filing.
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SpaceX is expected to IPO with a valuation of $1.75 trillion.
Musk would also be eligible for 60.4 million restricted shares if SpaceX reaches a different valuation and begins operating data centers in space that generate at least 100 terawatts of compute capacity.
(Musk, by the way, doesn't need those shares to be firmly in command of directing SpaceX's trajectory. The IPO will introduce a dual-class share structure. Musk will hold Class B shares with 10 votes each, ensuring he retains approximately 79% of the voting power (2).)
Musk has long evangelized building a colony on Mars – and he has an aggressive, if somewhat unrealistic, timeline to make it happen. Initially, he talked of having this done by 2050, by building a fleet of 1,000 Starships and launching three per day (3) to send people on their way. And once you get there, he said, there would be plenty of jobs (4) waiting for you.
However, he warned in an April 2022 interview (5) with TED curator Chris Anderson, life on Mars will be "dangerous, cramped, difficult, hard work," and "you might not make it back … But it'll be glorious."
NASA is less optimistic about the timeline Musk has given, saying it hopes to land the first humans on Mars by the late 2030s (6) (or possibly early 2040s), but it intentionally plans to keep the numbers small for some time.
It's worth noting that the Starship spacecraft is still in development at SpaceX, so the chances of building 1,000 of them and launching three per day in the next 2.5 decades is low.
While Musk has made big claims about his Mars timeline, the terms of his compensation goals ignore those. None of the bonuses is tied to a specific time frame and will remain in effect for as long as Musk is employed by SpaceX.
Like his pay package at Tesla, he will only receive the shares if he completes all of the results for each tier. (So, for instance, if the company's valuation hits $7.5 trillion, but there are only 750,000 people who can call themselves Martians, he will not receive the bonus.)
It's a familiar pattern for Musk. In 2018, he set ambitious goals at Tesla, tying his pay package to those milestones (7). In April, he registered roughly 304 million shares after hitting those goals (8). Last November, the company approved a new pay plan for its CEO with a possible total value of $1 trillion for goals such as the deployment of robotaxis and humanoid robots, and raising the company's market capitalization to $8.5 trillion (9).
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Reuters (1),(7); Wealth Management (2); X (3),(4); YouTube (5); ABC News (6); Barron's (8); The Guardian (9)
This article originally appeared on Moneywise.com under the title: SpaceX will pay Elon Musk a bonus if he gets at least 1 million people to live on Mars — here's the plan
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