According to sources and internal documents reviewed by TechCrunch, SpaceX imposes unique terms on its employees regarding their stock awards, which reportedly have a chilling effect on staff. These terms include the company’s right to repurchase vested shares within six months of an employee leaving, regardless of the reason for departure. Additionally, SpaceX reserves the right to prohibit both current and former employees from participating in tender offers if they are found to have violated company policies or engaged in dishonest behavior.
Former employees claim that many are unaware of these conditions when initially signing up for the equity compensation management platform. If SpaceX prohibits an employee from selling stock during tender offers, they may have to wait until the company goes public to cash in their shares, with the timing of such an event uncertain.
Despite requests for comment, SpaceX did not respond to inquiries from TechCrunch.
Like many tech companies, SpaceX offers stock options and restricted stock units (RSUs) as part of its compensation package to attract talent. However, unlike public companies, stock in private companies cannot be freely sold without the company’s approval. SpaceX typically holds buyback events twice a year, allowing employees opportunities to liquidate assets that have likely appreciated since the vesting date.
However, there are additional conditions attached to employee stock compensation, and employees may find their stock subject to repurchase if they are terminated “for cause.” This provision, which allows SpaceX to repurchase shares at a nominal price, is considered unusual for traditional startup ventures.
These conditions, as one former employee suggests, effectively keep employees under SpaceX’s control even after they leave the company, as the inability to participate in tender offers diminishes the value of their shares. The company also reportedly attempts to enforce non-disparagement agreements upon employee departure.
SpaceX also acknowledges various risks associated with its operations, including its reliance on CEO Elon Musk, in documents provided to employees. The company notes that Musk’s actions or public statements could impact SpaceX’s market capitalization, citing a $40 million settlement between Musk and the SEC related to his tweets about Tesla. Additionally, there is a risk that there may never be a public market for SpaceX’s common stock, potentially affecting employees’ ability to sell their shares.
Despite these challenges, SpaceX remains one of the most valuable private companies globally, with a valuation reaching $180 billion as of December last year. Employees typically receive Class C non-voting stock, while preferred stock, with superior rights, is held by institutional investors and entities associated with Musk.
