Remember the legal brawl CEO Elon Musk faced over his $56 billion moonshot pay package at Tesla? As SpaceX prepares to go public in a $75 billion initial public offering next week, Musk is pushing the limits of his pay package into a whole other universe, and this time, he’s designed it so that he will never have to fight that kind of battle again.
What sets Musk’s SpaceX pay package apart is how thoroughly insulated it is from the kind of lawsuit that nearly cost Musk his, at-the-time, unprecedented award from Tesla, which was the largest in U.S. corporate history. First, the Tesla board granted Musk the 2018 award after the company was already public, which allowed a shareholder to argue it was an after-the-fact transfer of wealth from investors who never signed off. A Delaware Chancery Court judge agreed and voided it. This time, Musk’s massive stock grant, with a potential $1.1 trillion value, is spelled out clearly in SpaceX’s IPO registration statement for any investor to read about before buying a single share.
To boot, SpaceX is no longer incorporated in Delaware, the state whose court struck down the Tesla package. In fact, Musk very publicly moved SpaceX to Texas after the court rescinded his Tesla award, where a shareholder would need to own 3% of the company—a multibillion-dollar stake at SpaceX’s projected $1.8 trillion valuation—merely to bring a legal claim, which a special Texas business court would hear with no jury.
