Elon Musk designs a "litigation defense" compensation plan for SpaceX, with a potential value of up to $1.1 trillion

Mars Finance News reported that on June 6, as SpaceX is set to go public with an estimated valuation of about $1.75 trillion, Elon Musk has designed an equity incentive scheme for himself with potential value as high as $1.1 trillion. By adjusting the company’s governance structure and place of registration, he has significantly increased the difficulty for future shareholders to challenge the plan.

According to SpaceX’s prospectus, the 1.3 billion Class B super-voting shares that Musk receives are currently worth about $1,750 billion (approximately $1.75 trillion). If all targets are met, the potential value could rise to $1.1 trillion. The incentive requirements stipulate that SpaceX’s market capitalization must reach up to $7.5 trillion, and include goals such as establishing a permanent Mars colony with a population of 1 million and building data centers with annual computing power of 100 terawatts.

The report said that, unlike Tesla’s 56 billion USD compensation plan in 2018, which was overturned by Delaware courts, SpaceX has moved its registration to Texas and disclosed the relevant arrangements in advance in its prospectus. Under Texas law, shareholders must hold at least 3% of the shares to initiate a lawsuit. At SpaceX’s estimated valuation of about $1.8 trillion, that corresponds to a shareholding amount worth several tens of billions of dollars. In addition, even if the performance targets are not completed, Musk can immediately obtain voting rights for the relevant shares.

The prospectus shows that Musk currently holds about 85.1% of SpaceX’s voting rights, and after the IPO he will still retain about 82.4% of the voting rights, maintaining board control through Class B shares. Several governance and compensation experts said the core purpose of the plan is not only to incentivize Musk to achieve long-term goals, but also to ensure he continues to firmly maintain control of SpaceX. Analysts noted that SpaceX will operate as a “controlled public company,” and ordinary shareholders will not be able to enjoy the same governance protections as those of typical NASDAQ-listed companies.