“Leaked SpaceX Documents Show Company Forbids Employees to Sell Stock If It Deems They’ve Misbehaved: ‘An Act of Dishonesty against the Company’ Is among the Violations Cited”, 2024-03-15 (; backlinks):
SpaceX requires employees to agree to some unusual terms related to their stock awards, which have a chilling effect on staff, according to sources and internal documents viewed by TechCrunch.
That includes a provision that allows SpaceX the right to purchase back vested shares within a 6-month period following an employee leaving the company for any reason. SpaceX also gives itself the right to ban past and present employees from participating in tender offers if they are deemed to have committed “an act of dishonesty against the company” or to have violated written company policies, among other reasons.
Employees often aren’t aware of the “dishonesty” condition when they initially sign up on the equity compensation management platform, one former employee said.
If SpaceX bars an employee from selling stock in the tender offers, the person would have to wait until SpaceX goes public to realize cash from the shares—and it’s unclear when that will happen, if it ever does.
SpaceX did not respond to multiple requests for comment.
…Indeed, at SpaceX, if an employee was fired “for cause”, the company stated it can repurchase their stock for a price of $0 per share, according to documents viewed by TechCrunch.
“It sounds unusual to have [a] cause type exclusion provision in a tender offer agreement”, attorney and stock options expert Mary Russell told TechCrunch. She said it is also unusual for a traditional venture-based startup to have repurchase rights for vested shares that are unrelated to a bad-actor-type “for cause” termination.
These terms “keep everyone under their control, even if they have left the company”, one former employee said, because employees don’t want to be forced to return their valuable SpaceX stock for no compensation. “And since there is no urgency by SpaceX to go public, being banned from tender offers effectively zeros out your shares, at least for a long time. Even though you paid thousands to cover the taxes. They also try and force a non-disparagement agreement on you when you leave, either with a carrot, or a stick if they have one”, the person said.