The Compensation Mix Decision: What SpaceX’s Executives Can Teach You
When SpaceX filed its S-1 (the registration statement a company must file with the SEC before going public), it revealed something tech professionals almost never get to see: three executives at the same company, looking at the same stock, making three very different decisions about how to get paid.
CEO Elon Musk, President and COO Gwynne Shotwell, and CFO Bret Johnsen each landed in a different place, from a nominal salary with the upside in equity, to a mix of cash and stock, to a paycheck taken entirely in cash. Their filings give a rare, concrete look at the different compensation elections made by three executives at the same company.
The dollar amounts are far larger than most people will see, but the underlying decision is one many tech professionals face in a smaller form.
Sometimes the choice is between base salary and equity compensation. Other times it is within the equity itself, between restricted stock units (RSUs) and stock options, which come as either incentive stock options (ISOs) or non-qualified stock options (NSOs). Sometimes you get to decide only one of the two, and less commonly you get to decide both. It is worth seeing what these executives did and then thinking through how the same trade-offs apply to you.
What Did the SpaceX Executives Do?
Start with Musk. In 2026, he was granted one billion performance-based shares, vesting only if SpaceX hits a string of market-capitalization milestones and establishes a permanent human colony on Mars. His salary for the prior year was $54,080, and he received no new equity grants that year at all. Musk already held a stake in SpaceX worth hundreds of billions of dollars before this new grant. This shows that Musk’s SpaceX compensation comes from his existing and future shares, not his paycheck. While there wasn’t a formal election on record the way there was for other executives, Musk’s compensation structure differs materially from the elections described for Shotwell and Johnsen. Given his substantial existing equity ownership, Musk’s circumstances are materially different from those of most employees evaluating their compensation mix.
Shotwell and Johnsen both had the option to elect between salary and RSUs as part of their 2025 base compensation. Shotwell’s base salary was set at $1,080,000, and she elected to receive $353,077 of it in cash, taking the remainder as RSUs. Johnsen’s base salary was $825,000, and he chose the opposite path, taking it entirely in cash. Two executives at the same company landed on opposite decisions. This highlights that these choices are personal and depend on several factors that outsiders can’t easily see.
Shotwell was given an additional opportunity to pick her equity compensation mix as part of SpaceX’s long-term incentive election program, with a $5 million target award. For the smaller 20% slice of that award, she could choose between cash and RSUs vesting after six months, and she chose RSUs. For the larger 80% slice, her choices were cash, RSUs vesting over five years, or stock options vesting over six years, and she chose stock options. In short, Shotwell passed on cash entirely across both parts of her award, choosing RSUs for the short-term, faster-vesting piece and options for the larger, longer-term piece. She leaned toward equity in both her salary election and her long-term incentive award.
Should You Copy Them?
So, is it useful to mimic the decisions these executives made on their compensation mix? Probably not. Their financial lives are far different from those of the average tech professional, and so there’s much more flexibility in the decisions they get to make.
It’s interesting to watch and read about these decisions, but it’s wise to evaluate your own circumstances instead of following the exact decisions of others.
Then, how should you approach the decision for yourself? You’re most likely to face this choice in one of two scenarios: when you’re negotiating a new offer, or when you’re at a company that builds an annual election into its compensation program.
A few key questions can help you weigh your decision:
What Trade-Offs Are You Facing?
When it comes to choosing between salary and equity compensation, salary generally provides more predictable cash compensation, while equity involves additional risks and the potential for appreciation. Equity has a much wider range of possible outcomes.
The trade-off between RSUs and options is less clear. There is a riskier option and a more conservative one, like there is in the salary vs. equity decision. RSUs generally provide value upon vesting as long as the underlying shares have value, while stock options are more sensitive to changes in the underlying stock price and may provide greater upside potential but can also expire without value. Compared with stock options, RSUs generally have less risk of expiring without value because vested RSUs typically result in shares, although the value of those shares can rise or fall with the company’s stock price. Stock options work differently. They generally come with an exercise price, set at the stock’s value on the day you’re granted the options. That means the options only have value if the stock price rises above that exercise price. If the stock price falls below the exercise price, you won’t exercise your option, since that would mean paying more for the stock than it’s currently worth on the open market. However, if the price does rise above the exercise price, options may provide greater upside potential.
What Stage Is the Company In, and How Likely Are You to Get More Equity Later?
To draw a sharp contrast, we can compare start-ups to the largest tech companies. Depending on the employer and its compensation program, a new-hire grant may be one of an employee’s larger equity awards. Start-up companies may offer fewer or less frequent additional equity to existing employees. Some larger tech companies incorporate equity refresh grants into annual compensation reviews. If you’re unlikely to see more equity for years, it’s worth weighing that into your compensation mix decision.
What Is Your Current Financial Position?
Knowing your financial position matters for this decision. Calculating your net worth, along with your income and expenses, is a good starting point for understanding where you stand and how your finances are trending. As part of calculating your net worth, you should also review the existing value of the equity you already have in your company. If you already have a significant proportion of your wealth tied to the company stock, that can influence a decision to take less equity exposure moving forward. Clarity on your financial situation can help you evaluate whether you have the flexibility to take on more risk in your compensation mix, or whether a more cash-oriented or less equity-dependent compensation mix may be appropriate.
The Right Mix Is Personal
The three SpaceX executives reached different answers, illustrating how compensation decisions can differ based on an individual’s circumstances, and the same is true for you. There is no single right compensation mix. The right one depends on where you stand today: how much of your wealth is already tied to your company, whether your salary alone covers your needs, and how much room you have to take on risk. Start with a clear picture of your finances, weigh each choice against that picture, and let your own circumstances, not someone else’s headline decision, guide where you land.
If you are thinking about how your compensation mix fits into your financial picture, I work with tech professionals on questions just like this. You can schedule a complimentary consultation directly.
This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant. Please consult your investment professional regarding your unique situation.
Michal A. Zyla
Financial Advisor
CFP®