More than 1,000 current and former SpaceX employees have organized to negotiate reduced advisory fees from wealth management firms and private banks, targeting rates below 0.5% of assets under management. The standard industry rate sits around 1% AUM. On the equity windfalls expected from SpaceX's IPO, the difference could mean millions of dollars per person over time.
SpaceX has adjusted its IPO valuation target to a minimum of $1.8 trillion, planning to raise up to $75 billion through the public offering. Wall Street banks are expected to earn around $500 million in underwriting fees; SpaceX executives are also negotiating those fees down. The company has reserved up to 5% of IPO shares for certain employees and their friends and family through a directed share program. That allocation, applied to a $75 billion raise, would translate to billions in shares set aside for insiders and their networks.
Wealth management fees have historically been non-negotiable for individuals. A coordinated group of over 1,000 people, each expecting significant equity payouts from one of the most anticipated IPOs in history, changes the dynamic. Employees are also exploring advanced tax-saving strategies in anticipation of the wealth creation from the public listing.