The space race is getting more complex. Instead of Jeff Bezos and Elon Musk just trying to one-up each other with space-related projects, they\u2019re trying to land and secure the best talent to make that happen.<\/p>\n
To compete with the fact that many SpaceX employees became millionaires following the company\u2019s recent IPO, Blue Origin is reportedly rolling out<\/a> a more generous equity plan after internal backlash over an older scheme that left workers holding effectively worthless options while their counterparts at SpaceX got rich, according to agreements obtained by Business Insider.<\/p>\n But the new plan comes with an unusual non-compete clause: Employees would have to forfeit all of their stock options if they join a competitor (say, SpaceX) within 18 months of leaving the company, according to Business Insider.\u00a0<\/p>\n Clearly, the timing isn\u2019t a coincidence. Just weeks ago, Blue Origin\u2019s biggest competitor, SpaceX, went public on the Nasdaq on June 12 in the largest IPO in history, turning an estimated 4,400 current and former employees into paper millionaires, from executives down to welders and machinists<\/a> who\u2019d been granted stock over the years. About 400 of them are now worth $100 million or more<\/a>.<\/p>\n For a Blue Origin employee weighing a bigger equity package given that context, the trade-off is sharper than it looks, Evan Mills, an associate financial advisor at Scholar Financial Advising who counts SpaceX employees among his clients, told Fortune.\u00a0<\/p>\n A clause like this means \u201cyou\u2019re basically trading off the upside you can have with the stock against the mobility you give up if you leave for a competitor,\u201d he said. Vested or unvested, an employee who leaves for a rival \u201ccould lose everything they gained.\u201d The equity, he added, \u201cisn\u2019t just illiquid, it\u2019s conditional.\u201d<\/p>\n Blue Origin didn\u2019t immediately respond to Fortune\u2019s request for comment.<\/p>\n That dilemma is what he called \u201cgolden handcuffs,\u201d meaning there is real upside if the company performs well, but no clean way out if you want to keep the equity.<\/p>\n So one company just showed its workforce exactly what employee equity is worth when there\u2019s a way to cash out. The other is offering bigger packages while keeping tight control over whether, when, and how employees ever see the money.<\/p>\n Employees never actually own the stock<\/strong><\/p>\n What\u2019s most interesting about Blue Origin\u2019s equity plan is how it actually works. According to Business Insider, Blue Origin employees would never actually own company shares.\u00a0<\/p>\n Once options vest and are exercised during a liquidity event (like an IPO, company sale, or some funding rounds) the shares are \u201cimmediately and mandatorily\u201d repurchased by Blue Origin, which also has \u201csole discretion\u201d about whether a given funding round even qualifies as a liquidity event.<\/p>\n In other words, the company controls both the exit and the price of the shares. The options are offered at a fixed price of $9.50, vest up to 25% in the first year, and then in quarterly installments, according to BI. They expire 18 months after an employee leaves if no liquidity event has happened, separate from the non-compete.\u00a0<\/p>\n