Michael Colglazier
Virgin Galactic HoldingsAbout Michael Colglazier
Michael Colglazier (age 58) has served as Virgin Galactic’s Chief Executive Officer, President, and Director since July 2020. He holds a B.S. in Industrial Engineering from Stanford and an MBA from Harvard Business School . Under his leadership, SPCE launched commercial operations in 2023, retired Unity after two 2024 commercial flights, progressed Delta Class spaceship design and factory buildout, and tightened operating expenses to $384M in 2024 vs. $538M in 2023 . Pay-versus-performance disclosures show “compensation actually paid” (CAP) declining alongside TSR in 2022–2024; 2024 year-end stock price was $5.88 with a $3 value for a $100 initial TSR investment, evidencing alignment between realized pay and shareholder outcomes .
Company performance context (FY):
- Revenues and EBITDA (USD): see table. Values retrieved from S&P Global.
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | $2,312,000* | $6,800,000* | $7,036,000* |
| EBITDA ($) | -$488,886,000* | -$513,742,000* | -$361,162,000* |
Values retrieved from S&P Global.
Shareholder performance (selected items):
| Metric | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Year-end stock price ($) | $267.60 | $69.60 | $49.00 | $5.88 |
| Value of $100 initial TSR (cum.) | $116 | $30 | $21 | $3 |
Board role and independence: Colglazier is CEO and a board member (not independent). SPCE separates Chair and CEO roles (Chair: Ray Mabus), which mitigates dual-role governance concerns . He is not listed as a member of the standing board committees (Audit, Compensation, Nominating & Corporate Governance, Safety) -.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Disney Parks International | President & Managing Director | 2018–Jul 2020 | Led international theme parks; global strategy and operations experience . |
| Disneyland Resort | President | 2013–2018 | Led ~30,000 employees; drove record performance and growth . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| University of California, Irvine CEO Roundtable | Chairman | Current | External leadership network . |
| Six Flags Entertainment Corp. | Board nominee | 2025 | Nominated to stand for election at upcoming annual meeting . |
| Rice University | Engineering Advisory Board (past) | Prior | Advisory engagement . |
| California Travel & Tourism Commission | Commissioner, exec committee (past) | Prior | Public/private sector governance experience . |
Fixed Compensation
| Component | 2023 | 2024 | Notes |
|---|---|---|---|
| Base Salary ($) | 1,000,000 | 1,000,000 | No change 2024 vs. 2023. |
| Target Annual Bonus (% of base) | — | 125% | 2024 target bonus $1,250,000 . |
Performance Compensation
2024 Annual Incentive Program (AIP) design and outcome:
| Metric Category | Weight | Threshold | Target | Max | 2024 Payout as % of Weighted Target |
|---|---|---|---|---|---|
| Safety Culture | 20% | — | — | — | 20% (at/above target outcomes) . |
| Financial (Expenditure mgmt. vs. $594M budget) | 40% | — | — | — | 40% . |
| Delta Program Milestones (toward 2026 entry) | 40% | — | — | — | 42.5% . |
| Total Company Payout | 100% | 25% payout | 100% payout | 200% payout | 102.5% . |
CEO 2024 AIP result:
| Item | Value |
|---|---|
| Target bonus ($) | 1,250,000 . |
| Company factor | 102.5% . |
| Individual modifier | 130% . |
| Actual bonus paid ($) | 1,665,625 . |
Long-Term Incentive Program (LTI) – 2024 structure and payout:
| LTI Element | Weight | Key Performance Focus | Performance Period | Payout |
|---|---|---|---|---|
| Time-based RSUs (cash-settled) | 50% (CEO) | Retention, ownership alignment; 2024 awards vest 50% on 1st anniversary, 50% on 2nd; 2025 awards to move to 3-year ratable vesting . | Service | N/A (service-based). |
| LTIP Cash (performance) | 50% (CEO) | 50% Delta milestones + 50% Free Cash Flow to support program milestones | 1-year perf. (2024) + 1-year service (pay by Mar 15, 2026 if employed through 12/31/2025) | 105.5% of target . |
2024 CEO LTI grant values (target):
| Instrument | Target Value ($) |
|---|---|
| RSUs (cash-settled) | 3,000,000 . |
| LTIP Cash | 3,000,000 . |
| Total | 6,000,000 . |
Design alignment notes:
- Increased performance-based weighting for CEO to 50% in 2024; expanding to 50% for other NEOs in 2025, per shareholder feedback .
- Realizable value of outstanding LTI for NEOs was “less than 20%” of grant-date fair value as of 12/31/2024 (reflecting stock underperformance) .
- 2022 PSU and PSO hurdles have not been achieved as of 12/31/2024; 2022 PSU performance period ended March 2025 with zero payout .
Equity Ownership & Alignment
Beneficial ownership (as of 3/31/2025):
| Holder | Shares Beneficially Owned | % of Outstanding |
|---|---|---|
| Michael Colglazier | 57,638 (includes 33,476 held directly; 19,276 via family trusts; and up to 24,162 option shares vesting within 60 days) . | <1% . |
Capital base reference: 39,991,026 shares outstanding as of 3/31/2025 .
Outstanding awards (as of 12/31/2024):
| Award Type | Key Terms | Quantity/Status |
|---|---|---|
| Time-based options (7/20/2020 grant) | 60-month monthly vesting; $459.60 strike; exp. 7/20/2030 | 22,068 exercisable; 2,932 unexercisable (post split) . |
| Performance stock options (3/17/2022) | Vest on stock price hurdles over 4 years; $179.80 strike; exp. 3/17/2032 | 5,071 threshold PSOs eligible (tracking at zero as of 12/31/2024) . |
| RSUs (various 2021–2024) | 2024 awards vest 50% after 1 year and 50% after 2 years; cash-settled | 86,206 granted 3/13/2024; 50% vest 3/13/2025 & 50% on 3/13/2026 (cash-settled) . |
| PSUs (2022/2023) | Stock price hurdles over 3 years | 2022 PSU period ended Mar 2025 with zero; 2023 PSU tracking zero as of 12/31/2024 . |
Ownership guidelines and trading restrictions:
- CEO stock ownership guideline: 5x base salary; counts actual shares and unvested RSUs; options/PSUs do not count .
- Anti-hedging and anti-pledging policies prohibit hedging and pledging by officers and directors .
Vesting/selling pressure considerations:
- 2024 RSUs are cash-settled, reducing secondary share sale pressure at vesting vs. share-settled RSUs .
- Options largely out-of-the-money at 12/31/2024 strikes ($459.60; $179.80), limiting near-term exercise-driven sales unless stock appreciates substantially .
Employment Terms
Employment agreement (7/10/2020) with a 5-year initial term; CEO serves as President/CEO and is nominated to the board during the term absent cause .
Key economics:
- Base salary: $1,000,000 initial, with annual review .
- Target bonus: 100% of salary under the agreement (SPCE set 2024 AIP target at 125% of salary) .
- Sign-on: $1,000,000 cash in two tranches; legal fee reimbursement up to $15,000; right to join a company spaceflight with three guests (tax gross-up) .
- Equity on hire (pre-reverse split counts): stock option 500,000 shares (now split-adjusted), RSUs 70,000 and 500,000 (fully vested) .
- Clawbacks: SEC/NYSE-compliant policy plus broader discretionary clawback for misconduct, misstatements, and reputational harm within specified lookback windows .
- Hedging/pledging prohibited; insider trading policy in place .
Severance and change-in-control (CIC) protections (double-trigger equity acceleration under CIC; values as if terminated 12/31/2024):
| Scenario | Cash | Equity Vesting | Benefits | Total |
|---|---|---|---|---|
| Qualifying termination (non-CIC) | Salary + target bonus; pro-rated bonus | Time-based equity accelerated for next 12 months | 12 months health coverage | $4,292,338 (CEO) . |
| CIC + qualifying termination | 2x (salary + target bonus); pro-rated bonus | Full acceleration of time-based equity | 18 months health coverage | $6,887,610 (CEO) . |
Other restrictive covenants: confidentiality and non-solicitation; a “best-pay” 280G provision (pay full or cut to avoid excise tax, whichever is better after-tax) .
Board Governance (Director Service, Committee Roles, Independence)
- Board service: Director since July 2020; CEO designee seat per Stockholders’ Agreement .
- Leadership: Separate Chair (Ray Mabus); board believes this structure best balances oversight and management .
- Committee memberships: CEO is not listed on Audit, Compensation, Nominating & Corporate Governance, or Safety committees -.
- Independence: Seven of nine director nominees are independent; as an executive, the CEO is not independent .
- Attendance: Board met 9x in 2024; all incumbents attended ≥75% of meetings; independent directors hold executive sessions .
Director compensation note: CEO receives executive pay (no non-employee director retainers). Non-employee director program includes cash retainers and annual RSUs (chair premium), with 5x retainer stock ownership guideline .
Compensation Structure Analysis
- Cash vs. equity mix: CEO target pay ~88% variable; increased performance weighting (50% of LTI) and introduced cash LTIP tied to Delta milestones and FCF; aligns with capital-intensive, pre-scale business model .
- From options to RSUs: Greater RSU usage with shorter two-year vest in 2024 (moving to three-year vesting in 2025) improves retention but lowers risk relative to options; 2024 RSUs are cash-settled (minimizes future share sales) .
- Realizable vs. grant-date values: Management discloses realizable LTI values <20% of grant-date values, and 2022 PSU/PSO hurdles tracking at zero—evidence of strong pay-for-performance sensitivity in a volatile stock .
- Shareholder feedback: 2024 say-on-pay passed with 80% support; company increased performance-based portions and continued engagement with top holders .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay (2024): 80% approval; engagement with top 25 institutions (~80% of institutional holdings; ~35% of total outstanding) drove changes to increase performance-based LTI weighting and enhance disclosure .
Compensation Peer Group & Committee Oversight
- 2024 peer group updated to better fit size/model (e.g., add Archer, Lucid, Sonos, Wheels Up; later replace Fisker with Blade for 2025) .
- Independent consultant: Meridian in early 2024; transitioned to Pay Governance in late 2024; committee assessed independence (no conflicts) .
- Compensation Committee (2025): Diana Strandberg (Chair), Henio Arcangeli Jr., Craig Kreeger; fully independent .
Risk Indicators & Red Flags
- Anti-hedging and anti-pledging policy in place for executives/directors .
- Clawback policy exceeds SEC minimums (covers financial restatements, non-financial performance misstatements, and material misconduct with specified lookbacks) .
- No single-trigger CIC severance; equity acceleration is double-trigger (CIC + qualifying termination) .
- No option repricings without shareholder approval .
Employment & Contracts (Retention Risk)
- Initial term (5 years from July 2020) suggests renewal/renegotiation timeframe around mid-2025; severance/CIC protections and high at-risk pay support retention but market volatility and underwater options pose retention challenges .
- Non-solicitation and confidentiality provisions standard; no explicit non-compete disclosed .
Director Service History and Dual-Role Implications
- Director since July 2020; as CEO designee, serves on the board but not on independent committees -.
- Separation of Chair and CEO reduces concentration of power and mitigates independence concerns common to CEO/Chair duality .
- Board met nine times in 2024; independent directors hold executive sessions, further balancing management influence .
Investment Implications
- Alignment: Strong pay-for-performance link—CAP and PSU/PSO outcomes track TSR; 2024 AIP and 2024 LTIP were modestly above target due to milestone execution, not share-price appreciation, aligning incentives with operational scale-up toward 2026 Delta entry .
- Selling pressure: 2024 RSUs are cash-settled and options are far out-of-the-money at 12/31/2024 strikes, reducing near-term selling pressure from vesting or exercises unless the stock appreciates materially .
- Retention: Competitive severance and double-trigger CIC protections plus increased performance-based LTI support retention; however, low current realizable values and underwater equity raise retention and motivation risks if stock underperforms or Delta milestones slip .
- Governance: Independent Chair, robust clawback, and anti-hedge/pledge policies are shareholder-friendly; 80% say-on-pay suggests moderate investor support with ongoing engagement shaping LTI design .