DEF 14A of Virgin Galactic Holdings, Inc
Filed Apr 29, 2024 · FY20230001308179-24-000617
Information about Board Nominees
Information about Board Nominees The following pages contain certain biographical information as of the date of this Proxy Statement for each nominee for director, including all positions held, the principal occupation and business experience for the past 5 years and the names of other publicly-held companies of which the nominee currently serves as a director or has served as a director during the past 5 years. We believe that all of our nominees demonstrate: personal and professional integrity; satisfactory levels of education and/or business experience; broad-based business acumen; an appropriate level of understanding of our business and industry and other industries relevant to our business; the ability and willingness to devote adequate time to the work of our Board of Directors and its committees; skills and personality that complement those of our other directors, which helps build a board that is effective, collegial and responsive to the needs of our Company; strategic thinking and a willingness to share ideas; a diversity of experiences, expertise and background; and the ability to represent the interests of all of our stockholders. The information presented below regarding each nominee also sets forth specific experience, qualifications, attributes and skills that led our Board of Directors to the conclusion that such individual should serve as a director in light of our business and structure.
Information about Board Nominees
| Board Nominees | | | | Raymond Mabus, Jr. | | | Michael Colglazier | | | Henio Arcangeli, Jr. | | | Luigi Brambilla | | | Tina Jonas | | | Craig Kreeger | | | Wanda Sigur | | | Diana Strandberg | | | W. Gilbert (Gil) West |
Information about Board Nominees
| 2024 Proxy Statement | 15 |
Information about Board Nominees
Skills, Experience, Qualifications and Attributes of 2024 Director Nominees
Information about Board Nominees
| | | | | | | | | | | | | | Operations Management | ● | ● | ● | | ● | ● | ● | ● | ● | | | Customer Experience/Marketing | | ● | ● | | ● | ● | ● | ● | ● | | | Aerospace | | ● | ● | | ● | ● | ● | | ● | | | Manufacturing/Engineering | | ● | ● | | ● | | ● | | ● | | | Safety/Risk Management | | ● | ● | | ● | ● | ● | | ● | | | Financial and Accounting | ● | ● | ● | ● | ● | ● | | ● | ● | | | Public Company Board/Executive | ● | ● | | | ● | ● | | ● | ● |
Information about Board Nominees
| 16 | Virgin Galactic Holdings, Inc. |
Information about Board Nominees
| RAYMOND MABUS, JR. Age: 75 Director Since: April 2023 | Mr. Mabus, 75, has served as Chair of the Company’s Board of Directors since November 2023 and has served on the Board of Directors since April 2023. In April 2023, Mr. Mabus was appointed as the Company’s lead independent director, and also began serving as interim Chair of the Board in June 2023. Mr. Mabus served as the 75th United States Secretary of the Navy from 2009 to 2017. Mr. Mabus was the United States Ambassador to the Kingdom of Saudi Arabia from 1994 to 1996, the 60th Governor of Mississippi from 1988 to 1992, and Auditor of the State of Mississippi from 1984 to 1988. Mr. Mabus is currently CEO of The Mabus Group, a consulting company which he founded in 2017, and Vice Chair of InStride, a public benefit company. Mr. Mabus has served on the board of Hilton Worldwide Holdings, Inc. since 2017. Mr. Mabus also serves on the boards of World Central Kitchen and the Environmental Defense Fund and other privately held companies. Mr. Mabus served as chairman of Kadem Sustainable Impact Corp. from 2017 to March 2023. Mr. Mabus served as a director of Dana Incorporated until April 2022. Mr. Mabus previously served as Chairman of Foamex International from 2003 to 2007 and as Chief Executive Officer from 2006 to 2007. Mr. Mabus holds a bachelor’s degree in English and Political Science from the University of Mississippi, Oxford, a master’s degree in Political Science from Johns Hopkins University, and a Juris Doctor degree from Harvard Law School. We believe Mr. Mabus is well qualified to serve on our Board of Directors because of his extensive international, public policy and government relations experience as well as his significant public company executive and board experience. |
Information about Board Nominees
| MICHAEL COLGLAZIER Age: 57 Director Since: July 2020 | Mr. Colglazier, 57, has served as the Company’s Chief Executive Officer and as a member of the Company’s Board of Directors since July 2020 and has served as the Company’s President since February 2021. At the Company, Mr. Colglazier has been leading a talented and diverse team, all dedicated to making spaceflight more accessible to people around the world. Under Mr. Colglazier’s leadership, the Company launched commercial operations in 2023 with record-setting back-to-back spaceflights, repeatedly delivering safe, reliable, and life-changing experiences. Before joining the Company, Mr. Colglazier most recently served as President and Managing Director, Disney Parks International from March 2018 until his departure in July 2020. Prior to this, from January 2013 until March 2018, Mr. Colglazier was President of The Disneyland Resort, where he led a workforce of nearly 30,000 employees and drove record business performance and growth. He is currently Chairman of the CEO Roundtable for the University of California, Irvine. He is also a past member of the Engineering Advisory Board of Rice University, and past commissioner and member of the executive committee of the California Travel and Tourism Commission. Mr. Colglazier holds a bachelor’s degree in Industrial Engineering from Stanford University and holds a Master of Business Administration from Harvard Business School. We believe Mr. Colglazier is well qualified to serve on our Board of Directors because of his extensive experience developing and growing consumer-oriented businesses strategically, commercially and operationally. |
Information about Board Nominees
| 2024 Proxy Statement | 17 |
Information about Board Nominees
| HENIO ARCANGELI, JR Age: 61 Director Since: August 2023 | Mr. Arcangeli, 61, has served on the Company’s Board of Directors since August 2023. He most recently served as Senior Vice President of the Automobile Division of American Honda Motor Co., Inc., where he oversaw the Honda and Acura brands within the Automobile Division, from 2017 to 2020. Prior to American Honda, from 2014 to 2016, Mr. Arcangeli was President of Yanmar North America, a global manufacturer of diversified industrial and consumer products. Prior to that, Mr. Arcangeli served as a senior executive with Yamaha Motor Corporation USA for eight years, including serving as President of the Motorsports Group Company. From 2002 to 2006, he was an executive at Pioneer Electronics (USA), including serving as President & Chief Operating Officer of the Strategic Business Services Group. Earlier, he held senior roles at Thermador Corporation, as well as General Electric Company. Mr. Arcangeli currently serves as an Advisor to Ouster, Inc. and ICON Aircraft Company, is a member of the Board of Trustees and past Chairman of Kettering University, is a member of the Board of Directors for the Long Beach Rescue Mission, and is Chairman of the Long Beach Rescue Mission Foundation. Mr. Arcangeli holds a bachelor’s degree in mechanical engineering from the General Motors Institute (now Kettering University), a master’s degree of Engineering (Mechanical) from Cornell University and a Master of Business Administration from Stanford Graduate School of Business. We believe Mr. Arcangeli is well qualified to serve on our Board of Directors because of his extensive manufacturing experience as well as his deep experience with consumer products. |
Information about Board Nominees
| LUIGI BRAMBILLA Age: 40 Director Since: November 2023 | Mr. Brambilla, 40, has served on the Company’s Board of Directors since November 2023. Mr. Brambilla joined Virgin Management Limited/USA (a subsidiary of Virgin Group Limited (“Virgin Group”)) in 2013 and has most recently served as the Managing Director, Investments and Capital Markets since September 2023, where he has led a number of M&A and capital markets transactions across Virgin Group’s aviation, holidays, cruises, loyalty, wellness and entertainment sectors. He also serves as a member of the Investment Committee of the Investment Office of the Branson Family. Prior to his current role at the Virgin Group, Mr. Brambilla held a number of roles of increasing responsibility, most recently as the Managing Director, Investments from March 2018 to September 2023. He is a member of the Board of Directors of Virgin Atlantic Limited and Virgin Voyages and is a Board Observer for Virgin Red. Prior to joining the Virgin Group, Mr. Brambilla worked at Clayton Dubilier & Rice, a private equity firm, from 2010 to 2013. Prior to that, Mr. Brambilla worked at Citigroup in the Investment Banking division from 2006 to 2010. He holds a bachelor’s degree in International Economics and a master’s degree in International Management from Bocconi University in Milan, Italy. We believe Mr. Brambilla is well qualified to serve on our Board of Directors because of his extensive investment and capital markets expertise. |
Information about Board Nominees
| 18 | Virgin Galactic Holdings, Inc. |
Information about Board Nominees
| TINA JONAS Age: 64 Director Since: June 2021 | Ms. Jonas, 64, has served on the Company’s Board of Directors since June 2021. Ms. Jonas is an independent consultant providing strategic consulting for the defense, aviation and healthcare sectors since 2015. From 2012 to 2014, Ms. Jonas served in several executive roles within United Health Group before becoming President, UnitedHealthcare, Military and Veterans. From 2010 to 2012, Ms. Jonas served as Executive Vice President, Operations of PASSUR Aerospace, a business intelligence and aviation firm. From 2008 to 2010, Ms. Jonas served as Director, Operations, Sikorsky Aircraft. From 2004 to 2008, Ms. Jonas served as the Undersecretary of Defense and Chief Financial Officer for the Department of Defense. From 2002 to 2004, Ms. Jonas served as the Assistant Director and Chief Financial Officer for the Federal Bureau of Investigation. From 2001 to 2002, Ms. Jonas served as Deputy Undersecretary for Financial Management for the Department of Defense. Ms. Jonas has served on the board of directors and the Audit and Finance Committee and certain other board committees of Centrus Energy Corp. since 2020, and serves on the board of directors of other privately held companies and non-profits. Ms. Jonas holds a bachelor’s degree in Political Science from Arizona State University and a master’s degree in Liberal Studies from Georgetown University. Ms. Jonas is well qualified to serve on our Board of Directors because of her extensive financial and operational experience and her experience in the aviation industry. |
Information about Board Nominees
| CRAIG KREEGER Age: 64 Director Since: October 2019 | Mr. Kreeger, 64, has served on the Company’s Board of Directors since October 2019. Mr. Kreeger retired from his role as Chief Executive Officer and Director of Virgin Atlantic after leading the company from February 2013 through December 2018. During his tenure at Virgin Atlantic, Mr. Kreeger was responsible for all airline operations and led the company to rebuild its balance sheet, launch its successful joint venture with Delta Airlines and develop a long-term strategy for expanding the joint venture to include Air France and KLM Royal Dutch Airlines. Prior to his tenure at Virgin Atlantic, Mr. Kreeger spent 28 years at American Airlines, where he held a variety of commercial, operational, financial and strategic roles. Mr. Kreeger spent his last 6 years at American as part of its leadership team overseeing its International Division and its Customer Service. Mr. Kreeger served as a board member of Virgin Atlantic from February 2013 to December 2018 and has served on the board of Mass Luminosity since 2019. Mr. Kreeger holds a bachelor’s degree in Economics from the University of California at San Diego and a Master of Business Administration from the University of California at Los Angeles. We believe Mr. Kreeger is well qualified to serve on our Board of Directors because of his extensive operational, financial and managerial experience and his deep industry knowledge. |
Information about Board Nominees
| 2024 Proxy Statement | 19 |
Information about Board Nominees
| WANDA SIGUR Age: 65 Director Since: December 2021 | Ms. Sigur, 65, has served on the Company’s Board of Directors since December 2021. Ms. Sigur is an independent aerospace consultant for emerging space exploration and traditional aerospace industry companies, providing design, analysis, prototype build, test solutions and design partners and, since 2018, has provided these services through Lambent Engineering LLC, where Ms. Sigur is President and Founder. From 1979 to 2017, Ms. Sigur held various senior level positions at Lockheed Martin Space Systems, most recently from 2014 to 2017, as Vice President and General Manager of Civil Space, where she had executive responsibility for national space programs relating to human spaceflight and space science missions, including planetary, solar, astrophysical, and Earth remote sensing for civil government agencies. Ms. Sigur has served as a director of Charles Stark Draper Laboratory, Inc. since March 2021. Ms. Sigur is a member of the National Academy of Engineering (NAE), the International Academy of Astronautics (IAA) and The Academy of Medicine, Engineering and Science of Texas (TAMEST). She is a member of the National Academies of Sciences, Engineering, and Medicine’s Aeronautics and Space Evaluation Board (ASEB). Ms. Sigur holds a bachelor’s degree in Materials Science and Engineering from Rice University and a Master of Business Administration from Tulane University. We believe Ms. Sigur is well qualified to serve on our Board of Directors because of her extensive operational experience as well as her deep experience in the aerospace industry. |
Information about Board Nominees
| DIANA STRANDBERG Age: 64 Director Since: April 2023 | Ms. Strandberg, 64, has served on the Company’s Board of Directors since April 2023. Ms. Strandberg retired at year-end 2022 from Dodge & Cox, a privately owned investment manager serving individuals and institutions globally, where she held several positions since joining in 1988, including most recently serving as Senior Vice President & Director, International Equity and as an Executive Board Member, both from 2011 to 2022. Previously, Ms. Strandberg was an Equity Research Analyst at First Boston Corporation. Ms. Strandberg serves on the Advisory Board of the Smithsonian Institution, on the boards of UC Berkeley Endowment Management Company and Liberset, an investment fund in private companies, and on the National Board of Summer Search, a youth mentoring organization. Ms. Strandberg holds a bachelor’s degree in Economics from the University of California, Berkeley, and a Master of Business Administration degree from Harvard Business School. She holds a distinction as a Chartered Financial Analyst. We believe Ms. Strandberg is well qualified to serve on our Board of Directors because of her extensive financial and capital markets experience. |
Information about Board Nominees
| 20 | Virgin Galactic Holdings, Inc. |
Information about Board Nominees
| W. GILBERT (GIL) WEST Age: 63 Director Since: February 2021 | Mr. West, 63, has served on the Company’s Board of Directors since February 2021. Since April 1, 2024, Mr. West has served as the Chief Executive Officer and as a board member of Hertz Global Holdings, Inc. Mr. West served as Chief Operating Officer of Cruise LLC, GM’s majority-owned autonomous vehicle subsidiary, from January 2021 to December 2023. From 2008 to 2020, Mr. West served in various leadership positions at Delta Air Lines, most recently as its Senior Executive Vice President and Chief Operating Officer, overseeing Delta’s worldwide operations, including 366 airports in 66 countries, 1,300 aircrafts, 200 million customers per year, more than 70,000 employees and an annual budget of $16 billion. Prior to joining Delta, Mr. West served as President and Chief Executive Officer of Laidlaw Transit Services, a provider of transportation services, from 2006 to 2007. Mr. West has served on the board of directors of Forward Air Corporation since February 1, 2024, and previously served on its board from October 2018 to May 2021; however, in light of Mr. West’s recent appointment as CEO and as a director of Hertz, Forward Air has announced that Mr. West will not stand for re-election to Forward Air’s Board at its upcoming 2024 annual meeting of stockholders. Mr. West also served as a board member of Genesis Park Acquisition Corp. until September 2021. Mr. West has also been a member of the Brevard College Board of Trustees in North Carolina since October 2017 and previously served on the Board of Directors for the American Cancer Society and a member of its Executive Leadership Council. Mr. West holds a bachelor’ degree in Mechanical Engineering from North Carolina State University and a Master of Business Administration from National University. We believe Mr. West is well qualified to serve on our Board of Directors because of his extensive professional experience in the transportation industry and serving as senior executive of a large public company overseeing its extensive operations. |
Information about Board Nominees
| Board Recommendation | | The Board of Directors unanimously recommends you vote “FOR” the election of each of the director nominees named above. |
Information about Board Nominees
| 2024 Proxy Statement | 21 |
Information about Board Nominees
Our Board of Directors has adopted Corporate Governance Guidelines. A copy of these Corporate Governance Guidelines can be found in the “Governance — Governance Documents” section of the “Investors” page on our website located at www.virgingalactic.com, or by writing to our Secretary at our offices at 1700 Flight Way, Tustin, California 92782. Please note that the information contained on our website is not incorporated by reference in, or considered part of, this Proxy Statement. Among the topics addressed in our Corporate Governance Guidelines are:
Information about Board Nominees
| ● | Director independence and qualifications | | ● | Executive sessions of independent directors | | ● | Board leadership structure | | ● | Selection of new directors | | ● | Director orientation and continuing education | | ● | Limits on board service | | ● | Change of principal occupation | | ● | Term limits | | ● | Director responsibilities | | ● | Director compensation | | ● | Stock ownership | | ● | Board access to senior management | | ● | Board access to independent advisors | | ● | Board self-evaluations | | ● | Board meetings | | ● | Meeting attendance by directors and non-directors | | ● | Meeting materials | | ● | Board committees, responsibilities and independence | | ● | Succession planning |
Other Governance Practices and Policies
| The Board believes that director compensation should pay directors for work required and that compensation should align directors’ interests with the long-term interests of stockholders. The Compensation Committee reviews and makes recommendations to the Board regarding non-employee director compensation, taking into consideration market reviews conducted by Meridian, the Compensation Committee’s independent compensation consultant. In 2023, we maintained an Amended and Restated Non-Employee Director Compensation Program (the “Director Compensation Program”) that consists of annual cash retainer fees and long-term equity awards for our non-employee directors. Eligible directors under the Director Compensation Program generally are directors who are not affiliated with us and/or the Virgin Group (as defined above) and SCH Sponsor Corp. | |
Director Compensation Table for Fiscal Year 2023
Director Compensation Table for Fiscal Year 2023 The following table contains information concerning the compensation of our eligible non-employee directors in fiscal year 2023.
Director Compensation Table for Fiscal Year 2023
| Name | Fees Earned in Cash ($) | Stock Award ($)(1) | All Other Compensation ($) | Total ($) | | Raymond Mabus, Jr. | $121,232 | $275,000 | — | $396,232 | | Henio Arcangeli, Jr. | $46,257 | $150,000 | — | $196,257 | | Luigi Brambilla(2) | $18,003 | — | — | $18,003 | | Tina Jonas | $157,500 | $125,000 | — | $282,500 | | Craig Kreeger | $149,755 | $125,000 | — | $274,755 | | Wanda Sigur | $137,077 | $125,000 | — | $262,077 | | Diana Strandberg | $100,146 | $275,000 | — | $375,146 | | W. Gilbert West | $145,529 | $125,000 | — | $270,529 | | Dr. Wanda Austin(3) | $95,558 | $125,000 | — | $220,558 | | Adam Bain(3) | $62,997 | — | — | $62,997 | | George Mattson(3) | $60,054 | — | — | $60,054 |
Director Compensation Table for Fiscal Year 2023
| (1) Amounts reflect the full grant-date fair value of RSU awards granted during 2023 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the non-employee director. We provide information regarding the assumptions used to calculate the value of all stock awards made to our directors in Note 10 in our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The table below shows the aggregate numbers of RSU awards which were outstanding and unvested as of December 31, 2023. |
Director Compensation Table for Fiscal Year 2023
| Name | Restricted Stock Units Outstanding as of December 31, 2023 | | Raymond Mabus, Jr. | 73,150 | | Henio Arcangeli, Jr. | 58,140 | | Tina Jonas | 31,825 | | Craig Kreeger | 30,414 | | Wanda Sigur | 34,003 | | Diana Strandberg | 73,150 | | W. Gilbert West | 30,546 |
Director Compensation Table for Fiscal Year 2023
| (2) In 2023, Mr. Brambilla was eligible to receive only annual cash retainer fees consistent with the annual cash retainer fees provided to eligible directors under the Director Compensation Program, which were paid directly to the Virgin Group, as further described in “Certain Transactions with Related Persons.” | | (3) Dr. Austin’s and Messrs. Bain’s and Mattson’s services as members of our Board of directors ceased in August 2023, June 2023, and June 2023, respectively. |
Director Compensation Table for Fiscal Year 2023
| 34 | Virgin Galactic Holdings, Inc. |
Compensation Discussion and Analysis
| | Base Salary | Cash-Based Incentive Compensation | Equity-Based Compensation | | Description | ● Cash compensation to reflect individual’s skills, experience, and overall responsibilities of the executive’s position | ● Earned based on achievement of safety, commercial growth, financial, and ESG performance metrics, as well as individual performance goals, which are approved by our Compensation Committee | ● Time-vested restricted stock units (“RSUs”) ● Performance share units (“PSUs”) earned based on the achievement of pre-defined stock price hurdles | | Key Objectives | ● Attracts and retains talent by providing a stable and reliable source of income ● Provides base salaries consistent with each executive’s responsibilities and that are market competitive so that they are not motivated to take excessive risks | ● Rewards the achievement of corporate objectives and overall contributions towards achieving those objectives over a 12-month period | ● Incentivizes our executives to create long-term stockholder value and focus on sustained stock price appreciation ● Aligns our executives’ strategic objectives with those of our stockholders’ interests over the long-term ● Promotes retention and executive stock ownership |
Short-Term Incentive
Short-Term Incentive Management’s performance on safety culture, commercial growth, financial, and ESG-related goals in 2023 resulted in short-term incentive plan payout at 106% of target for the NEOs.
Long-Term Incentives
Long-Term Incentives PSUs were granted to the NEOs in 2023 which vest based on achieving stock price hurdles over a three-year performance period. As of December 31, 2023, none of the 2023 PSUs have vested since the stock price hurdles have not yet been achieved which reinforces our pay-for-performance philosophy.
Listening to Our Stockholders
| ● | Preference for 50% of the NEOs’ long-term incentive program to be granted as performance-based awards; | | ● | Provide more information on how the compensation peer group was determined; and | | ● | Appreciation for advancement in social policies and acknowledgement that ESG has been an area of increased focus for Virgin Galactic as a young public company and the evolution of our compensation program. |
Compensation Governance and Best Practices
| What We Do: | What We Do Not Do: | | ✓ Pay for performance; pay is not guaranteed ✓ Annual say-on-pay vote ✓ Clawback policy that complies with the new listing standards, in addition to our pre-existing clawback policy ✓ Capped incentive awards ✓ Stock ownership guidelines ✓ Minimum 1-year vesting period for all equity-based awards ✓ Limited perquisites ✓ Engagement with stockholders ✓ Independent compensation and legal consultants | ✕ No single-trigger change-in-control severance arrangements ✕ Do not provide guaranteed salary increases ✕ Do not provide significant or excessive perquisites ✕ No “liberal” share recycling ✕ No repricings without stockholder approval ✕ Do not maintain defined benefit pension or supplemental executive retirement plans ✕ No hedging of Virgin Galactic securities by our executive officers and non-employee directors ✕ No pledging of Virgin Galactic securities by our executive officers and non-employee directors |
Compensation Governance and Best Practices
Process and Rationale for Executive Compensation Decisions The Compensation Committee considers pay for performance, alignment with stockholder interests, long-term value creation and several other factors in determining the compensation of our NEOs. The Compensation Committee does not have a predefined framework for prioritizing or weighing these factors, and the emphasis placed on specific factors may vary among our NEOs. Ultimately, it is the Compensation Committee’s judgment about these factors that forms the basis for determining our NEOs’ compensation program. In the first quarter of each year, the Compensation Committee sets our NEOs’ salaries and cash-based incentive targets for the fiscal year and grants long-term incentive awards for the recently completed fiscal year. This allows the Compensation Committee to consider Company and individual performance for the previous year, while planning for the year ahead. The Compensation Committee approved the fiscal year 2023 equity awards, the fiscal year 2023 cash-based incentive program earned amounts and any adjustments to base salaries and bonus targets for fiscal year 2023. In making these decisions and determining the amounts and mix of compensation, the Compensation Committee considered the following factors, among others:
Compensation Governance and Best Practices
| ● | Create a competitive and balanced compensation program that rewards executives’ performance and contributions to the Company’s short- and long-term business results, while closely aligning the interests of the executives with those of stockholders; | | ● | Attract, motivate, and retain highly qualified executives who are committed to the Company’s mission, performance, and culture, by paying them competitively; and | | ● | Emphasize pay for performance, with a program that aligns financial and operational achievements, and drives long-term value creation. |
Role of the Compensation Committee in Determining Executive Compensation
| ● | Provided information, insights and advice regarding compensation philosophy, objectives and strategy; | | ● | Recommended peer group selection criteria and identified and recommended potential peer companies; | | ● | Provided analyses of competitive compensation practices for executive officers and non-employee directors; | | ● | Provided analyses of potential risks arising from executive and non-executive compensation programs; | | ● | Reviewed and commented on recommendations regarding executive officer compensation amounts; | | ● | Advised the Compensation Committee on specific issues as they arose; and | | ● | Kept the Compensation Committee informed of executive compensation trends and regulatory and governance considerations related to executive compensation. |
Review of Peer Group Data
Review of Peer Group Data There are no direct public company peers available for benchmarking purposes. As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, our primary competitor in establishing a suborbital commercial human spaceflight market is Blue Origin, a privately-funded company that has developed a vertically-launched, suborbital capsule. In addition, we are aware of several large, well-funded, public and private entities actively engaged in developing competitive products within the aerospace industry, including SpaceX and Boeing. Virgin Galactic cannot use Blue Origin or SpaceX as compensation benchmarking peers because they are private, and Boeing is significantly larger and not appropriate for inclusion in our peer group. Regardless, the Compensation Committee recognizes the need to assess comparable pay practices to understand the market in which the Company competes to attract and retain a highly-skilled executive team. The Compensation Committee identified peer companies to use for competitive analyses, based on recommendations made by Meridian. The peer companies were identified based on the following criteria that help capture the scope and complexity of Virgin Galactic:
Review of Peer Group Data
| ● | Industries and characteristics: companies operating in similar or comparable industries and representing characteristics of Virgin Galactic, including: |
Review of Peer Group Data
| Industries | Characteristics | | ●Aerospace & defense ●Luxury travel ●Leisure and entertainment | ●High growth and entrepreneurial companies ●B2C focus ●Recent IPO ●West Coast headquarters |
Review of Peer Group Data
| ● | Size: companies of comparable size, with market capitalization and enterprise value generally within 1/4x to 4x that of Virgin Galactic, and revenue generally below $3B. | | | | ● | The Compensation Committee used market capitalization as a quantitative criterion because market capitalization, as a key component of which is stock price, is the key driver of equity compensation grant value. Equity compensation grant value is the single largest component of executive compensation. Further, market capitalization is directly related to stockholders’ interests. | | | ● | The Compensation Committee also included revenues as a quantitative criterion because revenues are commonly used as a selection criterion by our peer companies, third-party compensation survey providers and proxy advisory firms. |
Review of Peer Group Data
For 2023, the Compensation Committee made a few changes to the peer group to better reflect Virgin Galactic’s size relative to the peer group. The Compensation Committee removed Brunswick and DraftKings, and added Joby Aviation, given that the company is limited-revenue and its relevance in terms of industry. The peer group for 2023 consisted of the following 17 companies:
Review of Peer Group Data
| VIRGIN GALACTIC 2023 EXECUTIVE COMPENSATION PEER GROUP | | ●Aerojet Rocketdyne Holdings, Inc. ●Curtiss-Wright Corporation ●Fisker Inc. ●Hyliion Holdings ●Joby Aviation, Inc. ●Kratos Defense & Security Solutions, Inc. ●Lordstown Motors Corp. ●Lyft, Inc. ●Maxar Technologies Inc. ●Mercury Systems, Inc. ●Moog Inc. ●Nikola Corporation ●Peloton Interactive, Inc. ●Sunrun Inc. ●Vail Resorts, Inc. ●Velodyne Lidar, Inc. ●Wynn Resorts, Limited |
Review of Peer Group Data
Meridian provides analyses of peer company competitive practices to the Compensation Committee. The Compensation Committee considers these peer company competitive practices, along with the other factors described in this section, when determining the salaries, bonus targets and equity awards for our CEO and other executive officers.
Review of Peer Group Data
| 48 | Virgin Galactic Holdings, Inc. |
Review of Peer Group Data
For 2024, the Compensation Committee made changes to the peer group due to merger and acquisition activity among the peers and to better align with Virgin Galactic’s business and size. The Compensation Committee removed AeroJet Rocketdyne, Hyliion Holdings, Lordstown Motors, Maxar Technologies, Velodyne Lidar, and Wynn Resorts. The Compensation Committee added Archer Aviation, Lucid Group, Sonos, and Wheels Up Experience. 2023 Base Salaries The base salaries of our NEOs are an important part of their total compensation package and are intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities, as well as the Compensation Committee’s review of market pay levels. The following table sets forth the annual base salaries for each of our NEOs that were approved for 2023:
Review of Peer Group Data
| Named Executive Officer | 2022 | 2023 | % Change | | Michael Colglazier | $1,000,000 | $1,000,000 | 0% | | Doug Ahrens(1) | $546,000 | $600,000 | 10% | | Alistair Burns(2) | $350,000 | $364,000 | 4% | | Aparna Chitale(3) | $400,000 | $450,000 | 13% | | Sarah Kim(4) | $400,000 | $400,000 | 0% |
Review of Peer Group Data
| (1) Increase for Mr. Ahrens reflects expanded roles and responsibilities in 2023. Mr. Ahrens took on additional responsibilities overseeing corporate real estate and supply chain. | | (2) Increase for Mr. Burns reflects an annual merit increase for his performance in 2023. | | (3) Increase for Ms. Chitale reflects expanded roles and responsibilities in 2023. Ms. Chitale took on additional responsibilities overseeing corporate security and corporate social impact. | | (4) Ms. Kim did not receive a salary increase given she commenced employment in December 2022. |
Cash-Based Incentive Compensation
Cash-Based Incentive Compensation 2023 Executive Annual Cash Incentive Program Each of our NEOs participated in our 2023 Executive Annual Cash Incentive Program (the “Program”), which is focused on rewarding our executive officers for annual operating performance that meets or exceeds pre-established goals. For fiscal 2023, the Compensation Committee maintained a similar plan design to 2022 and determined that annual cash compensation under the Program would be based on the achievement of certain performance goals within four separate categories, including: safety culture, commercial growth, financial, and environmental, social & governance (“ESG”) goals. Individual contributions were also assessed in how our NEOs delivered on our strategic plan to become a scaled, commercial operation and environmentally sustainable company. The 2023 pre-established goals were reviewed and approved by the Compensation Committee at the beginning of the performance year, whereby each company performance category includes various quantitative and qualitative objectives and at year end a balanced scorecard approach is used to determine the final company performance category. Each NEO is eligible to receive an annual performance-based cash bonus based on a specified target annual bonus award amount, expressed as a percentage of the NEO’s base salary. The performance cash bonus for 2023 was calculated based on the target bonus percentage opportunity multiplied by the aggregate achievement of the Company performance goals, and then multiplied by each officer’s individual management by objectives (“MBO”) modifier, as illustrated below.
Cash-Based Incentive Compensation
| Individual Opportunity | | | × | Company Performance | | | | × | Individual Pre-Established MBOs (+/- 20% Modifier) | = | Individual Bonus Payout | | Base Salary | × | Target Bonus % | | Safety Culture (30%) | Commercial Growth (30%) | Financial (30%) | ESG (10%) | | | | |
Cash-Based Incentive Compensation
The funding payout range is zero to 200% of an executive officer’s target bonus opportunity and encompasses both upside reward and downside incentive opportunity if minimum levels of threshold performance are not achieved. The 2023 target bonus opportunities for the named executive officers are as follows:
Cash-Based Incentive Compensation
| Named Executive Officer | 2023 Target Bonus as a % of Base Salary | | Michael Colglazier | 125% | | Doug Ahrens | 100% | | Alistair Burns | 50% | | Aparna Chitale | 80% | | Sarah Kim | 80% |
Cash-Based Incentive Compensation
Each executive officer’s bonus target is determined by the Compensation Committee based on practices of our peer companies and other considerations such as individual contributions, performance, internal equity, and other factors as outlined in the section above titled “Process and Rationale for Executive Compensation Decisions.” Each officer’s target bonus remained unchanged from 2022. In March 2024, the Compensation Committee assessed the Company’s 2023 achievement of the corporate performance objectives and the Program payouts recommended by the Chief Executive Officer (other than his own bonus payout). Based on the achievement of defined performance goals, the overall company performance was determined to be 106% of target. The following table summarizes each component of the corporate performance categories, the performance goal weightings, threshold, target and maximum goal for the financial category, and our achievement of the performance metrics in 2023. See footnotes for additional disclosure on the results of the performance category outcomes.
Cash-Based Incentive Compensation
| Performance Category | Weight | Threshold | Target | Maximum | Payout as % of Weighted Target | | Safety Culture(1) Flight, manufacturing, and workplace safety goals that include Total Recorded Incident reporting compared to industry standards and company-wide safety initiatives | 30% | | | | 36% | | Commercial Growth(2) Commercial service launch and flight cadence, Astronaut experience, and other commercial objectives | 30% | | | | 27% | | Financial Annual spending for the work completed | 30% | | | | 33% | | Environmental, Social & Governance(3) Goals related to advancing key initiatives within the ESG Charter, reduction of greenhouse gas emissions, year-over-year representation, building an inclusive culture and implementation of updating tech systems | 10% | | | | 10% | | Total | 100% | 25% Payout | 100% Payout | 200% Payout | 106% |
Cash-Based Incentive Compensation
| (1) Safety Culture results: Achieved Total Recordable Incident Rate (TRIR) above target (10% better than industry standard). Achieved performance at or above target on Company Safety initiatives including target performance on teammate survey safety index (5% improvement from 2022), target performance on expanded safety training, and above target performance on safety program assessment/audits. | | (2) Commercial Growth results: Achieved threshold to target performance on key milestones for Delta Class and achieved below threshold performance for Next Gen Mothership milestones. Achieved target to maximum performance on astronaut experience objectives, and target performance on flight cadence objectives. | | (3) ESG results: Successfully advanced key initiatives within the ESG charter and reduced greenhouse gas emissions of commercial spaceflights compared to test flights (target performance), improved representation of diverse headcount and improved inclusive culture to enable innovation (target performance), achieved threshold to maximum performance on the launch of multi-year large-scale technical programs and related milestones. |
Cash-Based Incentive Compensation
The Compensation Committee also reviewed each NEO’s performance against the executive’s performance objectives for 2023. Mr. Colglazier. The Compensation Committee determined that Mr. Colglazier’s individual MBO performance factor was achieved at 110%. Under his leadership, the Company made its entry into commercial service by executing six human spaceflights safely in six months while delivering an unparalleled customer experience and proving a safe, reliable and repeatable product. Mr. Colglazier led the business transformation strategy to ensure the Company is financially and structurally well positioned to deliver the next generation of production spaceships that are critical to scaling our business. Mr. Ahrens. The Compensation Committee determined that Mr. Ahrens’ individual MBO performance factor was achieved at 105.3%, reflecting the planning and well-managed execution of the successful capital raises and a spending control program. Under his leadership, the real estate team developed an integrated real estate plan to build our manufacturing facility in Arizona and expansion of our R&D facility in Orange County, California. Mr. Ahrens led significant accounting transitions to include vehicle capitalization following the start of our commercial service and change in the Company’s external auditors. Mr. Burns. The Compensation Committee determined that Mr. Burns’ individual MBO performance factor was 110%, reflecting his contributions in implementing digital transformation capabilities focused on design & manufacturing process and maintenance capabilities, in order to substantively reduce build and turnaround time for Delta class spaceships. He also delivered an Information Security Governance plan to effectively manage information and cybersecurity risks and threats applicable to our business and remain compliant with all applicable regulatory requirements. Ms. Chitale. The Compensation Committee determined that Ms. Chitale’s individual MBO performance factor was achieved at 115.3%, reflecting her leadership in ensuring organization and talent readiness as the Company made entry into commercial service as well as developing labor optimization strategies and execution of the restructuring efforts to position the Company for long term success. She also led several leadership development and culture engagement initiatives across the Company. Ms. Kim. The Compensation Committee determined that Ms. Kim’s individual MBO performance factor was achieved at 100%, reflecting her leadership in building the legal infrastructure to support the Company’s entry into commercial service, and strategic negotiations with key partners working on the Delta Program. In 2023, Ms. Kim focused on strengthening our corporate governance practice, leading our ESG strategy and publishing our first public-facing ESG website. Based on the Company’s achievement of the goals under the Company Performance components of the Program, the executive officers’ applicable target bonus opportunity was multiplied by 106%. The Program also provided for an individual MBO modifier of up to +/- 20% based on the Compensation Committee’s assessment of each executive’s individual performance in 2023. The table below provides information about the executives’ bonus opportunity, company performance payout, individual performance modifier and final bonus payout.
Cash-Based Incentive Compensation
| Named Executive Officer | 2023 Target Bonus | Company Performance | Company Performance Bonus Payout | Individual Performance Modifier | Actual 2023 Bonus Payout(1) | | Michael Colglazier | $1,250,000 | 106% | $1,325,000 | 110.0% | $1,457,500 | | Doug Ahrens | $600,000 | 106% | $636,000 | 105.3% | $670,000 | | Alistair Burns | $182,000 | 106% | $192,920 | 110.0% | $212,212 | | Aparna Chitale | $360,000 | 106% | $381,600 | 115.3% | $440,000 | | Sarah Kim | $320,000 | 106% | $339,200 | 100.0% | $339,200 |
Cash-Based Incentive Compensation
| (1) The participating executives’ 2023 annual bonuses set forth in this column are included in the “Non-Equity Incentive Plan Compensation” column in the “Summary Compensation Table” below. |
Cash-Based Incentive Compensation
March 2023 Awards In March 2023, we granted RSUs and PSUs to our NEOs (other than Ms. Kim, given that she received equity awards in connection with her commencement of employment in December 2022). The mix of RSUs and PSUs was 75% and 25%, respectively for Messrs. Colglazier and Ahrens and Ms. Chitale, and 100% RSUs for Mr. Burns (based on the dollar-denominated values of the awards rather than the grant date fair values; when the weighting of LTI mix is based on the grant date fair value, the percentage of PSUs is greater). We use the following vehicles to incentivize our executives to create long-term stockholder value and focus on sustained stock price appreciation, align our executive’s strategic objectives with those of our stockholders’ interests over the long-term, and promote retention and executive stock ownership:
Cash-Based Incentive Compensation
| ● | RSUs. We use RSUs as part of the annual equity awards for our executive officers in order to support ownership accumulation and employment retention objectives. RSUs are also used to provide stability to our NEOs as we confront the realities of pioneering a new industry. Over time, we expect the weighting of RSUs to decrease though the Committee believes that the current weighting is appropriate and fitting to the Company’s current situation and business life-cycle. The RSUs have a 4-year vesting schedule: 25% vest on the one-year anniversary of the grant date, and the remaining 75% vest in substantially equal quarterly installments over the following 12 quarters. | | ● | PSUs. Given our ongoing commitment to strong performance, good corporate governance principles, and direct performance orientation in our compensation program, we introduced PSUs into the program beginning in 2021. We implemented PSUs promptly after becoming a public company to demonstrate our commitment with promoting a pay-for-performance philosophy and respond to stockholder feedback. In 2023, PSUs generally made up 25% of the LTI awards (based on the dollar-denominated values of the awards rather than the grant date fair values) granted to our NEOs, other than Mr. Burns and Ms. Kim. We determined to maintain the 2022 LTI mix for 2023 given where the Company is in its lifecycle, stock price volatility, and turnover in the executive team. The PSUs allow recipients to earn a variable number of shares of our common stock over a three-year period (March 2023 - March 2026) based on stock price growth hurdles. The stock price compounded annual growth rates (“CAGR”) were set with consideration to the S&P 500 historical return and are intended to be rigorous and represent meaningful return to stockholders. As of December 31, 2023, none of the stock price hurdles have been met. |
Cash-Based Incentive Compensation
| 3-year Stock Price CAGR | PSU Payout (as a % of Target) | | <5% | 0% | | 5% | 50% | | 10% | 100% | | 15% | 150% | | 20% | 200% |
Cash-Based Incentive Compensation
The following table sets forth the dollar-denominated values of the RSUs and PSUs granted to our named executive officers in 2023. The number of RSUs and PSUs subject to each award is determined by dividing the dollar-denominated value by our average closing price over the 20-day period prior to and including the grant date. As such, the dollar-denominated values of these awards are not equal to the accounting grant-date fair value of the awards, including the PSUs, which are valued for accounting purposes using a Monte-Carlo simulation, which we are required to disclose in the “Summary Compensation Table” later in this Proxy Statement:
Cash-Based Incentive Compensation
| Named Executive Officer | 2023 RSUs | 2023 PSUs | Total 2023 Equity Value | | Michael Colglazier | $3,900,000 | $1,300,000 | $5,200,000 | | Doug Ahrens | $2,362,500 | $787,500 | $3,150,000 | | Alistair Burns | $385,000 | $— | $385,000 | | Aparna Chitale | $900,000 | $300,000 | $1,200,000 | | Sarah Kim | $— | $— | $—(1) |
Cash-Based Incentive Compensation
| (1) Ms. Kim did not receive an equity award in 2023 given that she commenced employment in December 2022 and received a sign-on and an initial equity award in December 2022. |
Cash-Based Incentive Compensation
| Events that Trigger Action | Covered Compensation | | Misconduct resulting in a material accounting restatement. | Excess amount of incentive award paid within three years before restatement date. | | Intentional misconduct resulting in the miscalculation and/or misrepresentation of the achievement of non-financial performance objectives. | Excess amount of incentive award paid within three years before achievement of performance objectives is re-determined. | | Material misconduct which results or could result in reputational harm or financial loss to the Company. | Awards paid within three years before or after the misconduct event. |
Cash-Based Incentive Compensation
Anti-Hedging/Pledging Policy Our Board of Directors has adopted an Insider Trading Compliance Policy, which applies to all of our directors, officers and employees. The policy prohibits our directors, officers and employees from engaging in hedging or monetization transactions, such as zero-cost collars and forward sale contracts; short sales; and transactions in publicly traded options, such as puts, calls and other derivatives involving our equity securities. The policy also prohibits pledging our securities to secure margin or other loans. Tax and Accounting Considerations As a general matter, our Board of Directors and the Compensation Committee review and consider the various tax and accounting implications of compensation programs we utilize. Code Section 409A Section 409A of the Code, or “Section 409A”, requires that “nonqualified deferred compensation” be deferred and paid under plans or arrangements that satisfy the requirements of the statute with respect to the timing of deferral elections, timing of payments and certain other matters. Failure to satisfy these requirements can expose employees and other service providers to accelerated income tax liabilities, penalty taxes and interest on their vested compensation under such plans. Accordingly, as a general matter, it is our intention to design and administer our compensation and benefits plans and arrangements for all of our employees and other service providers, including our named executive officers, so that they are either exempt from, or satisfy the requirements of, Section 409A. Code Section 280G Section 280G of the Code, or “Section 280G”, disallows a tax deduction with respect to excess parachute payments to certain executives of companies which undergo a change of control. In addition, Section 4999 of the Code imposes a 20% excise tax on the individual with respect to the excess parachute payment. Parachute payments are compensation linked to or triggered by a change of control and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits, and payments and acceleration of vesting from long-term incentive plans, including stock options, restricted stock and other equity-based compensation. Excess parachute payments are parachute payments that exceed a threshold determined under Section 280G based on the executive’s prior compensation. In approving the compensation arrangements for our named executive officers, our Board of Directors or Compensation Committee considers all elements of the cost to the Company of providing such compensation, including the potential impact of Section 280G. However, our Board of Directors or Compensation Committee may, in its judgment, authorize compensation arrangements that could give rise to loss of deductibility under Section 280G and the imposition of excise taxes under Section 4999 when it believes that such arrangements are appropriate to attract and retain executive talent.
Cash-Based Incentive Compensation
Accounting for Stock-Based Compensation We follow the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, or “ASC Topic 718”, for our stock-based compensation awards. ASC Topic 718 requires companies to calculate the grant date fair value of their stock-based awards using a variety of assumptions. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based awards in their income statements over the period that an employee is required to render service in exchange for the award. Grants of stock options, RSUs and PSUs under our A&R Plan are accounted for under ASC Topic 718. Our Board of Directors or Compensation Committee will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plan and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.
Executive Compensation Tables
| Name and Principal Positions | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | | Michael Colglazier Chief Executive Officer and President | 2023 | 1,000,000 | — | 5,243,644 | — | 1,457,500 | 32,872 | 7,734,016 | | | 2022 | 1,000,000 | — | 6,818,252 | 2,000,000 | 925,000 | 38,616 | 10,781,868 | | | 2021 | 1,000,000 | 500,000 | 5,000,000 | — | 880,000 | 25,794 | 7,405,794 | | Doug Ahrens Chief Financial Officer and Treasurer | 2023 | 585,461 | — | 3,176,442 | — | 670,000 | 40,254 | 4,472,157 | | | 2022 | 540,346 | — | 3,435,354 | 1,000,000 | 450,000 | 56,235 | 5,481,935 | | | 2021 | 433,125 | — | 3,500,000 | — | 392,000 | 45,909 | 4,371,034 | | Alistair Burns Senior Vice President, Chief Information Officer | 2023 | 360,231 | — | 329,539 | — | 212,212 | 20,944 | 922,926 | | | 2022 | 343,269 | — | 337,617 | — | 146,335 | 18,617 | 845,838 | | Aparna Chitale Executive Vice President, Chief People Officer | 2023 | 436,538 | — | 1,210,081 | — | 440,000 | 20,498 | 2,107,117 | | | 2022 | 400,000 | — | 1,145,128 | — | 285,000 | 21,056 | 1,851,184 | | Sarah Kim Executive Vice President, Chief Legal Officer and Secretary | 2023 | 400,000 | — | — | — | 339,200 | 20,430 | 759,630 | | | 2022 | 23,077 | 150,000 | 1,305,308 | — | — | 1,385 | 1,479,770 |
CEO Pay Ratio
CEO Pay Ratio We are providing the following information regarding the relationship of the annual total compensation of our median compensated employee to the annual total compensation of Michael Colglazier, our Chief Executive Officer. We consider the pay ratio specified below to be a reasonable estimate, calculated in a manner that is consistent with the requirements of Item 402(u) of Regulation S-K. For 2023, our last completed fiscal year:
CEO Pay Ratio
| ● | the annual total compensation of the employee who represents our median compensated employee (other than our Chief Executive Officer) was $164,544; and | | ● | the annual total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table included above, was $7,734,016. |
CEO Pay Ratio
Based on this information, for 2023, our Chief Executive Officer’s ratio of annual total compensation to the median of the annual total compensation of all of our employees (other than the Chief Executive Officer) was 47 to 1. We determined that, as of December 31, 2023, our employee population excluding our Chief Executive Officer consisted of 1,003 full-time employees. To identify the median employee from our employee population, we reviewed the annual total compensation of each of our employees in the same manner as calculated for the annual total compensation of our Chief Executive Officer. With respect to the annual total compensation of the median employee, we identified and calculated the elements of such employee’s compensation for 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $164,544. With respect to the annual total compensation of our Chief Executive Officer, we used the amount reported in the “Total” column of our 2023 Summary Compensation Table included in this Proxy Statement.
CEO Pay Ratio
| 2024 Proxy Statement | 65 |
CEO Pay Ratio
The following provides information about the relationship between executive compensation actually paid and certain financial performance measures of the Company, as determined in accordance with SEC rules. The following tables set forth information regarding compensation for our principal executive officers (“PEOs”) and average compensation related to our Non-PEO NEOs versus our Company performance for 2023, 2022, 2021 and 2020.
CEO Pay Ratio
| | Summary Compensation Table Total for Current PEO(1)(2) | Summary Compensation Table Total for Former PEO(1)(2) | Compensation Actually Paid to Current PEO(3) | Compensation Actually Paid to Former PEO(3) | Average Summary Compensation Table Total for Non-PEO NEOs(4) | Average Compensation Actually Paid to Non-PEO NEOs(5) | Value of Initial Fixed $100 Investment Based On: | | Net Income(8) | Year End Stock Price(9) | | Fiscal Year | | | | | | | Total Shareholder Return(6) | Peer Group Total Shareholder Return(7) | | | | 2023 | $7,734,016 | – | $3,865,105 | – | $2,065,458 | $1,212,883 | $21 | $45 | $(502,337) | $2.45 | | 2022 | $10,781,868 | – | $(1,438,803) | – | $3,047,989 | $535,128 | $30 | $45 | $(500,152) | $3.48 | | 2021 | $7,405,794 | – | $461,818 | – | $2,839,648 | $(1,535,598) | $116 | $120 | $(352,899) | $13.38 | | 2020 | $22,055,600 | $14,679,129 | $21,187,059 | $20,884,791 | $6,925,868 | $7,172,507 | $205 | $195 | $(644,887) | $23.73 |
CEO Pay Ratio
| (1) For 2020, Michael Colglazier (Current PEO) and George Whitesides (Former PEO) each served as principal executive officer (“PEO”) for a portion of the year, Mr. Whitesides from January 1, 2020 to July 19, 2020, and Mr. Colglazier from July 20, 2020 to December 31, 2020. For 2021 and after, Michael Colglazier served as the sole PEO of the Company. |
CEO Pay Ratio
| (2) The dollar amounts reported in this column are the amounts of total compensation reported for the Company’s PEOs for each corresponding year in the “Total” column of the Summary Compensation Table for the applicable fiscal year. |
CEO Pay Ratio
| (3) The dollar amounts reported in this column represent the amount of “compensation actually paid” to the Company’s PEO for the applicable fiscal year, as computed in accordance with Item 402(v) of Regulation S-K. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the applicable PEO’s total compensation reported in the Summary Compensation Table for the applicable fiscal year to determine the compensation actually paid: |
CEO Pay Ratio
| Year | Name of PEO | Reported Summary Compensation Table Total for PEO | [Less] Reported Value of Equity Awards(a) | [Plus] Equity Award Adjustments(b) | [Equals] Compensation Actually Paid to PEO(c) | | 2023 | Michael Colglazier | $7,734,016 | $5,243,644 | $1,374,733 | $3,865,105 |
CEO Pay Ratio
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. | | (b) The amounts deducted or added in calculating the equity award adjustments are set forth in the tables below. The fair values of unvested and outstanding equity awards to our NEOs were remeasured as of the end of each fiscal year, and as of each vesting date, during the 2020, 2021, 2022 and 2023 fiscal years. Fair values as of each measurement date were determined using valuation assumptions and methodologies (including volatility, dividend yield, and risk-free interest rates) that are generally consistent with those used to estimate fair value at grant in accordance with ASC Topic 718. For stock options, the grant-date fair values were estimated using Black-Scholes. For market-based restricted stock units, fair values were estimated using a Monte Carlo simulation model, using assumptions that are consistent with those used at grant. For other performance-based awards, the fair values reflect the probable outcome of the performance vesting conditions as of each measurement date. | | (c) No other adjustments were required to be made in calculating compensation actually paid. |
CEO Pay Ratio
| Year | Name of PEO | [Plus] Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | [Plus] Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | [Plus] Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year that Vested During Fiscal Year | [Plus] Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years for Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | [Less] Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years that Failed to Meet Applicable Vesting Conditions During Fiscal Year | Total Equity Award Adjustments | | 2023 | Michael Colglazier | $2,426,065 | $(1,132,992) | $0 | $81,660 | $0 | $1,374,733 |
CEO Pay Ratio
| 66 | Virgin Galactic Holdings, Inc. |
CEO Pay Ratio
| (4) The dollar amounts reported in this column represent the average of the amounts reported for our NEOs (excluding persons serving as PEOs) (collectively, the “Non-PEO NEOs”) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the non-PEO NEOs (included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Doug Ahrens, Alistair Burns, Aparna Chitale, and Sarah Kim; (ii) for 2022, Doug Ahrens, Alistair Burns, Aparna Chitale, Sarah Kim, Swami Iyer, and Michael Moses; (iii) for 2021, Doug Ahrens, Michelle Kley, Michael Moses, Swami Iyer, and Jonathan Campagna; and (iv) for 2020, Jonathan Campagna, Michael Moses, Michelle Kley, and Enrico Palermo. |
CEO Pay Ratio
| (5) The dollar amounts reported in this column represent the average “compensation actually paid” to the non-PEO NEOs for the applicable fiscal year, as computed in accordance with Item 402(v) of Regulation S-K. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the average total compensation for the non-PEO NEOs reported in the Summary Compensation Table for the applicable fiscal year, as follows: |
CEO Pay Ratio
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | [Less] Reported Value of Equity Awards(a) | [Plus] Equity Award Adjustments(b) | [Equals] Average Compensation Actually Paid to Non-PEO NEOs | | 2023 | $2,065,458 | $1,179,016 | $326,441 | $1,212,883 |
CEO Pay Ratio
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. | | (b) The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
CEO Pay Ratio
| Year | [Plus] Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | [Plus] Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | [Plus] Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year that Vested During Fiscal Year | [Plus] Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years for Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | [Less] Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years that Failed to Meet Applicable Vesting Conditions During Fiscal Year | Total Equity Award Adjustments | | 2023 | $551,350 | $(233,994) | $0 | $9,085 | $0 | $326,441 |
CEO Pay Ratio
| (6) Represents cumulative Total Shareholder Return (“TSR”) of our common stock for the periods presented. |
CEO Pay Ratio
| (7) Represents weighted peer group cumulative TSR of the compensation peer group for the applicable year, as further described in this footnote (the “Compensation Peer Group,” weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. Our Compensation Peer Group for 2023 was comprised of the following companies: |
CEO Pay Ratio
| ●Aerojet Rocketdyne Holdings, Inc. ●Curtiss-Wright Corporation ●Fisker Inc. ●Hyliion Holdings ●Joby Aviation, Inc. ●Kratos Defense & Security Solutions, Inc. | ●Lordstown Motors Corp. ●Lyft, Inc. ●Maxar Technologies Inc. ●Mercury Systems, Inc. ●Moog Inc. ●Nikola Corporation | ●Peloton Interactive, Inc. ●Sunrun Inc. ●Vail Resorts, Inc. ●Velodyne Lidar, Inc. ●Wynn Resorts, Limited |
CEO Pay Ratio
Our Compensation Peer Group for 2022 and 2021 was comprised of the following companies:
CEO Pay Ratio
| ●Aerojet Rocketdyne Holdings, Inc. ●Brunswick Corporation ●Curtiss-Wright Corporation ●DraftKings Inc. ●Fisker Inc. ●Hyliion Holdings | ●Kratos Defense & Security Solutions, Inc. ●Lordstown Motors Corp. ●Lyft, Inc. ●Maxar Technologies Inc. ●Mercury Systems, Inc. ●Moog Inc. | ●Nikola Corporation ●Peloton Interactive, Inc. ●Sunrun Inc. ●Vail Resorts, Inc. ●Velodyne Lidar, Inc. ●Wynn Resorts, Limited |
CEO Pay Ratio
Our Compensation Peer Group for 2020 was comprised of the following companies:
CEO Pay Ratio
| ●Aerojet Rocketdyne Holdings, Inc. ●AeroVironment, Inc. ●Appfolio, Inc. ●Axon Enterprise, Inc. ●Cloudera, Inc. ●Cognex Corporation ●Coherent, Inc. | ●Cubic Corporation ●Emergent Biosolutions, Inc. ●FireEye, Inc. ●FLIR Systems, Inc. ●HEICO Corporation ●II-VI Incorporated ●Kratos Defense & Security Solutions, Inc. | ●Mercury Systems, Inc. ●National Instruments Corp. ●Proofpoint, Inc. ●PROS Holdings, Inc. ●PTC Therapeutics, Inc. ●Rogers Corporation |
CEO Pay Ratio
| (8) The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year (in thousands). | | (9) The PSUs granted to our NEOs in 2023 are eligible to vest based on the achievement of stock price goals measured based on the average of our stock price over a 20-trading-day trailing average during a three-year performance period. As such, Year-End Stock Price is the most important financial performance measure used by the Company to link compensation actually paid to our NEOs for the fiscal years ended December 31, 2023 to our performance. |
CEO Pay Ratio
| 2024 Proxy Statement | 67 |
DESCRIPTION OF RELATIONSHIP BETWEEN NEO COMPENSATION ACTUALLY PAID AND TSR PERFORMANCE
DESCRIPTION OF RELATIONSHIP BETWEEN NEO COMPENSATION ACTUALLY PAID AND TSR PERFORMANCE The Pay versus Performance Table demonstrates the link between Compensation Actually Paid (“CAP”) and Company performance. As demonstrated by the following graph, the CAP to our PEOs and the average amount of CAP to our other NEOs as a group during the periods presented were aligned with our cumulative TSR over the period presented. CAP generally decreases when our TSR decreases. TSR amounts reported in the graph assume an initial fixed investment of $100, and that all dividends, if any, were reinvested.
DESCRIPTION OF RELATIONSHIP BETWEEN NEO COMPENSATION ACTUALLY PAID AND TSR PERFORMANCE
| COMPENSATION ACTUALLY PAID VERSUS TSR |
DESCRIPTION OF RELATIONSHIP BETWEEN NEO COMPENSATION ACTUALLY PAID AND TSR PERFORMANCE
| 68 | Virgin Galactic Holdings, Inc. |
DESCRIPTION OF RELATIONSHIP BETWEEN NEO COMPENSATION ACTUALLY PAID AND NET INCOME
DESCRIPTION OF RELATIONSHIP BETWEEN NEO COMPENSATION ACTUALLY PAID AND NET INCOME The graph below shows the relationship between the CAP to our PEOs and the average amount of CAP to our other NEOs as a group during the periods presented with the Company’s net income over the periods presented. As a limited-revenue company, our net income is negative for the periods presented.
DESCRIPTION OF RELATIONSHIP BETWEEN NEO COMPENSATION ACTUALLY PAID AND NET INCOME
| COMPENSATION ACTUALLY PAID VERSUS NET INCOME (IN $MILLIONS) |
DESCRIPTION OF RELATIONSHIP BETWEEN NEO COMPENSATION ACTUALLY PAID AND NET INCOME
| 2024 Proxy Statement | 69 |
DESCRIPTION OF COMPENSATION ACTUALLY PAID AND YEAR-END STOCK PRICE
DESCRIPTION OF COMPENSATION ACTUALLY PAID AND YEAR-END STOCK PRICE Year-end stock price is the company-selected measure because stock price (hurdles) is the metric currently used in our PSU program. The graph below shows the relationship between CAP paid to our PEOs and the average amount of CAP to our other NEOs as a group during the periods presented with our year-end stock price in each of the periods presented. CAP is aligned with our year-end stock price over the periods presented. CAP generally decreases when our stock price decreases.
DESCRIPTION OF COMPENSATION ACTUALLY PAID AND YEAR-END STOCK PRICE
| COMPENSATION ACTUALLY PAID VERSUS YEAR END STOCK PRICE |
New Plan Benefits
| (1) Pursuant to our director compensation program, each non-employee director serving on our Board on the date of the annual stockholders’ meeting (other than Mr. Brambilla) will be awarded an RSU award covering a number of shares having an aggregate value equal to $125,000. | | (2) The aggregate number of RSUs to be granted to non-employee directors is not included in the table above as their equity awards will depend on the value of our common stock on the grant date. |