Rocket Lab's US listing: Size of Peter Beck's payday revealed

A regulatory filing in the US has revealed a number of key details about Rocket Lab founder Peter Beck's financial position for the first time - including his salary, and the chunky holding he'll retain after his company lists on the Nasdaq.

Rocket Lab will go public through a merger with a special purpose acquisition company (spac) called Vector Acquisition in an exercise that will boost Rocket Lab's cash from $48m to $745m and ascribe the company a US$4.1 billion ($5.8b) valuation.

An SEC filing reveals founder and CEO Beck will be able to redeem up to US$30m worth of options with the listing, but still hold 13.1 per cent of voting stock with 54.5m shares worth approximately US$564m ($783m).

The filing also notes Beck sold US$10m worth of shares in March 2019 to US venture capital company Greenspring.

A Rocket Lab spokeswoman emphasised that the benefits of the listing would be widely shared, given some 40 per cent of Rocket Lab staff have a smallholding through an employee stock ownership scheme.

And thousands of Kiwis have already climbed on board for liftoff. Sharesies recently told the Herald that some 3000 of its users had already invested in the Nasdaq-listed, Cayman Islands-incorporated Vector Acquisition and it is in the top 100 most popular investments on its platform out of a possible 5000 options.

The filing also reveals that Beck had total remuneration of US$373,000 ($518,000) for the 12 months to December 30, 2020, comprising a base salary of US$327,000 plus "other compensation" (including company car expenses) of US$46,434.

The largest holder of voting stock after the Rocket Lab listing will be entities associated with long-time backer Khosla Ventures, a Silicon Valley venture capital fund founded by multibillionaire Vinod Khosla, with 27.6 per cent.

Another Silicon Valley VC outfit, Bessemer Venture Partners, will hold 19.5 per cent, the Australian Government's Future Fund 10.2 per cent (the NZ Super Fund passed on an early chance of investment) and entities associated with Vector Acquisition (which will bring US$300m cash to the party with the merger, as well as being the backdoor listing vehicle) less than 5 per cent.

An entity associated with US aerospace and defence giant Lockheed Martin, which made a strategic investment in Rocket Lab in 2015, will fall under a 5 per cent disclosure period post-listing, so does not appear in the filing. A spokeswoman for Rocket Lab said its holding would be under 2 per cent.

Tindall, ACC still onboard

Sir Stephen Tindall's K1W1 fund and ACC's investment arm will continue to own shares after the Nasdaq listing, a Rocket Lab spokeswoman told the Herald. Neither local immediately responded to questions on the size of their pre-and-post transaction stakes, which have not been detailed in the filing, but the Rocket Lab spokeswoman said both are below a 5 per cent disclosure threshold.

The nature of Rocket Lab's listing - via a merger with the already Nasdaq-listed Vector - means a lower disclosure threshold than with a traditional IPO.

Rocket Lab founder and CEO Peter Beck with a mockup of the nose cone for his company's larger new, crew-capable Neutron Rocket, due to be launched in 2024. Photo / File

Rocket Lab has earmarked most of the anticipated funds from its Nasdaq listing for development of its much larger, crew-capable Neutron rocket which, if all goes to plan, will launch for the first time in 2024 (from Rocket Lab's new launchpad at Nasa's Wallops Island facility in Virginia; the Kiwi-American company's Launch Complex 1 at Mahia is too small to accommodate the new model).

Listing delayed

On May 24, the company quietly pushed out its US listing timeframe from expected by June 30 to expected by September 30.

The move capped a terrible month for Rocket lab that saw it lose an Electron Rocket on May 15 and, later that month, ordered to pay an engineer $100,000 for unjustified dismissal before running into flak over keeping its $2.85m Covid wage subsidy in what turned out to be a profitable period.

Following an 11-month interplanetary cruise, the twin Photons - named Blue and Gold - will orbit the Red Planet. Using their dual viewpoint, they will then explore how the solar wind strips the atmosphere away from Mars, allowing a better understanding of how its climate has changed over time. Image / Artist impression

Fat pipeline

Earlier this month, Rocket Lab announced it had won a contract to design and build two satellites for a 2024 Nasa mission to study the Red Planet's atmosphere, and why much of it was stripped away.

That adds to a growing slate of interplanetary projects. Later this year, Rocket Lab will ferry a Nasa satellite into lunar orbit and, in a passion project, Beck wants to send a privately-funded Rocket Lab Photon to Venus by 2023 to follow-up on promising trace-signs of phosphine (a byproduct of elementary life) in the planet's clouds.

A recent Companies Office filing said Rocket Lab's NZ operation made a $1.1m profit for the year to December 31, 2020 (versus a $32,000 loss in 2019) as the pandemic kept revenue flat at $90 million - although the filing excluded costs of its US operation that pushed the company into the red to the tune of US$11.8m.

In an investor presentation, Rocket Lab projects US$1.6b in annual revenue by 2027, with its much larger Neutron rocket driving an earnings surge from its first launch in 2024.

It estimates Rocket Lab will make its first operating profit (US$26m) in 2023, with earnings rising to US$505m by 2027.