Virgin Galactic Holdings, Inc. (NYSE:SPCE) announced Monday that it has entered into an amended and restated employment agreement with Chief Executive Officer Michael Colglazier, according to a statement based on a Securities and Exchange Commission filing. The space tourism company, which InvestingPro analysis shows is currently trading at $3.68 with a market capitalization of $154 million, faces significant operational challenges with weak financial health scores and rapidly depleting cash reserves.

The new agreement, effective July 29, 2025, replaces Colglazier’s previous contract and sets a five-year term, with automatic one-year renewals unless either party chooses not to extend. Under the revised terms, Colglazier’s annual base salary is set at $1,125,000 and will increase to $1,250,000 on April 1, 2026.

The agreement also establishes a target annual bonus equal to 150% of his base salary. In addition, Colglazier is eligible for a retention bonus totaling $2,250,000. Of this, $1,250,000 was paid by July 31, 2025, and the remaining $1,000,000 will be paid upon completion of the company’s first revenue-generating Delta spaceflight, contingent on his continued employment through that date.

If Colglazier’s employment ends before December 31, 2026, due to termination by the company for cause or resignation without good reason, he must repay the after-tax amount of the retention bonus received. No repayment is required if his employment ends following a change in control of the company.

Beginning in 2026, Colglazier will be eligible for an annual long-term incentive compensation award with a target value of $6,000,000. With the company’s next earnings report due on August 4, 2025, investors tracking Virgin Galactic’s performance can access deeper insights and 17 additional ProTips through InvestingPro, which indicates the stock is currently trading below its Fair Value.

The agreement also outlines severance terms for qualifying terminations, including a cash severance payment equal to two times his base salary, 24 months of company-subsidized healthcare coverage, and pro-rated accelerated vesting of outstanding performance-based long-term incentive awards at target levels. If termination occurs within 24 months after a change in control, these awards will become fully vested at target levels.

This information is based on a press release statement contained in the company’s SEC filing.

In other recent news, Virgin Galactic has reported a first-quarter loss of $2.38 per share on revenue of $460,000, a decrease from $2 million in the same quarter last year. The decline in revenue is linked to a pause in commercial spaceflights while the company focuses on its new Delta Class SpaceShips. Jefferies analyst Greg Konrad has adjusted the price target for Virgin Galactic to $8.00, down from $9.00, but retains a Buy rating, emphasizing the company’s secure financial position with $567 million in cash. Goldman Sachs maintains a Neutral rating on Virgin Galactic with a price target of $32.00, noting the company’s plans to commence Future Astronaut sales in the first quarter of 2026 and commercial spaceflights by mid-2026. The firm highlighted concerns about the company’s cash usage rate and the challenges in predicting revenue and profitability. Additionally, Virgin Galactic is exploring the potential development of a second spaceport in Italy. The company’s operational timeline includes Delta research flights in summer 2026 and passenger flights in fall 2026, with a current backlog of 675 customers. Goldman Sachs also assumed coverage of Virgin Galactic with a Neutral rating, acknowledging the potential but unproven market for space tourism.

Virgin Galactic updates CEO Michael Colglazier’s contract with new compensation terms

Virgin Galactic Holdings announced an amended employment agreement with CEO Michael Colglazier, including increased compensation and retention incentives. The company faces financial challenges, including declining revenue and cash reserves, while analysts adjust price targets and highlight operational timelines for spaceflights.