SpaceX has informed potential investors that its board will not require a majority of independent directors, according to a Reuters review of an IPO filing. This move underscores founder Elon Musk's strategy to retain control of the rocket and artificial intelligence company.
Anticipating a $1.75 trillion IPO this summer, SpaceX plans to adopt "controlled company status." This designation exempts it from needing a majority of independent directors or independent compensation and nominating committees, though an independent audit committee is still mandated.
This structure deviates significantly from most public companies, with only a small percentage of firms listed on the Russell 3000 index having insider-majority boards. SpaceX's move echoes Meta Platforms, which also maintains controlled company status despite having a majority of independent directors.
The filing follows reports indicating Musk and insiders possess super-voting shares. This mirrors a governance structure at Tesla, where critics have questioned board independence despite a majority of directors being classified as independent under Nasdaq rules.
Concerns over Tesla's board independence have led to significant legal battles, including a protracted dispute over Musk's $56 billion pay package. However, controlled company status may offer SpaceX greater flexibility in executive compensation and strategic arrangements.
SpaceX's board will oversee compensation tied to ambitious market capitalization milestones, potentially reaching $7.5 trillion. The filing also outlines extraordinary vesting goals, including establishing a human colony on Mars and completing massive non-Earth-based data centers.