Leaders of three major U.S. public pension funds are raising red flags about SpaceX’s planned governance structure, calling it “extreme” and warning it weakens shareholder protections ahead of what could be the largest IPO in history.
In a letter to Elon Musk, New York State Comptroller Thomas DiNapoli, New York City Comptroller Mark Levine, and CalPERS CEO Marcie Frost objected to provisions that give Musk outsized voting control, veto power over his own removal as CEO, and mandatory arbitration for shareholder claims.
The pension leaders represent over $1 trillion in assets and would become involuntary shareholders if SpaceX joins major indexes like the Nasdaq 100. They warned that Musk’s simultaneous leadership of Tesla, X, xAI, and other firms creates conflicts of interest.
The letter also flagged Musk’s regulatory history, including SEC settlements and a jury fraud verdict, as well as related-party transactions, such as SpaceX’s all-stock acquisition of xAI and Tesla’s $2 billion investment in SpaceX before public shareholders existed.
The officials urged SpaceX to adopt one-share-one-vote, install an independent board, separate CEO and chair roles, eliminate special CEO protections, and require independent approval of related-party deals.