SpaceX IPO Faces Backlash Over Elon Musk’s Control and Governance Structure

Three of the largest U.S. public pension funds have raised serious concerns about SpaceX’s planned initial public offering, warning that Elon Musk’s level of control over the company could weaken shareholder rights and corporate accountability. The objections were outlined in a letter sent by New York State Comptroller Thomas DiNapoli, New York City Comptroller Mark Levine, and California Public Employees’ Retirement System CEO Marcie Frost.

The pension leaders criticized what they described as an “extreme” governance structure tied to the highly anticipated SpaceX IPO, which could become the largest public offering in U.S. history. SpaceX is reportedly targeting a valuation of $1.75 trillion while seeking to raise approximately $75 billion from investors.

According to the officials, Musk would retain overwhelming voting power through super-voting shares, giving him authority over major corporate decisions, including his potential removal as CEO. The proposed structure would also reportedly limit shareholder lawsuits through mandatory arbitration clauses and strict litigation requirements.

The pension funds warned that SpaceX’s governance policies could create major risks for long-term investors, especially due to Musk’s leadership roles across several companies including Tesla, X, xAI, Neuralink, and The Boring Company. They argued these overlapping responsibilities may lead to conflicts of interest and divided attention.

Additional concerns were raised over SpaceX’s reported move to adopt “controlled-company” status, which would allow the company to avoid certain independent board requirements typically expected from publicly traded firms. The letter also highlighted recent transactions involving Musk-linked companies, including SpaceX’s acquisition of xAI and Tesla’s reported investment in SpaceX.

The pension officials urged SpaceX to adopt stronger shareholder protections, including a one-share, one-vote structure, an independent board majority, and the removal of mandatory arbitration policies before the company moves forward with its IPO plans.