Spacex · Ars Technica
SpaceX’s plan to go public will reportedly give CEO Elon Musk “virtually unchecked executive authority” and limit the rights
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◎ Multiple-sources
“Excerpts of SpaceX’s IPO registration statement reviewed by Reuters show the company is combining supervoting shares, mandatory arbitration, stricter rules on shareholder proposals and Texas corporate law to give Musk and other insiders broad control,” Reuters wrote.
Key facts
- In a January 2024 ruling against Tesla, a Delaware judge overseeing a shareholder lawsuit voided Musk’s $55.8 billion pay package, finding that most of Tesla’s board members were beholden to Musk
- Tesla subsequently awarded Musk a compensation plan that could pay him more than $1 trillion over a decade, and the Delaware Supreme Court reinstated Musk’s original pay package
- SpaceX reportedly plans to enforce a mandatory arbitration clause, taking advantage of a September 2025 policy statement issued by the Securities and Exchange Commission
- Bruce Herbert, CEO of Newground Social Investment, told Reuters that the plan “closes the voting door, the courthouse door and the proposal door simultaneously
Summary
SpaceX’s plan to go public will reportedly give CEO Elon Musk “virtually unchecked executive authority” and limit the rights of shareholders to sue the company. The policies “will erode typical shareholder protections in unprecedented ways,” and “the only person who can fire Musk is Musk, who will retain majority control through supervoting shares.” SpaceX reportedly plans to enforce a mandatory arbitration clause, taking advantage of a September 2025 policy statement issued by the Securities and Exchange Commission. The SpaceX IPO will prevent shareholder lawsuits by “mak it clear that anyone who owns shares ‘irrevocably and unconditionally’ waives all rights to pursue a jury trial,” Reuters wrote.