SpaceX has disclosed to potential investors that Elon Musk cannot be removed from his roles as chief executive and chairman of the board without his personal consent, according to an excerpt from the company's initial public offering (IPO) filing reviewed by Reuters.
Super-Voting Shares Secure Musk's Position
The filing specifies that Musk "can only be removed from our board or these positions by the vote of Class B holders" — super-voting shares that carry ten votes each. Following the IPO, Musk is expected to control these shares, effectively making his removal a self-vote. The document further warns that if Musk "retains a significant portion of his holdings of Class B common stock for an extended period of time, he could continue to control the election and removal of a majority of our board."
This provision is layered on top of a dual-class share structure SpaceX plans to adopt at its IPO, a common arrangement among founder-led technology companies going public. Such structures grant founders and early investors greater control relative to public shareholders. However, even in those setups, boards typically retain formal authority to dismiss a CEO, even if founders can influence outcomes through voting power. The full implications of SpaceX's provision would depend on the details in the company's founding legal documents, according to corporate governance experts.
Unprecedented Control for Musk
The combined provisions give Musk an effective veto over any attempt to remove him, a level of control that experts say goes beyond the norm by tying removal directly to his own voting power. SpaceX warned prospective investors that this structure "will limit or preclude your ability to influence corporate matters and the election of our directors."
Lucian Bebchuk, a Harvard Law School professor specializing in corporate governance, noted: "This provision is not common. Usually removal of the CEO is a decision left to the board, and controllers rely on their power to replace the board."
Dual-Class Structures in Tech IPOs
Dual-class share structures have become a standard feature of founder-led technology companies going public in recent years. Facebook, which listed in 2012, granted super-voting shares to pre-IPO holders including Mark Zuckerberg, though voting power later concentrated as early investors sold down their stakes. More recent listings, such as Figma, have concentrated super-voting shares more directly in founders after an IPO.
SpaceX will be split into Class A common stock for public investors and Class B super-voting shares for insiders. Musk will hold a majority of the voting power, tying board control and executive authority directly to shares he controls, as previously reported by Reuters.
Departure from Tesla's Structure
This arrangement represents a departure from Tesla, which has a single share class. SpaceX is incorporated in Texas, following Tesla, which Musk shifted there after a Delaware court voided his $56 billion pay package for running the automaker. The compensation package was reinstated by the Delaware Supreme Court late last year.
SpaceX and Musk did not respond to requests for comment.
