Three of the largest US pension funds, managing a combined $1 trillion in assets, have demanded a meeting with SpaceX executives ahead of its speculated blockbuster IPO warning that its proposed corporate plan could be “the most management-favourable governance structure ever brought to the US public markets”.
In a published letter, chief executive of the $573 billion CalPERS Marcie Frost, New York State Comptroller Thomas DiNapoli and New York City Comptroller Mark Levine raised several governance concerns around SpaceX including the reported “perpetual super voting shares” and a CEO removal restriction, which requires the CEO’s own consent for removal.
The widely touted IPO is expected to happen in June, and according to Bloomberg reports, the company founded by billionaire Elon Musk confidentially filed for listing with the US Securities and Exchange Commission in April.
SpaceX acquired xAI in February, the artificial intelligence company behind Grok and also owned by Musk, and the combined entity is reportedly seeking a $1.25 trillion valuation in the public market.
“If SpaceX is committed to starting off on the right foot, and earning the trust of potential shareholders, they will adopt governance practices that support their sustainable and long-term growth in earnest,” New York’s Levine said in a media statement.
“The current proposed structure makes it nearly impossible to ensure strong safeguards are in place to preserve the company’s financial and reputational value, limits transparency, thwarts the opportunity for accountability, and overall, dangerously undermines investor rights.”
The NYC Comptroller’s office oversees the NYC Bureau of Asset Management, which invests assets on behalf of five public pension funds in the city which have a collective $306 billion in assets. The NY State Comptroller’s office administers the $291 billion New York State Common Retirement Fund.
“As SpaceX is poised to occupy a position of systemic importance in the public markets, its governance must at the bare minimum adhere to the baseline protections upon which long-term institutional capital depends,” DiNapoli said.
The funds are most concerned about the prospect that while public investors may hold significant equity in SpaceX, they would still have limited voting power. In the proposed structure, Musk is projected to retain approximately 79 per cent of the voting power while holding 42 per cent of the equity. This is due to the proposed dual-class share structure, with Musk and a small group of insiders set to hold a concentrated proportion of Class B shares which carry more voting power.
Musk could only be removed from the board, or as CEO and chair of the company, by a vote of Class B shareholders, the funds said.
“Removal of the company’s most powerful officer would, as a mathematical matter, require his own vote – essentially making him unfireable without his own consent,” the letter said.
“This level of insulation from accountability is virtually unheard of among any other large US issuer whose governing documents foreclose accountability to public owners on these terms.
“Compounding this, SpaceX reportedly intends to elect controlled-company status, which would allow it to bypass any requirements for a majority-independent board or for independent compensation and nominating committees, all while Musk simultaneously serves as CEO, CTO [chief technology officer], and chair on a nine-person board.”
In another part of his business empire, Musk was embroiled in a compensation fight with Tesla shareholders that stretched across several years. In 2018, Tesla awarded Musk a 10-year equity-based incentive package then valued at $56 billion, then the largest compensation package ever awarded in the history of the public markets.
While a Delaware court voided the package in January 2024, ruling it excessive and citing a flawed approval process, Tesla shareholders voted and approved the package a second time. The Delaware Supreme Court reversed the lower court’s decision and ordered the pay plan be restored in December 2025, but by then, Tesla shareholders had approved a new package one month prior which would see Musk receive payout potentially worth $1 trillion – smashing the previous compensation record in the public markets set by himself.
DiNapoli was a vocal critic of the pay package in the saga, stating in October 2025 that the Tesla board “must bear responsibility for enabling numerous governance failures that have contributed to brand damage, extraordinary stock volatility, legal risk, the erosion of shareholder rights, and non-existent oversight of management”.
The three pension funds have demanded a slew of changes regarding the SpaceX governance structure, including adopting a one share, one vote structure or a time-based sunset on super voting shares; eliminating CEO consent as a prerequisite for his own removal; ensuring an independent majority board and other measures designed to rein in Musk’s influence over the board.
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