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Top Pension officials from New York and California have written to SpaceX CEO Elon Musk, expressing concern over the “extreme” governance structure of the commercial space flight company ahead of its public listing.
Comptrollers Express Concern
New York State Comptroller Thomas DiNapoli, as well as New York City Comptroller Mark Levine and California Public Employees’ Retirement System (CalPERS) CEO Marcie Frost, wrote a letter to Musk, accessed by Reuters on Wednesday. Notably, CalPERS had also expressed opposition to Musk’s $1 trillion Tesla Inc. pay package last year.
The officials objected to his power over SpaceX, voting control over the stock and his de facto power over the company CEO’s removal, the report said. The company will adopt a dual-class share structure, with Musk’s Class B shares each worth 10 regular shares, holding significant voting power.
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The letter also called the IPO the “most management-favorable governance structure,” as well as raising questions about Musk’s leadership of SpaceX, Tesla, xAI, The Boring Co. and Neuralink. The letter flagged CEO compensation packages for Musk, saying that the two companies could risk competing against one another.
The report said that SpaceX could adopt a controlled-company status, which would allow it to bypass requirements for a majority-independent board, or independent compensation and nominating committees during Musk’s tenure as CEO, chief technology officer and chair.
New York and California pension funds would become shareholders in the commercial space flight giant through passive allocations following its listing, the report said. Officials urged SpaceX to employ a one-vote, one-share structure, as well as separate the Chair and CEO roles.
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SpaceX’s IPO, Starship Plans
SpaceX, in filings for its IPO that’s targeting a $1.75 trillion valuation, outlined that the company’s orbital datacenter goals, as well as plans to colonize Mars, rely on unproven technology and carry significant risks. SpaceX also mentioned that the goals may not be commercially viable.
Meanwhile, Musk shared that figuring out how to create reusable heat shields, as well as developing reliable engines for the Starship rocket, remains a crucial challenge for SpaceX.
Photo courtesy: Shutterstock
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