If you thought SpaceX going public would open Elon Musk to potential ouster by shareholders, think again. According to an excerpt of its IPO filing reviewed by Reuters, prospective investors who want to get in on the impending SpaceX initial public offering have been informed that Musk cannot be removed from his roles as CEO and chairman without his consent. Sure would be nice if the rest of us had that clause, huh?
Musk’s king status at the head of the company is the result of some finagling within SpaceX’s filings. Per Reuters, the company’s documents state that Musk “can only be removed from our board or these positions by the vote of Class B holders.” Those are shares that have ten votes apiece, and they’re reportedly currently controlled by Musk.
That power comes in addition to SpaceX’s planned dual-class framework, which most tech firms choose to allow their founders to maintain more control of the company, but that model does leave the head of the company vulnerable still, because the board can remove them. Musk’s Class B monopoly insulates him from that outcome. Per Reuters, the filing states 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.”
That reportedly gives Musk what would amount to veto power over any attempt to remove him. It’s the corporate equivalent of the “Isn’t there somebody you forgot to ask?” meme. The structure would give Musk such protection that SpaceX (and xAI and X) is warning investors that they shouldn’t count on having much control over the company. According to Reuters, they are being told Musk’s grip on the reins “will limit or preclude your ability to influence corporate matters and the election of our directors.”
As with most things Musk, he didn’t really invent this strategy, even if he takes credit for it. Mark Zuckerberg pioneered a similar strategy to maintain his control over Facebook and became the envy of Silicon Valley. Zuck holds as much as 90% of the company’s Class B shares—the ones with 10 times the voting power as the average shareholder. That control has allowed Zuckerberg to weather storms at Meta that another CEO might have had to answer to—like, say, burning about $80 billion pursuing a doomed-to-fail virtual reality project.
Given Musk’s volatility as a person, it’s not hard to imagine why a board might want to pull the eject lever and get a normal person—ideally one without any social media presence—in the seat. But to Musk’s credit, he’s smart enough to ensure that getting rid of him won’t ever be that easy.
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