SpaceX IPO Filing Reveals Musk's Control Over His Removal

California. American billionaire businessman Elon Musk's private space company SpaceX has revealed an extraordinary arrangement in its proposed Initial Public Offering (IPO) related documents, according to which Musk's own consent will ultimately be required to remove Musk from the company's Chief Executive Officer (CEO) and Chairman of the Board positions.

According to a portion of the filing reviewed by international news agency Reuters, only the second-tier shareholder will be able to remove Musk from the company's board or top positions. Shareholder votes are required—these super-voting shares each have 10 votes and will remain under Musk's control even after the IPO. This creates a situation where the decision to remove Musk will practically depend on his own vote.

The document states that if Musk holds a large portion of the second-tier shares for a long time, he will be able to continuously control the process of selecting and removing the majority of the board members. This appears to solidify his power within the company.

SpaceX plans to adopt a two-tier share structure after the IPO—Class A for public investors and Class B super-voting shares for company insiders. While such a structure is common in tech companies run by founders, according to experts, SpaceX's proposed arrangement is much stricter than usual.

According to Harvard Law School professor Lucian Bebchuk, "This provision is not normal. Usually, the decision to remove the CEO is the responsibility of the board, and controllers use their influence by changing the board." According to him, SpaceX's structure directly links the authority to remove the CEO to Musk's own voting power, which is an unusual level of control. SpaceX has stated in a warning to potential investors that such a structure could limit or almost eliminate the ability to influence the company's important decisions.