For SpaceX IPO Investors, a Long List of Unfriendly Shareholder Policies

• SpaceX investors will face myriad governance challenges, starting with a dual-class share system that governance experts say will disadvantage IPO buyers.
• The SpaceX board is seen as friendly to Musk and not answerable to IPO share owners.
• SpaceX’s IPO filing details potential conflicts of interest that the board would be expected to police.

The SpaceX IPO is coming to market with hype and superlatives around what is expected to be the largest stock offering in history. But corporate governance experts warn of a raft of conflicts of interest around Elon Musk and his companies, along with near-total stifling of shareholders’ ability to influence the company they’re investing in.

The concerns start with the stock’s two share classes. While this is not unique to SpaceX, their structure and resulting imbalances let Musk decide essentially everything, from who sits on the nominally independent board that sets his compensation to any mergers and acquisitions—which analysts say could very well include his other companies, such as Tesla TSLA. Throughout the S-1 filing outlining the company’s financials, SpaceX detailed potential conflicts of interest that could benefit Musk and his other companies.

Governance experts say potential investors in SpaceX can look to Tesla for a model of what to expect. “If we take what we know of Tesla as the most prominent public company example of Musk’s corporate governance ethos, three things are clear: Musk places a high value on having significant control over the companies he runs, he’s willing to defy conventional corporate governance norms to acquire and maintain that control, and the other directors on the board have been at best reluctant to challenge him on behalf of independent shareholders,” says Lindsey Stewart, a proxy voting expert and director of institutional insights at Morningstar. “We’re seeing those factors play out at SpaceX even ahead of the company’s IPO.”

With Musk on track to control two of the largest companies in the stock market—and a meaningful percentage of many investors’ stock index funds—the implications are broad. “What happens if the unconventional governance we’ve seen at Tesla takes over a wider sway of the market?” Stewart asks.

SpaceX’s Dual-Class Shares to Limit Shareholder Voices

SpaceX is expected to go public in June with the ticker SPCX. The company is said to be targeting a valuation of some $1.75 trillion through an offering of up to $75 billion, which would make it the largest IPO in history. Under the umbrella of SpaceX are businesses focused on space travel, satellites, xAI (formerly Twitter), and the artificial intelligence assistant Grok.

Critically for investors, Musk, who founded the company in 2002, owns 849.5 million (12.3%) of the Class A shares and 5.6 million (93.6%) of the Class B shares, for a combined voting power of 85.1%.

According to its registration filing, SpaceX will have supervoting through Class A and Class B structures, similar to structures at Meta Platforms META and Alphabet GOOGL. As such, it will be a “controlled company” exempt from “certain corporate governance requirements,” including committees to nominate directors or set compensation that are made up entirely of independent directors. Musk will serve as CEO, chief technology officer, and chairman, and will control the election of directors and enjoy voting control. Class B investors will have “significant influence over the outcome of matters requiring shareholder approval,” the filing said. The structure “will limit or preclude your ability to influence corporate matters and the election of our directors,” according to the registration statement.

The “dual-class share structure ... prevents any effective challenge from independent shareholders,” says Morningstar’s Stewart. The scheme “effectively entrenches Musk as a CEO who can’t be deposed.” In other public companies, investors have frequently voted against dual-class structures, saying that votes should reflect the economic stake, Stewart says. And while some investors think “outsized voting powers for founders [are] ... appropriate for a limited period of time, most institutional investors do not want an indefinite dual class share scheme.”

In contrast, Tesla has a single share class, of which Musk nominally controls around 20%. “SpaceX mirrors what we have at Tesla, but it arguably exceeds Tesla’s concentration of power,” says Kristin Hull, chief executive officer of NIA Impact Capital and a frequent filer of shareholder resolutions at Tesla.

Musk’s Potential Conflicts of Interest

Musk controls a swath of companies, all of which pose potential conflicts of interest, including Tesla, SpaceX, Neuralink, and Boring Company. Governance experts point to a history of such conflicts materializing. In 2016, Tesla bought solar panel manufacturer SolarCity, run by Musk’s cousins, in a move criticized for burdening Tesla with debt and an unprofitable entity. A 2024 shareholder lawsuit alleges that Musk diverted value from Tesla’s AI initiative toward xAI. (SpaceX acquired xAI in February 2026.) SpaceX bought $131 million worth of Tesla’s Cybertrucks in calendar 2025 at the manufacturer’s suggested retail price. That equates to 1,500-2,000 trucks, depending on trim level and options, says Morningstar’s Stewart. That means SpaceX appears to have accounted for at least 6% of Cybertruck sales last year.

“He has so many overlapping ventures that conflicts of interest are almost unavoidable,” says Beth Williamson, head of sustainable equity research at Calamos Investment Management. Transactions have also involved SpaceX director Antonio Gracias and his company, Valor. The S-1 shows two failed sale and leaseback transactions for AI hardware with Valor in late 2025 and early 2026. Each transaction was valued at more than $5 billion. Gracias has previously served on the boards of other Musk companies, including Tesla, Boring, and Neuralink.

SpaceX’s Musk-Friendly Board

To police conflicts of interest, SpaceX’s board would be expected to put guardrails on management. Sitting on the board are Musk, president and COO Gwynne Shotwell, and CFO Bret Johnsen. Non-management directors include venture capitalist Ira Ehrenpreis, who is a longtime Musk ally and a Tesla director, venture capitalist Randy Glein, Antonio Gracias, Google executive Donald Harrison, venture capitalist Steve Jurvetson, and venture capitalist Luke Nosek.

“How will the conflicts of interest be managed?” asks Hull. “Elon doesn’t really do boundaries, and we don’t have a board to hold him accountable.”

Then there’s the question of how the board will handle Musk’s compensation. Already in the SpaceX filing is the extremely unusual provision that Musk was given the ability to vote more than 1 billion shares that he doesn’t yet actually own, but which are part of potential earnings should the company meet certain goals, such as the “establishment of a permanent human colony on Mars with at least one million inhabitants.”

Questions about Musk’s compensation and board independence have surfaced several times at Tesla. While the Delaware Supreme Court reversed a lower court decision that struck down a 2018 pay package for Musk worth $56 billion, it “did not reverse the rulings related to claims of corporate waste and Elon Musk’s influence on the board of directors in the remuneration process,” observes Morningstar Sustainalytics analyst Alina Olaru.

Then there’s the $1 trillion pay package at Tesla over 10 years, approved by shareholders last November, as long as the company meets a series of milestones. It was bundled with the 2025 employee equity incentive plan, so investors couldn’t vote separately on Musk’s package.

Will SpaceX Buy Tesla?

One of the biggest potential conflicted transactions may lie ahead. Before the SpaceX acquisition of xAI, speculation was rife that SpaceX would merge with Tesla. Morningstar analyst Seth Goldstein ticks off the advantages: Musk can freely draw on Tesla engineers for expertise, Tesla’s humanoid robots could be trained to work in space, and Tesla’s batteries could be used to power SpaceX’s datacenters, while Starlink could increase connectivity of Tesla cars. “My view is that Elon Musk ultimately wants to merge the two,” he said.

To be sure, a deal could draw regulatory concerns, since SpaceX is a large government contractor in the United States and Tesla has huge operations in China. “But if Elon wants to merge the two, the time is probably now, as this would be among the more friendly administrations to get a deal done,” Goldstein says.