Leaders of the New York State Common Retirement Fund and California Public Employees’ Retirement System (CalPERS) issued a joint statement on May 7 opposing SpaceX’s corporate control structure, terming it 'extreme.' Together managing over $600 billion in assets, the funds argue that SpaceX’s governance model undermines shareholder rights and threatens long-term investor value, raising concerns about concentration of control in a private company with significant institutional backing 1.
The core of the opposition is SpaceX’s dual-class share structure, which grants Elon Musk shares carrying ten times the voting power of ordinary shareholders. The pension funds describe this setup as 'detrimental to minority investors,' highlighting the imbalance it creates. Holding stakes via private market investments, they have urged SpaceX to adopt a 'one-share, one-vote' system, a governance principle widely supported by advocates seeking fair shareholder influence 1.
The pension leaders underscored that SpaceX’s structure 'concentrates undue control in the hands of a single individual,' thereby increasing risks for institutional investors. The New York State Common Retirement Fund, with assets around $260 billion, and CalPERS, the largest U.S. public pension fund managing $480 billion, have a history of promoting stronger shareholder protections in both public and private firms, reflecting their long-term investment approach 1.
Valued at over $180 billion following its 2023 funding round, SpaceX remains privately held, exempting it from public market mandates on transparency and shareholder rights. Nonetheless, the pension funds’ opposition signals increasing discomfort among institutional investors with private companies maintaining governance structures that limit investor influence, especially when those companies carry high valuations and public prominence 1.
The funds’ position aligns with a broader trend where institutional investors challenge dual-class share models. In 2022, the Council of Institutional Investors urged companies to phase out such structures, citing risks of founder entrenchment and misalignment with shareholder interests. SpaceX’s governance, which grants Musk near-total control, draws comparisons with tech giants like Meta and Alphabet, both of which have faced similar scrutiny over founder voting rights 1.
While CalPERS and the New York fund have not disclosed the size of their SpaceX holdings, their combined weight could pressure the company to rethink its governance. Analysts note that although private firms like SpaceX are not legally bound to public market standards, opposition from major institutional investors may deter future funding or complicate a potential public listing. SpaceX has not provided comment on the pension funds’ statement 1.
This opposition emerges amid intensified regulatory scrutiny of Elon Musk’s ventures. In 2023, the U.S. Securities and Exchange Commission investigated Tesla over governance concerns related to Musk’s dual role as CEO and board chair. Though SpaceX operates independently from Tesla, the pension funds’ criticism highlights ongoing unease regarding Musk’s consolidated influence across his portfolio of companies 1.
Observers suggest the pension funds’ public stance may encourage other institutional investors to raise similar governance concerns. Large asset managers such as BlackRock and Vanguard have previously opposed dual-class share structures in public companies, arguing they reduce accountability. For SpaceX, this challenge arrives as it advances ambitious projects like its Starship rocket and Starlink satellite network, both of which depend on sustained investor trust 1.