Report: SpaceX IPO gives Musk unchecked power and forbids investor lawsuits
Anyone who buys into SpaceX IPO must waive right to sue the firm, report says.
SpaceX's plan to go public will reportedly give CEO Elon Musk "virtually unchecked executive authority" and limit the rights of shareholders to sue the company. The plan, reported by Reuters today, could prevent shareholder lawsuits like the one that held up a lucrative Musk pay package at Tesla.
"Excerpts of SpaceX's IPO registration statement reviewed by Reuters show the company is combining supervoting shares, mandatory arbitration, stricter rules on shareholder proposals and Texas corporate law to give Musk and other insiders broad control," Reuters wrote. "At the same time, it sharply limits investors' ability to challenge management, sue in court and force votes on governance issues."
Reuters said the policies "will erode typical shareholder protections in unprecedented ways," and "the only person who can fire Musk is Musk, who will retain majority control through supervoting shares."