How do you remove Elon Musk, the wealthiest person on Earth and the chief of SpaceX, from SpaceX? Turns out, only Musk holds that power.
The aerospace manufacturer and space transport company revealed this to investors at a recent meeting.
Advertisement
How does Elon Musk maintain his super-voting rights?
The documents state that Musk maintains control through a dual-class share structure that gives him super-voting rights. Under this agreement, Musk “can only be removed from our board or these positions by a vote of Class B shareholders,” a class of shares he largely controls.
As a result, he can effectively retain his position as long as he continues to hold a significant portion of the Class B common stock for an extended period.
The discussion comes in the wake of Space X’s discussions to go public. Dual class share structures are common among founder-led tech companies, allowing founders and early investors to retain greater control than public shareholders, while boards typically hold the formal authority to remove a CEO.
Advertisement
However, in Musk’s case, corporate governance experts say the provisions go further. After reviewing the company’s founding and legal documents, experts noted that the structure effectively gives Musk “a veto over any attempt to remove him.”
Elon Musk's case, corporate governance experts say the provisions go further. (AP Photo) 
Share
