Elon Musk’s SpaceX is barreling toward what could be the biggest IPO in history, but the three largest US public pension systems demanded he rewrite the governance structure first.

The three oversee more than $1 trillion in retirement assets between them.

What The Pension Funds Want Stripped Out

The letter objects to a dual-class structure that would hand Musk roughly 80% voting control and a provision allowing only Class B shareholders to remove him as CEO or chair.

SpaceX would reportedly be the first major US company to require mandatory arbitration for shareholder claims under federal securities laws, killing class actions entirely.

SpaceX’s reincorporation in Texas adds another shield. State law there requires shareholders to hold 3% of outstanding stock to file a derivative suit, which at a $1.75 trillion valuation runs into tens of billions of dollars worth of stock.

The officials urged SpaceX to adopt a one-share, one-vote structure, split the chair and CEO roles, and install an independent board majority.

Why Tesla Shareholders Should Be Watching

CalPERS opposed Musk’s $1 trillion Tesla (NASDAQ:TSLA) pay package last year, and the same coalition is now targeting his next vehicle.

The letter flagged Musk’s overlapping roles at Tesla, xAI, Neuralink, X and The Boring Company, arguing Tesla and SpaceX are essentially competing for his time.

The pension chiefs also pointed to Tesla’s reported $2 billion investment in SpaceX in the first quarter and SpaceX’s all-stock acquisition of xAI in February as related-party deals done before any public shareholder oversight existed.

Polymarket traders are still pricing in a 71% chance SpaceX completes its IPO by the end of June and an 87% chance it finishes 2026 as the largest IPO by market cap.

Polymarket Flips On Lead Bank

Nasdaq has proposed rule changes that would let SpaceX enter the Nasdaq-100 after just 15 trading days and weight its small float at five times its actual size, forcing passive funds to buy the stock.

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