Press release: Immediately Contact: Mark Johnson, 518-474-4015 NEW YORK STATE COMPTROLLER DiNAPOLI, CalPERS CEO MARCIE FROST AND NYC COMPTROLLER MARK LEVINE RAISE ALARM ON REPORTS OF PROPOSED SPACEX IPO GOVERNANCE Warn That Reported Novel and Extreme Governance Structure Would be the Most Management-Favorable Ever Brought to U.S. Public Markets at this Scale New York State Comptroller Thomas P. DiNapoli, on behalf of the New York State Common Retirement Fund, along with California Public Employees’ Retirement System CEO Marcie Frost and New York City Comptroller Mark Levine, in a joint letter to SpaceX executives, raise objections to the reported proposed governance structures of SpaceX, which is preparing for its initial public offering, DiNapoli announced today. The investors hold combined assets under management exceeding $1 trillion for millions of working and retired public servants, including teachers, firefighters, police officers, nurses, and their beneficiaries. The letter follows press reports detailing a novel and extreme governance structure within SpaceX’s confidential draft registration statement. While the registration statement has not yet been made publicly available, as reported, the proposed structure would strip away fundamental investor protections by combining perpetual super-voting shares concentrated in Elon Musk, with a CEO removal provision that would insulate Musk with an effective veto over his own firing. The reported governance plan also would shield management from accountability through mandatory shareholder arbitration, controlled-company status, and restrictive Texas-based legal barriers to derivative litigation, while allowing one executive to maintain unprecedented control as CEO, CTO, and chair despite significant outside commitments. “The reported governance structure for SpaceX presents significant risks to long term-investors,” DiNapoli said. “As reported, these provisions include super voting shares for a select few, mandatory arbitration of shareholder claims, nearly insurmountable barriers to executive accountability, and limits on shareholder legal actions. This structure would leave shareholders with virtually no recourse over how the company conducts business. This is anathema to the transparency and legitimate board oversight required for a major publicly traded corporation. As SpaceX is poised to occupy a position of systemic importance in the public markets, its governance must at the bare minimum adhere to the baseline protections upon which long-term institutional capital depends.” “Sound governance is fundamental to a company’s long-term success, and we are concerned about the many glaring governance red flags including a lack of genuine checks and balances for Elon Musk as CEO,” Levine said. “The current proposed structure makes it nearly impossible to ensure strong safeguards are in place to preserve the company’s financial and reputational value, limits transparency, thwarts the opportunity for accountability, and overall dangerously undermines investor rights. If SpaceX is committed to starting off on the right foot, and earning the trust of potential shareholders, they will adopt governance practices that support their sustainable and long-term growth in earnest.” The letter urges SpaceX to revise its proposed structure before its final Form S-1 is filed. Specifically, the investors are seeking reforms, including: a one-share, one-vote structure or a time based sunset on super-voting shares; a majority-independent board with a separation of the chair and CEO roles; withdrawal of mandatory arbitration clauses for shareholder claims; and an independent-committee process to review related-party transactions across Musk’s affiliated entities. The investors requested a meeting with SpaceX management to discuss these reforms. “We are not merely seeking a seat at the table to discuss these concerns; we are seeking the fundamental rights that protect shareholders to be upheld by SpaceX management,” DiNapoli said. The full text of the letter is available at: https://www.osc.ny.gov/files/press/pdf/spacex-ipo-letter.pdf ### The New York State Common Retirement Fund is one of the largest public pension funds in the United States and has consistently been ranked as one of the best managed and best funded plans in the nation.