Elon Musk, the world's richest man, is exploring a mega-merger of his twin rocket and electric vehicle companies that would set up a corporate behemoth in a tech industry already littered with towering giants.
It could serve as a path for Musk to assert serious control over his corporate interests without achieving long-shot goals like getting one million robotaxis on the road, releasing an army of humanoid robots or establishing a sprawling human colony on Mars.
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So far, Musk has said the SpaceX (NASDAQ:SPCX) and Tesla (NASDAQ:TSLA) boards have set up a pair of committees with independent directors to evaluate the benefits and drawbacks of a merger.
"I think it would be a good idea, but it's really up to the special committees of both companies," Musk said in an Oct. 21 earnings call. He acknowledged that a SpaceX and Tesla merger is not a done deal by any stretch, given the large level of shareholder support needed to turn it into reality. As a "conflicted party," Musk said he is not able to weigh in on the committees' deliberations.
"Particularly on the Tesla side, we will need a 50% vote of all shares, not just those who vote, but of all shareholders," he said at the time. "And that's quite a high hurdle to try to achieve."
Musk's future compensation
Reuters reported that Musk's stock compensation following the merger would most likely award him just a small amount of the stock that was part of last year's massive Tesla pay package, at least at the start.
Last year, Tesla shareholders voted to approve a 12-step, $1 trillion compensation package paid out in stock once Musk succeeds in jacking up the company's valuation to $8.5 trillion from $1.4 trillion among other high-reach goals. Part of the deal also rested on Musk also being effective in shifting Tesla's operational focus to AI and humanoid robotics.
He currently has 20% voting power over Tesla, according to a June filing with the Securities and Exchange Commission. Musk previously stated an interest to control a quarter of Tesla to achieve his long-term vision without the threat of being removed.
"My fundamental concern with regard to how much voting control I have in Tesla is: If I go ahead and build this enormous robot army, can I just be ousted at some point in the future?" he said on an Oct. 2025 Tesla earnings call.
By comparison, Musk effectively controls SpaceX. In a late June filing with the SEC, Musk disclosed holding a 48.4% stake in the company, though he simultaneously owns a class of shares entitling him to 10 votes per share. All told, Musk commands 85% of voting power at SpaceX.
In a merger, Barclays analysts estimated that Musk could hold 56% of the voting power given his SpaceX shares possess much larger voting rights. His current compensation package at SpaceX would also potentially be set aside for a new one. In such a change of control event, when it comes to Tesla, one effect could be that Musk could receive stock payouts simply for simply meeting market cap goals, without the concern of operational goals.
Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware, told Reuters that control for Musk is the key. "It's irrelevant," he said of the compensation package and its long shot goals. "This package is a distraction from the real story, which is complete control."
And Kevin Murphy, a finance professor at USC's Marshall School of Business as well as an expert witness for Tesla who defended Musk's 2018 pay package, noted that he expected pay plans will likely be kept the same, with goals and awards adjusted to reflect the merger.
The goals may be extremely lofty, Murphy acknowledged, but Musk's top concern is not getting an "easy payday." He added that Musk is "not an all-or-nothing kind of guy. He doesn't want a couple cookies. He wants the whole bag."
Tesla and SpaceX did not immediately respond to Moneywise's request for comment.
SpaceX and Tesla's rough post-midterm stretch
SpaceX and Tesla have tumbled in financial markets following the robust Democratic sweep in the midterms. Many Democrats are pledging to step up their oversight of corporate America, and that includes Musk. His close business ties to the Trump administration are poised to attract much more scrutiny next year, which could throw up obstacles ahead of a merger.
On Nov. 4, amid a massive tech rout that had the Nasdaq trading down around 5%, SpaceX closed its trading session at about $123 per share, a roughly 11% drop compared to market close on Monday, the day before the election.
Tesla saw a similar plunge. On Thursday afternoon, the EV giant closed at $344 per share, a 12% decline compared to its pre-election price.
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This article originally appeared on Moneywise.com under the title: 'He wants the whole bag:' A SpaceX-Tesla merger could help Elon Musk gain major control — without hitting lofty goals
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
