Musk Could Gain Control of Tesla Through SpaceX Merger Without Earning $1 Trillion Pay Package

Elon Musk could gain greater control over Tesla through a potential merger with SpaceX. He may achieve this without meeting the ambitious goals in his massive compensation packages.

The proposed deal could help Musk consolidate his corporate empire. It could also make some of his ambitious performance targets less important.

A SpaceX-Tesla merger could reshape Musk’s corporate control

Musk’s compensation agreements at SpaceX and Tesla include extraordinary long-term goals. These include establishing a human settlement on Mars, deploying one million robotaxis, and producing one million humanoid robots.

However, a merger could change everything.

According to Barclays analysts, SpaceX could acquire Tesla at current market valuations. In that scenario, Musk would own approximately 37% of the combined company. However, he could control around 56% of its voting power.

This difference comes from SpaceX’s special share structure. Certain shareholders receive ten times the voting rights of ordinary shareholders.

As a result, Musk could gain majority voting control of the combined company. He might achieve this without completing Tesla’s ambitious operational targets.

Why Musk’s $1 trillion Tesla compensation package is different

Tesla shareholders approved a compensation package worth up to $1 trillion for Musk in 2025. The agreement rewards him for meeting ambitious operational and market capitalization targets.

These goals include dramatically increasing Tesla’s valuation. They also include expanding its robotaxi business and producing humanoid robots on a massive scale.

Under the original agreement, Musk earns additional shares as he reaches these milestones. Each achievement also increases his voting power.

However, the agreement includes special provisions for a potential change in corporate control.

If SpaceX acquires Tesla, Musk could receive stock awards based on market capitalization milestones. He would no longer need to meet certain operational requirements.

Tesla currently has a market capitalization of approximately $1.6 trillion. Under the agreement, its valuation must reach $2 trillion in connection with a merger. Only then could Musk qualify for the first relevant stock award.

Even so, the initial payout would represent only a small fraction of the headline $1 trillion figure.

SpaceX’s compensation structure gives Musk voting power upfront

SpaceX follows a different approach.

The company awarded Musk shares tied to extraordinary objectives. These include establishing a million-person settlement on Mars. They also include building massive space-based data centers.

However, SpaceX’s compensation plan gives Musk voting rights immediately. He can vote those shares even before he earns their financial value.

This distinction matters greatly in a potential merger.

According to the Reuters report, Musk already controls approximately 85% of SpaceX’s voting power.

Therefore, SpaceX’s compensation structure could help him gain much greater influence over Tesla. He could achieve this without completing the futuristic objectives attached to his stock awards.

Could SpaceX change Musk’s compensation agreement?

Compensation and corporate governance experts believe SpaceX’s board could revise Musk’s pay plan after a merger.

The agreement does not clearly explain what happens during a transaction involving a combined company.

However, experts believe the board could adjust several provisions. These include market capitalization targets, earnings requirements, and stock awards.

Such changes could reflect the size and structure of the new business.

Alternatively, the board and Musk could preserve the existing milestones. They could simply modify the financial targets to account for the combined company’s value.

Either way, the changes could significantly affect Musk’s eventual compensation.

Still, experts caution against assuming that a merger would immediately unlock the full value of his pay packages.

Mars, humanoid robots and the bigger question of corporate control

Musk’s compensation plans raise a broader question. Do these agreements reward technological achievements, or do they primarily strengthen his corporate influence?

At Tesla, Musk has repeatedly expressed concerns about his voting power. These concerns have grown as the company expands its artificial intelligence and robotics ambitions.

He has argued that building a massive robot workforce requires sufficient control over Tesla. Otherwise, shareholders could potentially remove him from leadership.

A SpaceX-Tesla merger could address that concern. The transaction could give Musk a much stronger position within the combined business.

However, the merger remains a possibility, not a completed deal. Its final structure, financial implications, and governance arrangements remain uncertain.

For now, one thing stands out: Musk could achieve one of his most important corporate objectives through a merger.

He could gain greater control over his business empire without necessarily fulfilling the extraordinary promises attached to his multibillion-dollar compensation packages.

Elon Musk could secure greater control over Tesla through a potential merger with SpaceX without having to achieve the extraordinary milestones tied to his massive compensation packages, according to a Reuters analysis of the companies’ agreements.

The proposed combination of the electric vehicle manufacturer and the aerospace company could give Musk a shortcut to consolidating control over his corporate empire, potentially making some of the ambitious performance targets attached to his compensation less important.

A SpaceX-Tesla merger could reshape Musk’s corporate control

Musk’s compensation agreements at SpaceX and Tesla were designed around ambitious long-term objectives, including establishing a human settlement on Mars, deploying one million robotaxis, and producing one million humanoid robots.

However, a merger between the two companies could fundamentally change the equation.

According to analysts at Barclays, if SpaceX acquired Tesla at current company valuations, Musk could own approximately 37% of the combined business while controlling around 56% of its voting power.

That difference reflects SpaceX’s special share structure, which gives certain shareholders ten times the voting rights of ordinary share

Such an arrangement could give Musk majority voting control of the combined company without requiring him to complete the operational milestones included in Tesla’s compensation agreement.

Why Musk’s $1 trillion Tesla compensation package is different

Tesla shareholders approved a compensation package potentially worth up to $1 trillion for Musk in 2025. The agreement was structured to reward him for achieving a series of ambitious operational and market capitalization targets.

These include dramatically increasing Tesla’s valuation, expanding its robotaxi business, and delivering large-scale humanoid robot production.

Under the original agreement, Musk would gradually earn additional shares and voting power as he met those objectives.

However, the compensation agreement includes provisions addressing a potential change in corporate control.

If SpaceX acquired Tesla, Musk could potentially receive stock awards based on market capitalization milestones without having to meet certain operational requirements.

Tesla’s current market capitalization is approximately $1.6 trillion. Under the agreement, the valuation would need to reach $2 trillion in connection with a merger before Musk could receive the first relevant stock award.

Even then, the initial payout would be a fraction of the headline $1 trillion figure.

SpaceX’s compensation structure gives Musk voting power upfront

SpaceX’s compensation arrangement works differently.

The company awarded Musk shares tied to extraordinary objectives, including establishing a million-person settlement on Mars and building massive space-based data centers.

However, unlike Tesla’s plan, Musk received the voting rights associated with those shares immediately, even though he cannot collect their economic value until the specified milestones are achieved.

This distinction is particularly important in the context of a potential merger.

Musk already has approximately 85% voting control of SpaceX, according to the compensation arrangements described in the Reuters report.

Consequently, the SpaceX structure could help him obtain significantly greater influence over Tesla through a corporate transaction, regardless of whether he completes the futuristic objectives attached to his compensation.

Could SpaceX change Musk’s compensation agreement?

Corporate governance and executive compensation experts believe SpaceX’s board could potentially restructure Musk’s compensation plan following a merger.

The agreement is less explicit about how compensation would be handled in a transaction involving a combined company.

Some experts believe the board could adjust the market capitalization targets, earnings requirements, and stock awards to reflect the size and structure of the newly combined business.

Others suggest that Musk and the board could preserve the existing milestones while modifying their financial thresholds.

The potential changes could have significant consequences for how Musk ultimately receives compensation from the combined company.

Still, experts caution against assuming that a merger would immediately unlock the entire value of his compensation packages.

Mars, humanoid robots and the bigger question of corporate control

The debate surrounding Musk’s compensation highlights a broader issue: whether his financial incentives are primarily designed to reward extraordinary technological achievements or to strengthen his influence over the companies he leads.

At Tesla, Musk has previously expressed concerns about having sufficient voting control, particularly as the company expands its artificial intelligence and robotics ambitions.

He has argued that building a massive robot workforce without adequate control over the company could leave him vulnerable to being removed from leadership.

A SpaceX-Tesla merger could address that concern by giving him a much stronger position within the combined business.

However, the transaction remains a potential scenario rather than a completed deal, and its final structure, financial implications, and governance arrangements remain uncertain.

For now, the central takeaway is that Musk may be able to achieve one of his most important corporate objectives through a merger: greater control over his business empire, without necessarily having to deliver on the extraordinary promises attached to his multibillion-dollar compensation plans.