SpaceX-Tesla Merger: Elon Musk Could Gain 56% Voting Control, Not $1 Trillion
A potential SpaceX-Tesla merger could give Elon Musk 56% voting control, but his $1 trillion Tesla pay package is far from an immediate payday. Here's what the deal could mean.
Raja Awais Ali
11/3/20265 min read
SpaceX-Tesla Merger: Elon Musk Could Gain 56% Voting Control, Not $1 Trillion
A potential merger between SpaceX and Tesla could significantly reshape Elon Musk's corporate empire, giving him greater control over the combined company without requiring him to achieve some of the ambitious performance targets attached to his existing compensation packages. However, gaining control would mainautomatically trigger a $1 trillion payday. The financial benefits Musk could receive would depend on the merger structure, the companies' valuations, the distribution of shares and decisions made by their boards.
According to a Reuters report published on November 3, 2026, the boards of SpaceX and Tesla have established special committees to examine a possible merger. Musk confirmed the development during a SpaceX earnings call last month. If SpaceX acquires Tesla or the two companies combine under a new corporate structure, Musk could secure majority voting control of the combined business without first completing the operational milestones required under Tesla's existing compensation agreement.
The difference between Musk's compensation arrangements at the two companies is central to understanding the potential impact of a merger. Tesla's compensation plan, approved by shareholders last year, could award Musk stock worth up to approximately $1 trillion. However, he must meet a series of market capitalization and operational targets before earning those shares and gaining additional voting power. The targets include putting one million robotaxis into operation, selling one million humanoid robots and increasing Tesla's market capitalization by nearly eight times.
Musk has not yet achieved any of the targets under this compensation plan. According to documents previously presented by Tesla's board, even if he completes every milestone, his voting power in the company would reach approximately 29%.
Musk has repeatedly highlighted the importance of gaining greater control over Tesla. During an earnings call in October 2025, he raised concerns about the possibility of being removed from the company after developing a large fleet of artificial intelligence-powered robots. His comments reflected his desire to secure stronger voting rights as Tesla expands beyond electric vehicles into robotics and autonomous technology.
SpaceX follows a different approach. Its compensation arrangement gives Musk voting rights over awarded shares upfront, even though he cannot receive their financial value until he achieves the required performance targets. This structure has helped him secure approximately 85% voting control of SpaceX, including the influence associated with his existing ownership.
The company's compensation plan links additional financial rewards to ambitious objectives, including establishing a human colony of one million people on Mars, developing space-based data centres and achieving specific increases in market capitalization. Under the agreement, Musk can exercise the voting rights attached to his awarded shares without first completing these milestones, but he cannot collect their economic value unless the conditions are met.
One of SpaceX's most ambitious targets involves developing space data centres capable of delivering 100 terawatts of computing capacity annually. Musk said earlier this year on X that this would represent approximately 200 times Earth's current electricity output. His proposed approach involves manufacturing satellites on the Moon and launching them into deep space.
The Mars objective is equally ambitious. Musk must establish a colony of one million people to qualify for the associated financial rewards. Even if SpaceX more than triples its value and half a million people reach Mars, he would not earn the shares tied to the million-person target unless the agreement's conditions are fulfilled.
Research firm Equilar estimates that the shares available under Musk's SpaceX compensation plan could be worth approximately $719 billion at the highest market capitalization target, based on the company's current outstanding shares.
A potential merger could provide Musk with a much faster route to gaining control over Tesla because of SpaceX's special share structure. Barclays analysts recently estimated that if SpaceX acquired Tesla at the companies' current valuations, Musk could own approximately 37% of the combined company while controlling around 56% of its voting power.
The difference comes from SpaceX's special class of shares, which carries 10 times the voting rights of ordinary shares. Tesla does not currently have an equivalent share structure. As a result, Musk could hold a majority of voting power in the combined company despite owning less than half of its total equity.
The compensation agreements at both companies also contain provisions addressing potential mergers and changes in corporate control. Tesla's agreement allows certain market capitalization targets to trigger stock awards following a change in control, such as an acquisition by SpaceX, without requiring Musk to complete the associated operational milestones.
Under these provisions, Tesla's market capitalization would be calculated using either its share price immediately before the merger or the value Tesla shareholders receive through the transaction, whichever is higher.
Tesla's market capitalization currently stands at approximately $1.6 trillion, according to the Reuters report. Under Musk's compensation plan, the valuation would need to reach at least $2 trillion in connection with a merger before he could qualify for any stock awards.
At that valuation, Musk could receive approximately $20 billion in Tesla shares. However, this would not represent an entirely new $20 billion gain because the compensation agreement only rewards increases in the company's stock value beyond the level established when the plan was announced in September 2025. Consequently, the actual financial benefit could be lower.
If Tesla's market capitalization reaches $2.5 trillion, $3 trillion or higher following a transaction, Musk could qualify for additional stock awards. However, six executive compensation experts consulted by Reuters said achieving such a substantial premium through a merger would be unlikely.
The situation is less clearly defined under SpaceX's compensation agreement. Unlike Tesla's plan, it does not provide equally specific details about how Musk's awards would be treated following a merger. Compensation experts believe SpaceX's board could significantly revise the arrangement after a transaction, adjusting its financial targets and share awards to reflect the valuation and structure of the combined company.
Kevin Murphy, a finance professor at the University of Southern California's Marshall School of Business and an expert witness in Tesla's defence of Musk's 2018 compensation package, believes the board could retain the existing plans while increasing market capitalization and earnings targets to account for the larger business. SpaceX previously incorporated Musk's compensation arrangement from xAI after acquiring the artificial intelligence company earlier this year.
Four of the six compensation experts consulted by Reuters said SpaceX's board could likely amend Musk's compensation plan. Such changes could allow the company to adjust the existing milestones and share awards rather than simply applying the original terms to a much larger corporate structure.
The broader implications of the proposed merger have also raised questions about whether Musk's ambitious performance targets would remain as important as they are today. Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware, argued that the central issue was corporate control rather than the futuristic objectives attached to Musk's compensation package.
Matthew Bloomfield, an associate professor of accounting at the University of Pennsylvania's Wharton School, described SpaceX's compensation arrangement as a plan built around ambitious objectives that could generate excitement among investors and the public.
Murphy, however, believes Musk is unlikely to seek an easy financial payout. He suggested that Musk would prefer to retain the existing targets and pursue the full value of his compensation rather than settle for a smaller immediate reward.
Ultimately, a SpaceX-Tesla merger could give Musk a significant advantage in controlling both businesses through a combined corporate structure. Barclays' estimate of 56% voting power, compared with approximately 37% economic ownership, highlights how SpaceX's special voting shares could influence the balance of power. Nevertheless, the potential transaction would not automatically deliver the full value of Musk's $1 trillion Tesla compensation package or the estimated $719 billion in SpaceX awards.
The actual financial outcome would depend on the merger terms, company valuations and any revisions approved by the boards. No final merger agreement has been announced, and Tesla, SpaceX and Musk did not respond to Reuters' requests for comment.
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