A merger between Tesla and SpaceX could create a shortcut for Elon Musk’s $1 trillion compensation package, according to analysis cited by ABMedia from The Wall Street Journal and Electrek.
The core issue is a “change of control” provision in Tesla’s pay package. Under that structure, if Tesla were to go through a control-changing transaction — with a merger involving SpaceX cited as one example — Musk’s award could be accelerated, and some of the toughest operating milestones could be waived. The market capitalization target, however, would still matter.
The original hurdle is steep
ABMedia said Tesla shareholders approved Musk’s compensation plan at a shareholder meeting in November 2025 with about 75% voting in favor. Instead of taking a salary, Musk would be paid in stock. At the top end, the package would give him about 423.7 million shares, equal to roughly 12% of Tesla, with a stated value of around $1 trillion.
To collect the full amount, Tesla would need to lift its market value to $8.5 trillion within 10 years — about eight times the company’s market capitalization when the plan was approved — while also hitting a series of operational milestones. If the package vests in full, Musk’s stake in Tesla would rise from about 13% to about 25%.
Why a merger matters
That is where the “change of control” clause becomes important. The analysis cited in the report says a Tesla-SpaceX merger could trigger faster payment and remove the hardest operating conditions, leaving the valuation threshold as the main barrier. In that reading, a merger would offer a far easier path than clearing each operating milestone one by one.
ABMedia said this is why some market observers have framed a Tesla-SpaceX combination as a shortcut, or even a “cheat code,” for Musk’s compensation plan. The outlet also noted that speculation around a possible merger has surfaced before.
Still only a market scenario
The report stops well short of saying a deal is imminent. It describes the merger idea as mechanically possible, but still speculative.
According to the article, prediction markets assign about a 17.5% chance that a merger would be announced before the end of the year. Relative valuations are another obstacle. Based on estimated 2026 earnings, Tesla is valued at about 200 times earnings, while SpaceX is valued at about 400 times, making a merger of equals difficult to structure.
ABMedia also said SpaceX President Gwynne Shotwell had suggested after the company’s IPO that a merger might “make life easier for Musk,” though no formal plan exists at this point. The article added that SpaceX went public in mid-2026 under the ticker SPCX, and that the market at one point valued the company at as much as $1.5 trillion.
For now, the clause is a potential route rather than a decided outcome. Whether that route is ever used depends on whether Tesla and SpaceX actually move toward a merger.