Inside Tesla–SpaceX merger plan: Elon Musk may gain massive $110 bn from a $3.5 trn deal but what will shareholders get?

Tesla–SpaceX merger plan could add more than $110 billion to Elon Musk's fortune, simply by accelerating the vesting of Tesla shares that otherwise wouldn’t vest until 2028, the Bloomberg Billionaires Index calculation shows. Further, the proposed tie-up could also unlock billions more from Musk’s latest Tesla compensation package, depending on the details of a merger

Musk confirmed during SpaceX’s earnings call that the two companies had formed special committees to explore a potential merger.

“We are pretty much in the super-intelligence singularity,” said Musk. “There’s a lot to be gained from cooperating.”

However, the potential merger raises several questions, including what Tesla shareholders could receive from a transaction and how it would affect executive compensation.

According to Bloomberg, a change-in-control event could trigger the vesting of approximately 286 million Tesla shares awarded to Musk under an earlier compensation arrangement. These shares are currently worth more than $110 billion, and are excluded from his net worth calculation as they have not yet vested.

Musk’s original “moonshot” pay package gave him about 304 million options contingent on Tesla meeting certain market-cap and operational milestones, all of which were met. Musk and the board negotiated an implementation package earlier this year that allowed him to net-settle the options, reducing his need for cash to pay taxes and exercise costs. In return, the roughly 286 million shares he received won’t vest until January 2028 as an added incentive for him to stay at the company.

Under the agreement, the shares would vest immediately following a change-in-control event.

Musk’s 2025 compensation package could also benefit. The award, potentially worth nearly $1 trillion if fully earned, includes targets such as delivering 20 million vehicles, putting one million robotaxis into commercial operation and delivering one million Optimus robots.

However, if a merger triggers the package’s change-in-control provisions, operational milestones would be disregarded and his payout would be calculated using Tesla’s market value in the deal.

If Tesla is valued at $2 trillion, the first market-capitalisation milestone, Musk would unlock shares with a net value exceeding $6 billion. Tesla is currently valued at approximately $1.5 trillion.

The merger’s implications for shareholders will depend on its structure. Change-in-control provisions could apply if Tesla’s existing shareholders end up with less than 50% of the voting power in the surviving company or its parent.

“Whether these change-in-control provisions technically trigger will depend on how the deal is structured,” said Jason Schloetzer, an associate professor at Georgetown University’s McDonough School of Business.

He added that shareholders on both sides should scrutinise the proposed valuation and the committees’ response to Musk’s incentives.

Tesla and SpaceX did not respond to requests for comment.

Meanwhile, Musk’s SpaceX compensation awards could be adjusted to account for the merger. Schloetzer said a fresh compensation package for Musk would “seem a foregone conclusion”, given the companies’ history of granting large equity awards.

“The combined company’s board would face the familiar argument that new awards are needed to keep Musk engaged,” he said.

Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. <br> She writes extensively about how money works in everyday life—helping readers navigate personal finance decisions. <br> As AI reshapes investing behaviour, capital is increasingly flowing into decentralized ecosystems, redefining how assets are managed, traded, and valued. She focuses on explaining how money flows within frameworks like Distributed Ledger Technology (DLT), DeFi protocols, and crypto markets—while also exploring what the future of money could look like in a trustless, programmable financial world. <br> She also focuses on immigration-related issues, simplifying complex topics around visas, passports, overseas financial planning, and the many practical challenges Indians face while moving or living abroad. <br> Alongside personal finance, Sanchari has a strong understanding of international politics, contemporary and historical conflicts, and global state decisions. She closely tracks how geopolitical developments influence economies, markets, and individual financial choices, bringing together finance and global affairs in her reporting. <br> She began her career as a desk editor, which gave her a strong foundation in news writing. Over time, her interest naturally shifted toward personal finance. Before joining Mint in 2020, she worked DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. At Mint, she got an opportunity to expand her coverage to include immigration and geopolitical developments while continuing to closely follow personal finance trends and market movements.As a journalist, she is committed to accuracy, intellectual rigour, and fairness. <br> She is an English Major and her work took her across cities including Delhi, Mumbai, and Pune. Living independently from an early age gave her firsthand experience in managing life and money on her own. This practical exposure sparked her strong interest in personal finance. <br> Outside the newsroom, Sanchari is a sports enthusiast who regularly plays lawn tennis and squash. In her younger years, she was also a national-level badminton player.

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