NEW YORK: A potential merger between SpaceX and Tesla would grant Chief Executive Officer Elon Musk majority voting control over his combined corporate empire without requiring him to hit ambitious operational milestones.
Musk told investors on a recent earnings call that special board committees at both companies formed to discuss a potential transaction.
An acquisition of Tesla by SpaceX would render Mars colonization and robotaxi targets moot for securing voting dominance, according to corporate governance experts who reviewed compensation filings.
At current valuations, Barclays analysts estimate that if SpaceX acquired Tesla, Musk would own 37 per cent of the combined entity while commanding 56 per cent of the total voting power.
The structure stems from a special class of SpaceX stock carrying 10 times the voting rights of standard shares. Tesla maintains no dual-class share structure.
Read: Tesla-SpaceX Merger May Be Announced by Dec 6: Barclays
“This package is a distraction from the real story, which is complete control,” said Charles Elson, founding director of the Weinberg Centre for Corporate Governance at the University of Delaware.
Under Tesla’s existing compensation plan, Musk would need to hit a $2 trillion market capitalisation threshold to unlock initial stock awards.
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In contrast, SpaceX granted Musk voting rights upfront when it issued stock awards, allowing him to accumulate 85 per cent voting control at the rocket maker before meeting operational targets.
Musk, Tesla and SpaceX did not respond to requests for comment about the merger discussions.
(With input from Reuters)
