Musk's $1T Pay Skips Milestones in SpaceX-Tesla Merger
SkimNews Take
A merger could circumvent the original compensation plan's intent by substituting a market-driven valuation for the operational milestones it was designed to incentivize.
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Tesla's 2025 CEO pay agreement contains a 'change in control' provision stating that 'the Operational Milestones shall be disregarded' in a merger or buyout, with only market capitalization used to measure performance
- The $1 trillion package was structured as 12 stock tranches tied to operational goals including 20 million vehicles delivered, 10 million FSD subscriptions, 1 million Bots, and 1 million commercial Robotaxis, all of which would be voided by a merger
- Tesla's market cap is described as inflated with a price-to-earnings ratio of approximately 400, 20-40x what would be considered reasonable even for a growth company, and merger talks typically push valuations higher
- SpaceX is preparing for a major IPO, and Musk pushed through a NASDAQ rule change shortening the post-IPO listing wait from one year to 15 days, while the IPO prospectus reportedly includes language permitting a merger within the 180-day lockup period
- Musk has a documented history of self-dealing through Twitter, paying $44 billion for the platform in 2022 and then engineering a $45 billion all-stock 2025 transaction selling Twitter from himself to xAI, which was subsequently sold to SpaceX
- The article warns that rapid NASDAQ inclusion of SpaceX would funnel passive index fund money — including ordinary retirement accounts — into the company at inflated valuations, and those shares could then be leveraged for an all-stock merger that further inflates both companies' valuations
Why it matters: This structure would let Musk receive the largest CEO payout in history without delivering any promised vehicles, subscriptions, or robotaxis — bypassing the 'performance-based' design shareholders were marketed and voted on. The dilution falls on every Tesla and SpaceX holder, including retirement accounts in index funds that would be forced to buy SpaceX at peak valuations before a merger.
