Tesla’s proxy for its 2026 annual meeting, filed today, confirms that one of its supposedly independent directors now sits on SpaceX’s board. Ira Ehrenpreis, who chairs both Tesla’s compensation committee and its governance committee, joined SpaceX’s board in February.
That’s one of several details in the filing that line up with a Tesla-SpaceX merger. There’s a three-item ballot, an auto-voting program that kicks in for the next vote, and Musk pay terms that pay out on a deal price alone.
Three items, no shareholder proposals
Tesla’s 2026 annual meeting is set for December 3 at Gigafactory Texas, for shareholders of record as of October 13.
They get three things to vote on. The first is re-electing Elon Musk, board chair Robyn Denholm and JB Straubel to three-year terms. The second is a non-binding say-on-pay vote, and the third is ratifying PwC as Tesla’s auditor, a job it has held since 2005.
That’s it. No shareholder proposals made the ballot this year. At least, not yet. Last year’s meeting featured several, including one asking the board to invest in xAI, which has since been absorbed by SpaceX.
The board also says it won’t bring back proposals to declassify itself or to drop Tesla’s supermajority voting requirements. Its 2025 attempt drew 73.6% participation but only 39.4% of outstanding shares in support, short of the bar. So the staggered board stays, and the three directors up this year would serve until 2029.
Denholm’s letter makes the pitch directly, telling shareholders that “a steady and experienced hand during this time of rapid technological change is essential to Tesla’s success.”
As chair, Denholm has long been criticized for letting Elon Musk do what he wants, unchecked by the board, but with Musk’s backing, it’s doubtful Tesla shareholders can get her out.
Musk’s 2025 pay: $158 billion on paper
The say-on-pay item asks shareholders to approve Musk’s 2025 compensation, which the proxy reports at $158,359,009,867. Against a median Tesla employee who made $62,786, that’s a CEO pay ratio of 2,522,203 to 1.
None of that was cash. The figure combines $132.3 billion for the 2025 CEO Performance Award, valued as if every milestone gets hit, and $26.1 billion for the August 2025 “interim award.” Musk forfeited the interim award in April after the Delaware Supreme Court reinstated his 2018 package.
Tesla adds its own “realized compensation” table showing Musk received $0 in 2025, for a pay ratio of “0.00:1.” Accurate for 2025. But the same proxy discloses that on June 16, 2026, Musk exercised all 303,960,630 of his 2018 options, covering the $23.34 exercise price by having Tesla withhold 17,531,857 shares. That implies a share price of about $405 and a value of roughly $116 billion at exercise.
Tesla’s income statement tells a third story. The 2025 award has generated $689 million in stock-based compensation expense so far: $162 million in 2025 and $527 million in the first half of 2026. Tesla only books expense for milestones it considers “probable,” and out of 12 operational milestones it rates exactly one as probable: 20 million cumulative vehicle deliveries.
FSD subscriptions, Optimus, robotaxis and every EBITDA target sit in the “not probable” bucket, worth $105.8 billion to $120.4 billion in unrecognized expense.
All of this comes after a year where Tesla’s net income fell 46% to $3.86 billion and revenue declined for a second straight year, to $94.8 billion.
How a merger pays Musk
As we noted when Tesla got the SEC’s OK to auto-vote retail shares, the 2025 award works differently in a change in control. The filings lay out exactly how.
Normally, each of the 12 tranches needs a market cap milestone, measured as a trailing average over six months and 30 days, plus an operational milestone. In a change in control, operational milestones drop out. Tesla’s market cap gets measured once: shares outstanding multiplied by the higher of the last closing price or the per-share value shareholders receive in the deal. Any tranche earned that way vests immediately instead of after 7.5 to 10 years.
With 3.95 billion shares outstanding, the first $2 trillion tranche works out to about $506 per share. A deal valuing Tesla at $3 trillion, or about $759 per share, would earn Musk three tranches, or 105.9 million shares, without a single robotaxi or Optimus milestone.
The April 2026 Implementation Agreement for the 2018 package follows the same logic. The 286.4 million restricted shares Musk received from the June exercise don’t vest until January 19, 2028. A change in control while he’s still CEO, or running product or operations, vests them right away.
Whether a Tesla-SpaceX combination would count as a change in control depends on how it’s structured. But both of Musk’s packages are now built to pay out fast if it does.
The auto-vote button arrives
This meeting is also the launch of Tesla’s “Voluntary Retail Voting Program.” Retail shareholders who vote through ProxyVote or Robinhood will be offered enrollment in a standing instruction for all future meetings.
There are two options. The first votes your shares with the board on everything. The second votes with the board on everything except a “Special Matter,” which Tesla defines as a contested director election or a merger, acquisition or divestiture that needs shareholder approval.
There’s no option to vote against the board. Shareholders who pick “all matters” will have their shares counted for the board’s position on a merger unless they log in and override it. Tesla’s only commitment is a reminder before that meeting.
The instructions don’t apply to the December 3 vote. They start with the next shareholder meeting, which is where a SpaceX deal would land.
Three of nine directors tied to SpaceX
Ehrenpreis isn’t the only link. Elon Musk runs SpaceX, and his brother Kimbal Musk, also a Tesla director, has served on SpaceX’s board. That’s a third of Tesla’s nine-member board.
Tesla’s board still classifies Ehrenpreis as independent. As chair of the Nominating and Corporate Governance Committee, his job description includes “considering questions of possible conflicts of interest of Tesla’s directors and officers.”
Tesla is also a SpaceX shareholder now. Its $2 billion investment in xAI converted into SpaceX Class A stock after SpaceX acquired xAI Holdings in February, and the purchase closed on March 12. The SpaceX S-1 put that stake at 18,990,195 shares, under 1% of the company.
The money flows the other way too. Tesla’s proxy shows $430.1 million in 2025 revenue from xAI, mostly Megapacks, and another $143.3 million from SpaceX, mostly vehicles.
On the Q2 earnings call in July, Musk said a combination would have to “be done with the appropriate process.”
Electrek’s Take
Ehrenpreis has been on Tesla’s board since 2007. The 2018 changes came out of the Tornetta mess. And the auto-vote program is sold as a fix for low retail turnout.
Put them side by side, though, and it reads like a checklist for a merger vote. Musk’s pay packages pay out quickly on a deal price. The director in charge of reviewing conflicts sits on the other company’s board. The board that would negotiate the deal is locked in through 2029. And retail shareholders are being offered a button that turns them into standing votes for the board, merger included, unless they pick the carve-out.
The problem is who’s on the other side of the table. Musk owns about 20% of Tesla and controls roughly 85% of SpaceX’s voting power. Whatever exchange ratio the two boards land on, he benefits from both ends of it. That’s exactly when Tesla shareholders need the most independent board possible. Instead, the board is getting closer to SpaceX, not further away.
Musk is right that this needs “the appropriate process,” but of course, he doesn’t really mean it. He has engineered Tesla’s board and shareholder base for years to answer to one person: him.
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