See How a Tesla-SpaceX Merger Gives Musk a Shortcut to His $1 Trillion Payday

That kind of cars-and-rockets tie-up—the subject of widespread speculation among investors, and hinted at by Musk himself—would likely give him the tighter control he has long sought at Tesla. A hefty-enough price would also, in an instant, wipe away key performance targets standing between Musk and billions of dollars in shares.

“This $1 trillion—that was supposed to be a stretch,” said Mary Ellen Carter, a Boston College accounting professor who studies executive pay. “It turns out it isn’t really that hard. All you have to do is be bought.”

Musk has considerable say over any offer SpaceX makes for Tesla, thanks to his sweeping control over the rocket company. The upshot: Even a stratospheric bid would keep Musk in firm control of the combined company.

The record-setting equity award was “designed to align extraordinary long-term shareholder value with incentives that will drive peak performance from our visionary leader,” Tesla Chair Robyn Denholm told shareholders at the time.

Yet tucked into the bottom of the fifth page of the 16-page 2025 CEO Performance Award Agreement, a single sentence declares half the targets are as good as accomplished if Tesla is acquired or otherwise taken over.

That would leave only market-value targets to determine how many shares Musk gets. The same clause says those targets would be met or missed based on the final deal price—or on Tesla’s market capitalization immediately before any acquisition closed, if that is higher. Musk, SpaceX and Tesla didn’t respond to requests for comment.

“Tesla shareholders could think it’s terrible and the Tesla price drops” ahead of any deal, Carter said. “But it’s whatever SpaceX is willing to offer.”

Every $500 billion added to the deal price would deliver as many shares again, up to $7.5 trillion. An $8.5 trillion acquisition—more than six times Tesla’s recent market value—would deliver the pay package’s full 424 million shares. That is the number of shares that would have clinched the maximum $1 trillion stock award for Musk.

The company’s legal home of Texas largely protects SpaceX from shareholder lawsuits over any Tesla acquisition, unless plaintiffs own at least 3% of the company. That is a tall order, said Ann Lipton, a University of Colorado law professor specializing in corporate law. “Legally, he has the power to do whatever.”

Shareholders would have to bless any deal at Tesla, where Musk now holds just under 20% of the vote. Although Tesla is also in Texas, disgruntled shareholders there would have a clearer path to suing, raising the importance of getting investors on board, she said. “He needs to persuade the Tesla shareholders.”

There are other possible scenarios. SpaceX has a third, nonvoting class of shares but hasn’t issued any yet. Using those to acquire Tesla could avoid or reduce diluting the votes of existing SpaceX shareholders, albeit at the risk of resistance from Tesla investors.

Potential complications lurk, too. Musk might want to keep acquisition costs down to avoid cutting too deeply into the ownership and voting power, however limited, of existing SpaceX shareholders. Many are longtime supporters who signed on with the company’s initial public offering just weeks ago.

Write to Theo Francis at theo.francis@wsj.com and Andrew Mollica at andrew.mollica@wsj.com