The boards of SpaceX and Tesla have each formed special committees to consider a possible merger. The special committees, made up of independent directors, were created at the request of shareholders, according to Elon Musk, CEO and largest individual shareholder of both companies.
“Because I’m a conflicting party, I can’t actually participate in the special committee discussions, so it’s this kind of… it’s a weird kabuki dance where two groups of people are talking, and I can’t participate in the conversation,” Musk said in response to a question during SpaceX’s third-quarter earnings conference call.
Musk did not name the members of these special committees, noting only that they were independent directors. Tesla has seven independent board members by Nasdaq listing standards, including board chairman Robyn Denholm, Ira Ehrenpreis, who is also committee chairman, former Tesla CTO JB Straubel, Joe Gebbia, Jack Hartung, James Murdoch and Kathleen Wilson-Thompson, according to the company’s Oct. 19 proxy filing.
Neither Musk, nor his brother Kimbal Musk, are independent. Denholm, Gebbia, Ehrenpreis, Hartung, Murdoch and Wilson-Thompson serve on various established committees overseeing auditing, compensation and corporate governance.
SpaceX lists six independent directors, including Ehrenpreis, who also serves as chairman of the company’s compensation and nominating committee. Randy Glein, Donald Harrison, Steve Jurvetson, Luke Nosek and Roelef Boutha are also considered independent directors.
Antonio Garcias, Musk and SpaceX President and COO Gwynne Shotwell are also on the board, but are not considered independent. Garcias, who served on Tesla’s board of directors, founded and runs Valor Equity Partners, which owns a 3.4% stake in SpaceX. Garcias’ company also financed SpaceX’s AI hardware purchases through sale-leaseback deals.
Musk said he supported the idea of the merger, but cautioned that it was not a guaranteed outcome.
“I think some people assume that a SpaceX and a Tesla Motor is a certainty, and I think that would be a stretch,” he said, adding that he thought it would be a good idea. “Ultimately, shareholders have to support it.”
The special committees did not reach agreement on the terms of the transactions, he said.
SpaceX’s IPO solidified Musk’s hold on the company – he has more than 50% of the voting rights – which would make it easier to gain support from SpaceX shareholders for a merger. That’s a much bigger hurdle at Tesla, where the company would need a 50% vote from all shareholders, not just those who vote, Musk noted.
“I think there’s a lot of merit in combining companies because we’re pretty much in the superintelligence singularity,” Musk said, adding that there’s a lot to be gained from cooperation on AI software development, robotics, SpaceX’s orbital AI data center project Starmind, and Terafab, the joint chipmaking project between Tesla and SpaceX.
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