A wooden ballot box beside a brass rubber stamp resting on blank proxy cards under an amber lamp.
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Tesla’s Standing-Vote Sign-Up Meets the All-Shares Bar Musk Set for a SpaceX Merger

Aaron Harme

Retail Tesla shareholders will be offered a standing instruction, a one-time enrollment that votes their shares with the board’s recommendation at every later meeting unless they vote on their own, under a program laid out in the proxy statement Tesla filed on Oct. 19, the filing that tells shareholders what’s on the ballot. A day later, on SpaceX’s third-quarter call, Elon Musk said a SpaceX merger would need, on the Tesla side, “a 50 percent vote of all shares, not just those who vote, but of all shareholders,” The Verge reported, and called that “quite a high hurdle to try to achieve.”

Musk said both boards have formed special committees of independent directors to study a merger and haven’t agreed on terms. He’s out of those talks: “Because I’m a conflicted party, I can’t actually be in the discussions of the special committees.” Holders get the enrollment screen right after voting for Tesla’s Dec. 3 annual meeting on platforms like ProxyVote.com or Say by Robinhood, and the instruction covers only later meetings whose proxy hasn’t been filed yet.

Enrollees pick one of two boxes: the first votes with the board on all matters, and the second votes with the board on everything except contested director elections and “any acquisition, merger or divestiture transaction” that needs shareholder approval, so on a merger those holders are back to voting for themselves or not at all. In the ProxyVote enrollment windows Tesla filed on Oct. 19, “Selection 1 - All Matters” sits on top and is shown already selected, with the carve-out box and the opt-out below it.

Tesla pitches the program as a fix for retail turnout. Its request to the SEC staff cites Broadridge data showing retail investors voted 28% of the shares they owned in the 2025 proxy season, against 76.6% for institutions, and says Tesla spent over $2 million on proxy solicitors to drive retail votes at its two most recent annual meetings.

Musk’s bar means turnout caps what any proposal can reach. Tesla’s 2025 management proposal to drop supermajority voting, the rules that require more than a simple majority to change the charter and bylaws, drew 73.6% participation and still got the support of only about 39.4% of total outstanding shares, so it failed.

By my math, that’s 10.6 points under the 50% Musk named, or roughly 419 million shares at the 2026 record-date count of 3,952,730,153. At 73.6% turnout, reaching half of all shares takes about 68% of the shares that took part.

The proxy lists Musk as the beneficial owner of 699,580,882 shares, 19.8% of the shares outstanding on Sept. 30. That figure leaves out the 423,743,904 restricted shares from his 2025 pay award, which sit under a voting agreement: an irrevocable proxy given to Tesla’s corporate secretary votes them “proportionately to the votes of all shares of the Company other than the Unearned Shares, including shares otherwise owned by Mr. Musk,” and the filing says he doesn’t have voting control over them. Those shares mirror whatever the rest of the room does, so they magnify turnout’s verdict in either direction.

On Sept. 29 the SEC’s Division of Corporation Finance issued a no-action letter, a staff promise not to recommend enforcement if a company does exactly what it described, and said that position covers any company that runs a retail voting program “in the same manner.” Tesla’s proxy says the letter makes the framework available to “Tesla and every other public company.”

Exxon Mobil got a narrower letter in 2025, and Tesla’s request says more than 100,000 Exxon holders had enrolled by March 1, 2026. The framework also allows central hubs where one sign-up can cover every participating company in an account.

Tesla’s request says standing-instruction votes are submitted once the company files its final proxy, before that proxy reaches shareholders, and the enrollment terms say an opt-out made after that filing only kicks in at the meeting after. For any merger vote Tesla ever calls, a first-box share would be counted with the board from the filing date, and the holder’s only way to change that for the meeting is to cast a different vote before the polls close.

Sources

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