Tesla won SEC approval on September 29 for a program that lets retail shareholders give a standing instruction to have their shares voted the way Tesla's board recommends. The no-action request was filed by Tesla's general counsel and Sullivan & Cromwell, and the SEC signed off the same day after what Tesla described as months-long discussions. The program is voluntary: participants can override any proposal or opt out for free, and they get a reminder at least once a year.
The timing is hard to ignore. Tesla has not scheduled its 2026 annual meeting, and Elon Musk has repeatedly hinted at a Tesla-SpaceX merger. Under the program's broadest option, a retail holder's shares would automatically back the board on a merger vote. Tesla argues retail investors are underrepresented, citing Broadridge data showing retail investors voted only 28% of their shares in the 2025 proxy season, compared with 76.6% for institutions. Tesla also says it spent more than $2 million on proxy solicitors at its last two annual meetings.
A merger could have major consequences for Musk's 2025 CEO Performance Award. The award normally requires market-cap and operational milestones, but a change in control drops the operational goals. If SpaceX acquired Tesla at a price valuing Tesla at $2 trillion, Musk would vest his first tranche without Tesla delivering a single robotaxi. The deal would need a shareholder vote, and the new retail voting program could mean a growing pool of shares already committed to the board's position.
Tesla's letter doesn't say how the standing instruction would work when the board makes no recommendation, as it did on the xAI investment proposal last year. ExxonMobil received similar SEC relief in September 2025, and Goldman Sachs got its own letter the day before Tesla's approval. The SEC agreed Tesla's framework applies to any company running the same program.