- Tesla CEO Elon Musk plans to move the company’s incorporation from Delaware to Texas following a judge’s invalidation of his $56 billion pay package from 2018.
- Musk conducted a poll on social media platform X, with over 87% of respondents supporting the move to Texas, leading him to announce a shareholder vote to transfer incorporation to Texas.
- Musk’s dissatisfaction with Delaware stems from a lawsuit filed by a Tesla investor, Judge McCormick’s ruling, and the criticism of Tesla’s board, while Texas holds personal significance for Musk and his businesses.
Additional Coverage:
Tesla CEO Elon Musk plans to move the incorporation of the company from Delaware to Texas. While Tesla’s physical headquarters are already in Austin, Texas, the company initially chose Delaware for its favorable legislation. However, after a judge invalidated Musk’s $56 billion pay package from 2018, he criticized the state and urged companies not to incorporate in Delaware. Musk conducted a poll on his social media platform, X, asking users whether Tesla should stay in Delaware or move to Texas. Over 87% of respondents supported the move to Texas, prompting Musk to announce a shareholder vote to transfer the state of incorporation to Texas.
Musk’s dispute with Delaware arose after a Tesla investor filed a lawsuit claiming that his 2018 pay package was excessive. Judge Kathaleen McCormick ruled in favor of the claimant, requiring the renegotiation of Musk’s stock options. In her investigation, McCormick also heavily criticized Tesla’s board. Musk is eager to take action promptly, although supporters on X have suggested that shareholders should be informed of the advantages and disadvantages of relocating before voting.
While the benefits of incorporating in Delaware are well-known, including the renowned Court of Chancery and various tax incentives, Musk seems dissatisfied with his treatment in the state. In contrast, Texas holds personal significance for Musk as his residence and the location of both Tesla and his freight tunneling company, Boring Co., headquarters. Musk has publicly supported Texas in its conflicts with the federal government over immigration, and the state’s Attorney General, Ken Paxton, has also targeted Musk’s adversaries.