Elon Musk said Tesla shareholders will vote on moving Tesla’s state of incorporation from Delaware to Texas after a Delaware judge voided his pay package.
Elon Musk said he’s fed up with Delaware after a court there nullified his $56 billion pay package, with the tech entrepreneur saying that Tesla would hold a shareholder vote on moving the carmaker’s state of incorporation to Texas.
A Delaware judge voided the payment package to Mr. Musk on Jan. 30 as part of a lawsuit filed five years ago by Richard Tornetta, a Tesla shareholder, who claimed the pay package was marred by conflicts of interest and other factors.
Chancery Court Judge Kathaleen McCormick wrote in her 200-page ruling that the electric carmaker’s board of directors had failed to prove “that the compensation plan was fair.”
Mr. Musk responded to the ruling in a post on X: “Never incorporate your company in the state of Delaware.”
Tesla was incorporated in Delaware before Mr. Musk joined the company. Delaware is a common destination for incorporation because of its business-friendly laws and low corporate taxes.
But for Mr. Musk, Delaware has been a place of clashes with courts, including when he was sued by Twitter to force him to go through with his pledge to buy Twitter, now X, for $44 billion.
In a follow-up post on the platform, the tech entrepreneur launched a poll asking X users, “Should Tesla change its state of incorporation to Texas, home of its physical headquarters?”
The poll had amassed 1.1 million votes at the time of publication, with over 87 percent voting “yes.”
Reacting to the results of the poll, Mr. Musk wrote: “The public vote is unequivocally in favor of Texas! Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas.”
Mr. Musk then urged other businesses to follow suit.
“Change your state of incorporation out of Delaware before they lock the doors,” he wrote in a post on X, while claiming that businessman John Malone, a fellow billionaire and chairman of Liberty Media, was being blocked from changing his incorporation from Delaware to Nevada.
