Elon Musk is considering changing Tesla's state of incorporation to Texas. The entrepreneur made a poll on his social network, X, if he should reincorporate his electric vehicle company. Voters were overwhelmingly in favor of the move, with 87.1% in support, compared to just 12.9% against.
Should Tesla change its state of incorporation to Texas, home of its physical headquarters?
— Elon Musk (@elonmusk) January 31, 2024
The survey came shortly after Delaware rescinded the $56 billion pay package the electric vehicle company awarded to Elon Musk in 2018. The sum, called the largest compensation in public corporate history, was deemed excessive by Chancery Court Chancellor Kathaleen McCormick.
The judge claims that the company's board of directors was not able to demonstrate "that the compensation plan was fair," per CNBC. Furthermore, they did not provide evidence that they had even negotiated with Musk.
The decision sparked anger from Musk who, again, turned to X to show his dissatisfaction: "Never incorporate your company in the state of Delaware," Musk said. Minutes later, he stated that his preference for business incorporation would be either Nevada or Texas:
Never incorporate your company in the state of Delaware
— Elon Musk (@elonmusk) January 30, 2024
I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters
— Elon Musk (@elonmusk) January 31, 2024
Musk intends to follow his own advice, as he stated after an overwhelming majority voted that Tesla be incorporated in Texas. He reported that he would hold a shareholder meeting as soon as possible to discuss the matter:
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. https://t.co/ParwqQvS3d
— Elon Musk (@elonmusk) February 1, 2024
