Musk Says Tesla Shareholders Will Vote on Moving Company From Delaware to Texas

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Elon Musk said Tesla shareholders will vote on moving Teslaโ€™s state of incorporation from Delaware to Texas after a Delaware judge voided his pay package.

Elon Musk said heโ€™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 carmakerโ€™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 carmakerโ€™s board of directors had failed to prove โ€œthat the compensation plan was fair.โ€

Mr. Musk responded to the ruling in a post on X: โ€œNever incorporate your company in the state of Delaware.โ€

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, โ€œShould Tesla change its state of incorporation to Texas, home of its physical headquarters?โ€

The poll had amassed 1.1 million votes at the time of publication, with over 87 percent voting โ€œyes.โ€

Reacting to the results of the poll, Mr. Musk wrote: โ€œThe public vote is unequivocally in favor of Texas! Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas.โ€

Mr. Musk then urged other businesses to follow suit.

โ€œChange your state of incorporation out of Delaware before they lock the doors,โ€ 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.

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