Tesla CEO Elon Musk has announced plans to hold a shareholder vote on relocating the company’s legal home from Delaware to Texas. This decision comes after a judge in Delaware invalidated Musk’s $55.8 billion pay package. Following the ruling, Musk took to social media to advise against incorporating companies in Delaware, a state known for its favorable tax environment. Judge Kathaleen McCormick ruled that Tesla directors did not adequately inform shareholders about the pay package, calling it “unfathomable” and ordering its cancellation. The pay deal had made Musk the richest person in the world. In response to the ruling, Musk conducted a poll on his social media platform X, formerly Twitter, asking if Tesla should change its state of incorporation to Texas. The majority of respondents voted in favor of the change. Tesla had already moved its corporate headquarters from California to Texas in 2021, citing tax policies and regulations as reasons for the relocation. The company also has plans to expand its electric car “gigafactory” in Texas. This is not the first setback Musk has faced in Delaware, as the same judge oversaw a lawsuit involving his attempted backing out of a contract to buy Twitter in 2022.
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