Musk wants Tesla investors to vote on switching the carmaker’s corporate registration to Texas
File - Tesla CEO Elon Musk attends the first plenary session of the AI Safety Summit at Bletchley Park, on Nov. 1, 2023 in Bletchley, England. A Delaware judge this week invalidated Elon Musk’s $55.8 billion Tesla pay package, saying it is too big and that Musk set the terms with a complaint board. (Leon Neal/Pool Photo via AP, File)
Elon Musk wants Tesla investors to decide on moving the company’s corporate listing to Texas after a Delaware court decided he shouldn’t get a multibillion-dollar pay package.
The electric car company’s CEO said early Thursday that Tesla would get shareholders to vote on whether to switch its corporate registration to Texas, where its physical headquarters is located.
“Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas,” Musk wrote on his social media platform X, formerly known as Twitter.
Musk had polled X users earlier on the same question, with 87.1% of 1.1 million respondents voting yes. “The public vote is unequivocally in favor of Texas!” he wrote.
Musk, who has previously polled people on X before making decisions, moved Tesla’s headquarters to Austin, Texas, from California in 2021.
His announcement comes after a judge in Delaware, where the company is currently registered, ruled Tuesday that Musk is not entitled to a landmark compensation package potentially worth more than $55 billion that was awarded by Tesla’s board of directors.
After the ruling, Musk took to social media to to express his displeasure.
“Never incorporate your company in the state of Delaware,” he wrote in one post. He later added, “I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters.”
The ruling came five years after shareholders filed a lawsuit accusing Musk and Tesla directors of breaching their duties and arguing that the pay package was a product of sham negotiations with directors who were not independent of him.
The defense countered that the pay plan was fairly negotiated by a compensation committee whose members were independent and had lofty performance milestones.