Musk says Tesla to vote on moving incorporation from Delaware

Elon Musk on Thursday said Tesla will vote to move its state of incorporation, a day after a judge in the US state of Delaware voided his $56 billion compensation package.

“Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas,” he announced on his social media platform X, formerly Twitter.

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In a Wednesday ruling, Delaware Chancery Court Judge Kathaleen McCormick sided with a shareholder who claimed the Tesla CEO was overpaid, approving the annulment of Musk’s 2018 humongous compensation agreement worth as much as $55.8 billion.

Musk — the world’s richest person — wrote shortly after the ruling: “Never incorporate your company in the state of Delaware.”

He then launched a poll on X asking if Tesla should “change its state of incorporation to Texas, home of its physical headquarters?”

“The public vote is unequivocally in favor of Texas!” said the South African-born, American-naturalized entrepreneur.

Of the more than 1.1 million votes cast in the poll, 87.1 percent were in favor of Tesla changing its state of incorporation.

McCormick said in her ruling that Musk’s 2018 compensation plan was “the largest potential compensation opportunity ever observed in public markets by multiple orders of magnitude”.

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“The process leading to the approval of Musk’s compensation plan was deeply flawed,” she said, adding that the parties must now “confer” and submit a joint letter “identifying all issues, including fees, that need to be addressed to bring this matter to a conclusion at the trial level.”

Musk was sued along with Tesla and other members of the company’s board of directors.

The case went to trial in 2022.

© Agence France-Presse