Elon Musk has announced plans to relocate Tesla’s legal headquarters from Delaware to Texas following a judge’s decision to nullify his $55.8 billion pay package.
The billionaire, 52, took to his X site to warn against incorporating companies in Delaware – stating: “Never incorporate your company in the state of Delaware.”
Judge Kathaleen McCormick, presiding in Delaware, criticised the 2018 pay package negotiation, suggesting Tesla directors were “perhaps starry-eyed” due to Elon’s “superstar appeal”, and accused them of failing to fully inform shareholders.
She deemed the deal “unfathomable” and ordered its cancellation, marking the largest pay deal in US corporate history.
Bloomberg and Forbes estimated Elon’s net worth to be between $198 billion and $220 billion in November 2023, solidifying his position as the world’s wealthiest individual.
Filing the lawsuit against Elon’s mega payment, shareholder Richard Tornetta argued it constituted an overpayment – despite the fact he held only nine Tesla shares.
In response to the judge’s ruling, Elon initiated a poll on X, garnering over 1.1 million votes, with 87 per cent of respondents supporting the relocation to Texas.
Elon declared when the results came back: “The public vote is unequivocally in favor of Texas!”
The move is in line with Tesla’s decision in 2021 to shift its corporate headquarters from Palo Alto, California, to Austin, Texas.
Elon’s criticism of California’s tax policies and regulations, coupled with clashes during the Covid pandemic, influenced the relocation.
Tesla’s electric car “Gigafactory” in Texas, set for expansion, further solidifies the company’s ties to the state.
Judge McCormick’s ruling is not Elon’s first setback in Delaware.
She oversaw a lawsuit in July 2022 when the dad-of-10 attempted to back out of a $44 billion contract to purchase Twitter
Despite Elon’s objections, the judge upheld the deal, and Elon has gone on to rebrand the firm X.
