Elon Musk said Tesla shareholders will hold a vote “immediately” on whether to change its state of incorporation to Texas — shortly after a Delaware judge shockingly decided to tear up his $56 billion pay package.
The mercurial tech billionaire made the announcement after conducting an informal poll on X about a potential relocation.
An overwhelming 87.1% of the more than 1.1 million users who responded to the poll as of Thursday agreed that Tesla should move to Texas, while just 12.9% disagreed.
“The public vote is unequivocally in favor of Texas!” Musk wrote on X. “Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas.”
Musk didn’t elaborate on the plans.
Tesla didn’t immediately respond to a request for comment.
Tesla’s physical headquarters is already located in Austin, Texas.
Musk moved the company’s home base to the Lone Star State in 2021 from its previous location in Palo Alto, Calif.
On paper, the electric car maker is registered in Delaware — which has long been viewed as business-friendly environment.
In order to proceed with a vote to change the incorporation, Musk would likely need to obtain approval from Tesla’s board of directors.
Judge Kathaleen McCormick of Delaware’s Court of Chancery voided the pay package, which she described as “an unfathomable sum,” after determining that it was excessive and unfair to the company’s stockholders.
The judge called the process by which Tesla’s board approved the package “deeply flawed.”
“Never incorporate your company in the state of Delaware,” an irritated Musk said on X after the court’s ruling surfaced.
The case arose from a lawsuit filed by Tesla shareholder Richard Tornetta, who alleged that the 10-year compensation plan laden with stock-based incentives was excessive.
The plaintiff accused Tesla’s board of allowing Musk to craft the “framework and financial terms, which remained fundamentally unchanged.”
The pay package allowed Musk to earn 12 “tranches” of stock options that were tied to Tesla’s stock performance over the 10-year term.
McCormick was notably the same judge who oversaw the legal battle between Musk and the company formerly known as Twitter, which had sued after he tried to back out of a deal to buy the firm for $44 billion.
Musk later agreed to honor the original terms and eventually changed the company’s name to X as a part of chaotic overhaul.
The court’s ruling would have major implications for Musk’s personal fortune if it holds up from appeal.
If Musk were to lose the stock options — valued at $51.1 billion — his net worth would plummet to $154.3 billion.
With that decline, he would be the world’s third-richest person after years of being the richest individual alive, according to the Bloomberg Billionaires Index.
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