Following the defeat of his $51 billion pay package at Tesla, CEO Elon Musk said he would seek shareholder approval to move the company’s registration from Delaware to Texas.
Mr. Musk announced his plan on another firm he owns, X, by asking his followers if the company should stay in Delaware, where it’s incorporated, or move to Texas.
“Should Tesla change its state of incorporation to Texas, home of its physical headquarters?” he asked his millions of followers.
About 87% of respondents agreed that Tesla should move out of Delaware, with over 1 million votes. After the results came in, Mr. Musk said he would immediately look for shareholders’ OK to incorporate the electric car company in the Lone Star State.
While Mr. Musk has not issued an official statement on Delaware Chancery Court Judge Kathaleen McCormick’s ruling on his pay package, the decision to move away from the state offers some insight into his feelings about the decision. Before posting the poll, he wrote, “Never incorporate your company in the state of Delaware. … I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters.”
Whether shareholders will approve of Mr. Musk’s idea is another story. Most Fortune 500 companies are incorporated in Delaware, where lucrative tax incentives make it a haven for businesses of all sizes. And it was Tesla shareholders who brought the lawsuit over Mr. Musk’s pay package in the first place, so approval of the reincorporation might not be universal.
He sure has Greg Abbott’s backing. The Texas governor responded to the poll by writing on X, “Elon, it’s over. The election desk is declaring a landslide victory for Texas.”