Tesla Inc TSLA CEO Elon Musk on Thursday urged other companies to shift their state of incorporation outside Delaware on the heels of the EV giant.
The Urgent Call: Elon Musk, known for his bold statements, took to social media to urge companies to consider moving their state of incorporation out of Delaware. He expressed a sense of urgency, declaring, “Change your state of incorporation out of Delaware before they lock the doors.” Musk revealed that Delaware was currently preventing telecom businessman John Malone from moving out of the state, signaling the potential hurdles faced by companies aiming to relocate.
While more companies are considering relocating from Delaware to Nevada, Tesla is eyeing a move to Texas, where it is physically headquartered, Musk disclosed.
Significance of the Shift: Musk announced that Tesla will conduct a shareholder vote on transferring the company’s state of incorporation from Delaware to Texas. He initiated a poll on Twitter, which indicated a preference for incorporating the company in the state where its headquarters are located. The CEO’s move comes after a Delaware judge ruled against his $56 billion pay package from 2018, describing it as “an unfathomable sum” and revoking it.
Following the court ruling, Musk vehemently advised against incorporating companies in Delaware, suggesting either Nevada or Texas as better alternatives catering to shareholders’ interests. This plea stems from Musk’s decision to relocate Tesla’s headquarters from California to Texas in 2021, driven by disagreements with California’s regulations and taxation laws.
Photo by Frederic Legrand – COMEO on Shutterstock
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