By CNBC
Elon Musk said late Wednesday that Tesla will hold a shareholder vote on whether to transfer the electric car maker’s state of incorporation to Texas.
The billionaire asked his followers via a straw poll on X, formerly Twitter, whether Tesla should change the state where it is incorporated to Texas, where its physical headquarters are. More than 80% of those who voted said yes. Polls on the social media platform are informal and not comparable to professional public opinion research.
After the poll, Musk said, Tesla “will move immediately to hold a shareholder vote to transfer state of incorporation to Texas.” Musk will likely have to seek approval from the Tesla board to enact such a move. Tesla is currently incorporated in Delaware.
Musk’s X post comes after a judge in Delaware voided the $56 billion pay package for the Tesla CEO granted in 2018, the largest compensation plan in public corporate history. Chancery Court Chancellor Kathaleen McCormick ruled that the company’s board of directors failed to prove “that the compensation plan was fair” or show much evidence that they had even negotiated with Musk.
“CEOs and Executives must take note of this landmark Delaware decision. Was the compensation approved by independent directors, in an arm’s-length transaction, and was it appropriately documented?” -Shruti Gurudanti, Rose Law Group partner and director of corporate transactions
