Telsa shareholders to vote on reincorporating in Texas

Elon Musk was dealt a serious monetary blow on Tuesday when a Delaware state courtroom decide voided his $56 billion executive compensation package from Tesla.

The ramifications of the historic ruling began to emerge Thursday, when Musk said Tesla shareholders will vote on whether or not to vary the state the place the corporate is integrated from Delaware to Texas.

Musk made the announcement early Thursday morning on the social media platform he owns X, previously referred to as Twitter. Tesla beforehand moved its headquarters from California to Texas in 2021. Musk cited rising housing costs in the Bay Area as the rationale for that transfer.

“Tesla will transfer instantly to carry a shareholder vote to switch state of incorporation to Texas,” Musk wrote following an earlier ballot on the positioning the place he requested X customers the identical query.

“The general public vote is unequivocally in favor of Texas,” musk wrote after 87% of 1.1 million voters on his X publish permitted of the transfer.

The information got here simply days after Delaware Chancery Court docket Choose Kathaleen McCormick dominated that the “course of resulting in the approval of Musk’s compensation plan was deeply flawed” and was unfair to shareholders. The 2018 bundle, the biggest in historical past, awarded Musk’s 20.3 million inventory choices over 12 tranches and was valued at as much as $55.8 billion on the time. It helped make him the richest individual on the planet.

McCormick cited Musk’s robust affect over Tesla’s board of administrators as a main purpose for overturning the plan—the primary time in historical past for the sometimes business-friendly state of Delaware. She identified Musk’s decades-long private and monetary relationships with a number of board members together with Ira Ehrenpreis, the compensation committee chair.

“Given the gathering of individuals tasked with negotiating on Tesla’s behalf, it’s unsurprising that there was no significant negotiation over any of the phrases of the plan,” McCormick wrote.