Elon Musk’s Tesla will ‘immediately’ hold a shareholder vote on changing incorporation to Texas


Tesla CEO Elon Musk said on Thursday that the electric carmaker will hold a vote to change the company’s state of incorporation from Delaware to Texas. The announcement comes a day after he asked his followers on X (formerly Twitter), the social media platform he owns, to vote on whether the EV maker should change its state of incorporation to Texas. The poll ended with 87.1% of the nearly 1.1 million respondents voting in favour of Musk’s proposal.

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Announcing his decision on X, Musk wrote, “The public vote is unequivocally in favor of Texas! Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas.”

This is not the first time Musk has sought the opinion of social media users before making a major decision for one of his companies. Notably, he has used the polling feature to make many major decisions at X since taking over the company in 2022, including the decision to step down as the company’s CEO.

Musk’s announcement comes after the billionaire faced a major setback in the current state of his company’s incorporation, Delaware. Specifically, the decision to move Tesla’s state of incorporation to Texas comes after a Delaware judge recently ruled that Musk had described the $55.8 billion 2018 pay package awarded to Musk by Tesla’s directors as an “unfathomable sum”, noting that the EV maker’s directors may not have critically assessed the need for such a massive package to retain Musk.

Shortly after the ruling, Musk took to X to share his frustration, 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.”

Tesla had previously moved its corporate offices from Palo Alto, California, to Austin, Texas, in 2021 due to issues with California taxes and regulations, as well as clashes with health officials over opening the Fremont facility at the start of the COVID-19 pandemic, Reuters reported.

 

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Published: 01 Feb 2024, 05:40 PM IST



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