Musk tries to transfer Tesla headquarters after bonus blockage – 02/01/2024 – Tech

Tesla will hold a shareholder vote to decide whether to transfer the company’s registration in the United States from the state of Delaware to Texas. The measure was announced by Elon Musk, the automaker’s executive president, this Thursday (1st), two days after the court blocked the US$56 billion salary bonus that would be paid to him.

On Tuesday, Judge Kathaleen McCormick, from Delaware, vetoed the payment to the billionaire and stated that the amount was “an inexplicable sum” and that it was unfair to shareholders, being negotiated by directors who appeared to be indebted to the billionaire.

In reaction, Musk criticized the state of Delaware. “Never incorporate your company in the State of Delaware,” he posted on X, formerly Twitter, which is owned by the billionaire. He also started a poll asking whether Tesla should now be incorporated in Texas. More than 87% of the more than 1.1 million votes cast were in favor of the change.

“The public vote is unequivocally in favor of Texas! Tesla will immediately hold a shareholder vote to transfer the state of incorporation to Texas,” Musk said on X.

Tesla’s owner moved the automaker’s corporate headquarters from Palo Alto, California, to Austin, Texas, in 2021 after criticizing California’s regulations and taxes and clashing with health authorities early in the year. pandemic. However, the record was kept in Delaware.

One of Tesla’s factories is in Texas, where the company is also planning a more than $750 million expansion. The automaker is also building a lithium refinery in the state, with the aim of producing enough for around 1 million electric vehicles by 2025.

Musk’s other companies, such as SpaceX and The Boring Company, also have operations in Texas.

Business in Delaware

More than 65% of Fortune 500 companies and more than half of all publicly traded U.S. companies are incorporated in Delaware, attracted by the state’s business-friendly legal structure and tax policies, according to Harvard Business Services.

The payment decision is not the first time that Musk has suffered a setback in the state.

McCormick was the same judge who oversaw Twitter’s lawsuit against Musk in July 2022 after he tried to back out of a contract to buy the social media platform for $44 billion. The judge rejected delaying tactics and Musk was forced to buy the company.

“I recommend incorporating in Nevada or Texas if you prefer the shareholders to decide the issues,” he said in another post on X following McCormick’s decision on his salary package.