Tesla CEO Elon Musk said Thursday that company shareholders will vote on whether to move its registration to Texas after a Delaware judge tossed out a multibillion-dollar bonus package for Musk on Tuesday.
Delaware Chancery Court Judge Kathaleen McCormick ruled Tuesday that Musk cannot keep a record-breaking compensation agreement worth up to $55.8 billion because it was determined unfairly and Musk controlled the board that authorized the package. A group of shareholders challenged the bonus plan in 2018, just after it was announced.
The ruling is a massive financial hit for Musk, with financial analysts projecting it could strip him of his title of richest man in the world. Musk lost the title to French luxury goods magnate Bernard Arnault this week, according to Forbes.
Musk railed against Delaware corporate regulation in social media posts following the ruling, including republishing a Wall Street Journal op-ed critical of the state and publicly regretting the choice to register Tesla there.
“Never incorporate your company in the state of Delaware,” he said Tuesday.
The tech billionaire held a poll of his X followers late Tuesday over whether Tesla should change its corporate registration to Texas, where the company’s headquarters is located. About 87 percent of votes were for yes.
“The public vote is unequivocally in favor of Texas!” Musk announced Thursday. “Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas.”
The First State is also where Musk failed to back out of a $43 billion deal to purchase Twitter, now X, in 2022. He attempted to challenge the purchase in court but was forced to go through with the agreement.
The company’s headquarters relocated in 2021 from California to Austin, Texas, though the company’s engineering branch returned to California last year. Musk said the Texas move was sparked by rising housing costs in the Bay Area and the difficulty of expansion.
Texas Gov. Greg Abbott (R) encouraged the move on Tuesday.
“Elon, it’s over,” he said on X, in response to the poll. “The election desk is declaring a landslide victory for Texas.”