Tesla and SpaceX CEO Elon Musk has announced that Tesla will move immediately to hold a shareholder vote to change its legal home from the US state of Delaware to Texas.
This comes after a judge in Delaware ruled that Musk’s $56 billion pay package is unfair and the Tesla board will need to come up with a new pay proposal.
After the ruling, the tech billionaire posted on social media: “Never incorporate your company in the state of Delaware.”
He later launched a poll on his social media platform X, asking if Tesla should change its state of incorporation to Texas.
“Should Tesla change its state of incorporation to Texas, home of its physical headquarters?” Musk wrote on Wednesday.
The poll received over 1.1 million votes, with more than 87 per cent supporting the reform.
“The public vote is unequivocally in favour of Texas! Tesla will move immediately to hold a shareholder vote to transfer the state of incorporation to Texas,” Musk announced.
The decision, issued in the Delaware Court of Chancery by Judge Kathaleen McCormick, meant that Musk can’t keep the 2018 compensation package.
In her ruling, McCormick wrote that Tesla “bore the burden of proving that the compensation plan was fair, and they failed to meet their burden”.
The compensation plan approved by shareholders in 2018 consisted of 20.3 million stock option awards broken up into 12 tranches of 1.69 million shares.
Under the agreement, the options vested in 12 increments if Tesla hit specific milestones on market cap, revenue and adjusted earnings (excluding certain one-time charges such as stock compensation).