After losing a case in Delaware that said the bonuses Elon Musk was making at Tesla were unfair to its shareholders, Musk is slowly moving all his businesses to Texas.
Big Changes
After buying Twitter and changing its name to X last year, Elon Musk has made some serious changes to one of the world’s largest and most impactful social media platforms.
Now, Musk has unveiled another big change for the company by moving the incorporation to Texas.
Headed for Texas
Moving X isn’t the only big business move Musk is planning since he also announced that he wants to move Tesla to Texas as well.
However, Musk can’t move Tesla as easily since he must now wait for shareholder approval.
A Matter of Time
However, Tesla already moved its corporate headquarters to Austin, Texas, in 2021, so it is most likely just a matter of time until he gets shareholder approval to move the Tesla incorporation to Texas as well.
SpaceX in Texas
SpaceX is also expanding its presence in Texas by opening a new Starlink manufacturing facility in Bastrop, which is near the Tesla HQ and Gigafactory in Austin, Texas.
The Bastrop facility is set to play a key role in the development and production of the next generation of Starlink satellites.
Company Synergy
This move highlights the strategic alignment of Musk’s companies within the state, offering significant employment opportunities and enhancing the synergy between Tesla, The Boring Company, and SpaceX.
Leaving Delaware
Musk made a statement saying, “SpaceX has moved its state of incorporation from Delaware to Texas! If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible.”
An Unfavorable Ruling
The announcement for Musk to start relocating his businesses to Texas comes after a Delaware court’s ruling against his $56 billion Tesla compensation package, deemed excessive by the judge.
An Unhappy Shareholder
The lawsuit that led to the judicial review of Musk’s compensation at Tesla was initiated by shareholder Richard Tornetta, challenging the negotiation process and alleging a lack of board independence.
The Defense
In Musk’s defence, he tried to claim that the pay package was put into place to incentivise Musk to focus on the company and its success as it continued to increase its Model 3 production.
Inappropriate Compensation
A Delaware judge found that the process by which Musk’s Tesla compensation was determined was inappropriate, leading to the cancellation of the package.
Musk would not receive any compensation unless certain goals were met, and even then, it would only give him stock options.
Funding for Mars
This compensation package was a significant part of Musk’s wealth that was intended to support his plans for interplanetary travel development.
Since Musk has made interplanetary travel a major focus, it is then no surprise he would want to move his businesses to a more profitable state.
Following the Polls
Following the court ruling, Musk then conducted a poll on X (formerly Twitter) asking where he should move his company.
After posting the poll, it received overwhelming support for relocating Tesla’s incorporation to Texas.
In Favor of Texas
In response to the poll, 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.”
Neuralink Following Closely Behind
Neuralink, Musk’s brain-chip implant company, also changed its location of incorporation from Delaware to Nevada, suggesting a broader strategy of reevaluating corporate domiciles across Musk’s businesses.
The post Elon Musk Initiates Texas Move: Twitter’s X and Tesla Head to Lone Star State first appeared on Swift Feed.
Featured Image Credit: Shutterstock / Frederic Legrand – COMEO.