Musk vows to shift Tesla to Texas after judge blocks his $56bn pay package

Elon Musk’s electric car giant is already headquartered in the Lone Star State – SUZANNE CORDEIRO/AFP via Getty Images

Elon Musk has pledged to hold a shareholder vote on moving Tesla’s registration from Delaware to Texas after his $56bn (£44bn) pay package in 2018 was annulled by a state judge.

The billionaire said the electric car company would “move immediately” to hold a vote on shifting its incorporation to Texas after holding a public poll on his social media platform X, formerly known as Twitter.

His announcement came after a judge in Delaware, where the company is currently registered, ruled that he is not entitled to a landmark compensation package awarded by Tesla’s board of directors.

He asked on X: “Should Tesla change its state of incorporation to Texas, home of its physical headquarters?”

The result showed 87.1pc of voters thought Tesla should change states.

Mr Musk, who has previously polled people on X before making decisions, posted on the social network to express his displeasure at the judgement on Tuesday.

“Never incorporate your company in the state of Delaware,” he wrote in one post.

He later added: “I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters.”

Mr Musk is at risk of losing his position as world’s richest man to Amazon’s Jeff Bezos as a result of the Delaware court ruling, which effectively stripped him of almost a quarter of his wealth after describing the compensation agreement as “unfathomable”.

If the decision is upheld, Mr Musk will be overtaken in the rankings of the world’s richest people by both Bernard Arnault, the owner of French luxury giant LVMH, and Mr Bezos.

Mr Musk is currently worth nearly $205bn, although this includes the disputed $56bn share package, which was agreed in 2018.

The ruling came five years after shareholders filed a lawsuit accusing Mr Musk and Tesla directors of breaching their duties and arguing that the pay package was a product of sham negotiations with directors who were not independent of him.

The defence countered that the pay plan was fairly negotiated by a compensation committee whose members were independent and had lofty performance milestones.

The Tesla chief executive moved the electric vehicle maker’s headquarters to Austin, Texas, from California in 2021.

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