Sharjah24 - Reuters: Tesla TSLA.O CEO Elon Musk said on Thursday the company will hold a shareholder vote to transfer its state of incorporation to Texas from Delaware, days after a judge invalidated his $56 billion pay package at the electric vehicle (EV) maker.
On Tuesday, Delaware judge Kathaleen McCormick called the 2018 share-based pay package, the largest in corporate America, "an unfathomable sum" that was unfair to shareholders and found it was negotiated by directors who appeared beholden to Musk.
"Never incorporate your company in the state of Delaware," Musk posted on social media X shortly after the ruling.
Musk's idea, should he actually go through with the vote, is not without risk. Legal experts said Musk would almost certainly be sued by investors if he tried to move the state of incorporation to Texas, particularly if it was seen as a move to secure his pay package rather than obtain some benefit for Tesla.
"Elon Musk's plan to change Tesla's state of incorporation from Delaware to Texas is typical behaviour for the entrepreneur who always looks for an alternative if he can't get what he wants," said Dan Coatsworth, investment analyst at AJ Bell.
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