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Tesla asks shareholders reinstate Musk’s pay, move to Texas

Tesla has reinstated CEO Elon Musk’s pay package and moved the company from Delaware to Texas, months after a judge rejected the CEO’s $56 billion compensation package. We are asking shareholders to move the company to

Tesla shareholders voted to approve Musk’s pay proposal in 2018, but a Delaware judge filed a lawsuit in January challenging the pay proposal, which would be the highest ever for a U.S. executive. The government sided with investors and invalidated the proposal.

Elon Musk speaks in Shanghai

Tesla CEO Elon Musk speaks at the opening ceremony of Tesla’s Made in China Model Y program in Shanghai, China on January 7, 2020. (Reuters/Allie Song/File Photo/Reuters Photo)

The compensation does not include salary or cash bonuses, but will be based on Tesla’s market value increasing by up to $650 billion over the next 10 years. Tesla is currently valued at about $500 billion.

Musk has previously vowed that this vote will come.

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Delaware Judge Katherine McCormick rejected Musk’s stock-based compensation package, saying the “incalculable amounts” were unfair to shareholders and negotiated by directors who appeared to be beholden to Musk. After the court issued its ruling, Tesla’s CEO wrote to Mr. X: “Never incorporate your company.” Delaware. ”

Close-up of Tesla Motors logo on a building

Tesla Motors logo on July 23, 2018 in Pleasanton, California. ((Photo Credit: Smith Collection/Gado/Getty Images) / Getty Images)

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In a follow-up post to X, Musk surveyed the platform’s users and asked, “Should Tesla change its legal status to Texas, where its physical headquarters are located?” Over 1.1 million users voted, with 87.1% voting yes and 12.9% voting no.

“The people’s vote is clearly in Texas’ favor!” Musk said. “Tesla will immediately hold a shareholder vote to move its state of incorporation to Texas.”

Elon Musk hosts Argentine President Javier Millay at Tesla headquarters

In a letter included in an SEC filing posted Wednesday, Tesla board chairman Robin Denholm said, “We disagree with the Delaware court’s decision and do not agree with what the Delaware court said. “We do not believe that this is how corporate law should or actually works.” ”

Tesla’s headquarters are already in Austin, Texas, after the company relocated from California at the end of 2021. Therefore, Denholm argued, it makes sense to incorporate in the Lone Star State as well.

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“2024 is the year Tesla moves its headquarters to Texas,” she wrote to shareholders. “We are seeking a vote to approve Tesla’s move from its current state of incorporation, Delaware, to a new legal domicile in Texas. We are working hard on it.”

FOX Business’ Chris Pandolfo and Reuters contributed to this report.

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