Elon Musk has said Tesla will look to move the company’s legal base to Texas – just days after a Delaware judge denied him the biggest corporate payday in history.
The billionaire said the electric car maker will hold a shareholder vote to transfer the group’s state of incorporation.
The shift comes as Musk, 52, the company’s chief executive, reels from the court decision on Tuesday that voided his £44billion pay package.
The judge ruled that his ‘unfathomable’ compensation, which was tied to performance targets and set in 2018, was inappropriately set by the firm’s board.
It is unclear how the ruling will be implemented. But without the pay package, Musk’s fortune would take a hit – causing him to drop down the list of the world’s richest people.
Pay row: : Tesla boss Elon Musk said the electric car maker will hold a shareholder vote to transfer the group’s state of incorporation
He is currently said to be worth around £160billion.
Bernard Arnault, the boss of French luxury-goods giant LVMH, is the second-richest person in the world, with £145billion.
Immediately after the court judgment, Musk wrote on X: ‘Never incorporate your company in the state of Delaware.
‘I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters.’
He then posted a poll on Wednesday evening on his social media account asking whether he should change Tesla’s base.
With more than a million votes cast, the survey saw 87 per cent in favour of the shift.
Following the result, Musk wrote: ‘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.’
The tycoon, who owns about 13 per cent of Tesla, already has ties with the state after shifting the corporate headquarters from California to Texas in 2021.
But Brian Quinn, a professor at Boston College law school, said that any move to Texas would need to be instigated by the board.
He added: ‘So, if he hasn’t, he should drop them a line because it’s supposed to be a board call, not the result of a poll on X.’
It is thought that switching the legal base to Texas will not change the underlying law behind the Delaware ruling.
The latest setback adds to the issues which are plaguing Musk. Last month, he warned that car production at Tesla will slow this year as the firm posted a sharp drop in profits.
It comes as the company faces mounting pressure from Chinese rivals such as BYD which are looking to dominate the electric car market.
Musk is also juggling a bumpy performance at X, which he bought for £34billion in 2022.
The social media firm has come under major scrutiny for its content moderation and has faced ongoing action from major advertisers following reports of anti-Semitic posts on the site.
In December, Musk told advertisers, who were traditionally the lifeblood of the company’s revenues, that they should ‘go f***’ themselves.
