Following a $56 billion pay spat with the state of Delaware, businessman Elon Musk has officially moved his rocket company SpaceX’s incorporation from Delaware to Texas.
He also intends to move his electric vehicle company Tesla Inc (NASDAQ:TSLA, ETR:TL0) to Texas, having recently done the same for his computer-brain interface company Neuralink.
In typical Musk fashion, he took to X, formerly Twitter, the social media site he bought for more than $50 billion in 2022, to celebrate the move.
"SpaceX has moved its state of incorporation from Delaware to Texas!” he Tweeted to his loyal followers.
“If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible," he continued.
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. pic.twitter.com/B7FLByL2dY
— Elon Musk (@elonmusk) February 15, 2024
The exodus began when a Delaware judge invalidated his US$56 billion pay package earlier this year.
Siding with disgruntled Tesla shareholder Richard Tornetta, who sought to strike the pay package, Delaware Judge Kathaleen McCormick called the exorbitant sum “unfathomable”.
She said: “The incredible size of the biggest compensation plan ever - an unfathomable sum - seems to have been calibrated to help Musk achieve what he believed would make ‘a good future for humanity’.”
Directors at Tesla argued the scale of the remuneration had kept Musk focused on the business and had delivered huge success for the company.
“Never incorporate your company in the state of Delaware,” he instructed his followers. “I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters.”
Despite Musk’s tantrum, Delaware is broadly considered one of the most business-friendly states in the US and is often treated as a low-tax offshore jurisdiction for global entities.
Over 1.9 million legal entities are incorporated in Delaware, including nearly 70% of Fortune 500 businesses.