Elon Musk said Thursday he will move to allow Tesla Inc. shareholders vote on whether the EV company should switch its incorporation to Texas from Delaware, after a judge in that state voided his $56 billion pay package in a ruling on Tuesday.
Musk made the announcement on X, the former Twitter, which he acquired in October of 2022 for $44 billion. Musk had already posted a poll on whether to reincorporate in Nevada or Texas, where the company is now headquartered, immediately after the ruling.
Earlier Delaware Chancery Court Chancellor Kathaleen McCormick struck down Musk’s pay package, the biggest ever awarded to an executive in the U.S., siding with a shareholder plaintiff and calling the process to arrive at that eye-watering number “deeply flawed.”
“Musk had extensive ties with the persons tasked with negotiating on Tesla’s behalf” and the package’s working group included people “beholden to Musk,” she wrote in a 200-page ruling.
The judge also called the package, granted some five years ago and, like previous packages, contingent upon Tesla hitting several milestones, “historically unprecedented.”
Tuesday’s ruling means that the company will have to draft a new compensation package for Musk.
See also: Nullification of Elon Musk’s $56 billion pay package could be a wake-up call for corporate boards
Tesla, which disbanded its media relations team in 2020, did not respond to a request for comment, but Musk nonetheless took to X to comment.
Tesla’s stock
TSLA,
was up 1.3% premarket and has gained 3% in the last 12 months, while the S&P 500
SPX
has gained 17.6%.
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