Elon Musk relocates SpaceX to Texas following Tesla salary package upheaval in Delaware

Elon Musk relocates SpaceX to Texas following Tesla salary package upheaval in Delaware

Elon Musk has made a significant business maneuver, relocating SpaceX’s state of incorporation from Delaware to Texas. This decision follows a recent court ruling in Delaware that invalidated Musk’s substantial compensation package at Tesla, another venture of the renowned entrepreneur.

In a communication via X, formerly known as Twitter, Musk announced the relocation, urging other companies still registered in Delaware to consider moving elsewhere promptly. This shift by SpaceX comes shortly after a Delaware judge nullified Musk’s staggering $56 billion compensation package at Tesla, where he holds the position of CEO.

The legal dispute arose from a lawsuit filed by a shareholder who argued that Tesla had not adequately disclosed Musk’s close relationships with the directors involved in negotiating the lucrative compensation package. The judge’s ruling highlighted concerns about the transparency of the process and revealed that the performance targets outlined in the package were potentially easier to achieve than initially portrayed. Additionally, internal projections indicated that Musk was already on a trajectory to meet significant portions of the package’s requirements.

The compensation plan granted Musk access to Tesla stock at reduced rates, structured into 12 tranches with increasing financial and operational milestones. However, it also imposed a five-year holding period on acquired stock. Musk publicly criticized the court’s decision, advising entrepreneurs and founders to avoid incorporating their companies in Delaware.

Moreover, he initiated a poll on X, seeking user opinions on whether Tesla should relocate to Texas—a proposal that received overwhelming support from respondents. This move by SpaceX underscores the broader implications of legal battles on corporate decisions and demonstrates Musk’s willingness to adapt strategically in response to regulatory challenges.