Judge Kathaleen McCormick ruled that the pay package negotiated by Elon Musk for Tesla was not properly disclosed to shareholders. The decision came after a minor shareholder filed a lawsuit against Musk and Tesla, prompting an appeal from both parties in Delaware, where many large businesses and corporations are incorporated due to favorable tax laws and predictable court outcomes. However, Musk suggested that Tesla and its subsidiaries may be relocating to Texas, where SpaceX recently made a similar move. Musk announced via Twitter that SpaceX had shifted its state of incorporation from Delaware to Texas and recommended other companies follow suit.
Furthermore, Neuralink, another company owned by Musk, also moved its incorporation from Delaware to Nevada, hinting at a potential trend. Amidst these developments, there is no indication that Tesla has made any concrete plans to relocate its incorporation to Delaware, further complicated by the ongoing legal battle over the pay package. The resolution of the case could potentially influence the decision to move to Texas, with the appeal process expected to take up to six months to reach a conclusion.