Abbott Applauds Musk’s Plan To Change Tesla’s State Of Incorporation To Texas
On Thursday, Texas Gov. Greg Abbott (R) urged Tesla CEO Elon Musk to follow through on his plans to move the company’s state of incorporation from Delaware to Texas, which came after a shocking ruling from a Delaware judge that invalidated Musk’s $56 million compensation package.
Delaware Chancery Court Judge Kathaleen St. Jude McCormick ruled on Tuesday that Tesla’s board of directors failed to justify Musk’s compensation plan, dismissing the fact that it was tied to his performance as CEO. Her decision to meddle in Tesla’s affairs in direct contradiction to the business judgment rule prompted outrage on social media, including from entrepreneur and former Republican presidential candidate Vivek Ramaswamy.
In response to the ruling, Musk warned other businesses to avoid Delaware if they are seeking a state to incorporate with — which is shocking considering the fact that Delaware has long been the go-to state for incorporation, with the best incentives for businesses in the U.S., as Delaware does not have a corporate income tax, sales tax, investment income taxes, inheritance taxes or personal property taxes.
“Never incorporate your company in the state of Delaware,” Musk warned in light of the ruling and the state’s recent push of far-left policies that disincentivize profit in favor of environmental, social and governance (ESG) principles.
In a follow-up post, Musk published a poll for his followers, asking: “Should Tesla change its state of incorporation to Texas, home of its physical headquarters?”
The final result of the poll was 81.7% of the more than 1.1 million respondents voted “yes,” while 12.9% voted “no.”
“The public vote is unequivocally in favor of Texas!” Musk declared in another post on Thursday. “Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas.”
Abbott then responded to Musk’s post, writing: “@Tesla in Texas. It just makes sense.”
The move makes sense considering the fact that Tesla already moved its headquarters from Palo Alto, California, to Austin, Texas, in 2021 for a variety of reasons, including the fact that it was tough for workers to afford the cost of living in Silicon Valley. Musk also reportedly made the decision in response to being attacked by California Assemblywoman Lorena Gonzalez (D). The Democrat politician made an unprompted post on social media declaring “F—k Elon Musk,” to which the Tesla CEO responded, “message received.”
Musk later shared a post titled “Tesla Moved its HQ to Texas Following Explicit Offer from California Assemblywoman,” adding the message, “Exactly” — which suggested that he agreed that Gonzalez’s post played a role in the move.
It is clear that Musk has become a popular target of the far-left, including the Delaware judge and the California assemblywoman — but many have also pointed out that the judge’s decision could be part of the Biden administration’s efforts to target Musk through legal warfare, especially as Delaware is President Joe Biden’s home state, where he still holds a lot of influence. Musk is currently facing investigations and lawsuits from numerous Biden administration agencies, which all began soon after he purchased Twitter, now known as X.
