Elon Musk Moves SpaceX’ State of Incorporation from Delaware to Texas, Urges Other Companies to Follow Suit
In a bold response to a legal setback in Delaware, SpaceX CEO Elon Musk announced the relocation of the aerospace company’s state of incorporation to Texas. The move comes after a Delaware court invalidated Musk’s unprecedented $56 billion compensation package at Tesla.
“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,” Musk proclaimed on X.
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 relocation of SpaceX’s corporate registration marks a significant response to the recent Delaware court ruling against Musk’s compensation at Tesla, where he serves as CEO.
The compensation package, which was the largest ever awarded to a corporate executive, played a crucial role in Musk’s rise to becoming one of the richest individuals in the world.
Chancellor Kathaleen St. Jude McCormick criticized the process by which Musk’s compensation plan was approved, highlighting Musk’s significant influence over the compensation committee and board members, many of whom have strong personal ties to him.
“The concept of fairness calls for a holistic analysis that takes into consideration two basic issues: process and price,” the judge wrote.
“The process leading to the approval of Musk’s compensation plan was deeply flawed. Musk had extensive ties with the persons tasked with negotiating on Tesla’s behalf.”
FOX News reported:
The ruling stemmed from a lawsuit brought by a shareholder who argued Musk’s close ties with directors who negotiated the bumper package weren’t properly disclosed ahead of a stockholder vote to approve the deal.
The judge also found that the performance targets in the compensation package were easier to meet than the company was acknowledging and that internal projections showed Musk was already on track to qualify for large portions of the package.
The plan gave Musk access to Tesla stock at heavily discounted prices. It was divided into 12 tranches with escalating financial and operational goals – though it required him to hold acquired stock for five years.
Musk slammed the ruling, posting on X that entrepreneurs and founders should “never incorporate your company in the state of Delaware” and posted a poll for the platform’s users about whether Tesla should relocate to Texas – a proposition respondents overwhelmingly endorsed.
“The public vote is unequivocally in favor of Texas!” Musk declared after the vote closed. “Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas.”
As SpaceX initiates its departure from Delaware, the company is also investing heavily in Texas soil. The company has disclosed intentions to erect a $100 million office and a sprawling 1-million-square-foot industrial factory, with construction slated to begin shortly.
The Dallas Morning News recently reported that Musk had proposed a rebranding of parts of Brownsville and the nearby Boca Chica to “Starbase Office,” a nod to the substantial investment his ventures have poured into the area.
Musk continues his foray into education with plans to establish a new university in Austin, as per recent tax filings for his latest charitable endeavor, The Foundation.
According to these documents, the institution is poised to begin as a STEM-focused primary and secondary school, backed by an approximate $100 million donation from Musk.
The long-term vision for this educational project is ambitious. Following the establishment of the primary and secondary school, plans are to expand into a full-fledged university. This institution aims to offer “education at the highest levels,” as stated in the application for tax-exempt status submitted to the Internal Revenue Service. This application, filed in October 2022, has already received approval in March.
According to The Time, it plans to employ “experienced faculty” and offer a blend of traditional curriculum and practical learning experiences. These include simulations, case studies, fabrication and design projects, and laboratory work. For accreditation, the university will approach the Southern Association of Colleges and Schools Commission on Colleges.
Elon Musk’s vision for this educational venture was hinted at in 2021, when he expressed his thoughts on Twitter: “Am thinking of starting new university: Texas Institute of Technology & Science.”
He mentioned tuition payment flexibility, “Tuition is in Dogecoin & u get a discount if u have a dog.”
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