Musk Confirms SpaceX Incorporation Moved From Delaware To Texas

Tom Jowitt,
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After Delaware judge vetoed Elon Musk’s $56 billion pay package, billionaire moves SpaceX incorporation to Texas

Elon Musk has confirmed that SpaceX’s state of incorporation in Delaware has been moved to Texas.

Musk confirmed the move in a post on X (formerly Twitter), and recommended that other companies still incorporated in Delaware, move “to another state as soon as possible.”

This all stems from a Delaware court ruling two weeks ago, that had voided Elon Musk’s $56 billion pay package.

The Delaware judge had ruled that Tesla’s board of directors had failed to prove “that the compensation plan was fair” or show much evidence that they had even negotiated with him.

Image credit: Elon Musk
Image credit: Elon Musk

Pay row

Immediately after the Delaware judge had vetoed Musk’s Tesla compensation package, which was the biggest to date in US corporate history, the billionaire tweeted “Never incorporate your company in the state of Delaware.”

He then tweeted a poll that asked the question: “Should Tesla change its state of incorporation to Texas, home of its physical headquarters?”

After 87 percent respondents voted ‘yes’ for Tesla’s change of incorporation, Musk announced that he wouldimmediately hold a shareholder vote to move Tesla’s state of incorporation to Texas.

Last week Musk’s brain-chip implant company, Neuralink changed its state of incorporation from Delaware to Nevada.

Now this week SpaceX’s state of incorporation has been moved from Delaware to Texas, after Musk confirmed it in a tweet.

Why Delaware?

At the moment it is reported that over 60 percent of all Fortune 500 companies in the US are currently incorporated in the state of Delaware.

But why this particular US state?

Essentially it is because Delaware is known to be a corporate friendly state, with a respected and established corporate court system (although maybe not respected by Elon Musk anymore).

Delaware is also known to have business-friendly tax, legal and regulation policies.

For example corporations registered in Delaware that do not do business in the state, do not pay corporate income tax.

Delaware also does not have a sales tax, investment income taxes, inheritance taxes or personal property taxes.

Musk history

Elon Musk has previous form moving to different US states, when he doesn’t get his way, as evidenced by California.

In 2020 Musk had threatened to move both the Tesla factory and its headquarters out of California, to Texas or Nevada, after he clashed with officials in Alameda County over the re-opening of Tesla’s Fremont factory during the first Californian Covid-19 lockdown.

His threat to pull the factory of the world’s most valuable carmaker out of California was not realised, after Musk was allowed to re-open the Fremont factory early.

But in October 2021, Elon Musk followed through on his warning, and moved Tesla’s corporate headquarters to Texas.

In December 2020, Elon Musk, who had lived in Los Angeles for 20 years, personally relocated to Texas when he announced he had left California, after had sold his Bel Air homes.

In December 2021 Musk said on a podcast that California was “doing everything it can to encourage people to leave,” and he joked that u-haul was doing great business in the US state.

He also slammed California for ‘overtaxation’ and ‘overegulation’ and ‘overlitigation’.