Tesla Incorporation Question Goes Viral as Musk Pushes for Texas Move Following Delaware Court Decision

After a Delaware court invalidated his $56 billion compensation package, Elon Musk has made his position crystal clear: the state’s legal framework no longer works for Tesla. The billionaire quickly pivoted to asking X users whether Tesla should relocate its corporate registration from Delaware to Texas, where the electric vehicle giant already operates its main headquarters.

The Poll That Sparked a Debate

Musk launched an X poll Wednesday evening with a stark message to followers: should Tesla shift incorporation status to Texas? The response was overwhelming. By publication time, nearly 426,000 votes had been tallied, with an impressive 89.7% supporting the Texas relocation proposal. This isn’t just casual online sentiment—it reflects genuine shareholder frustration with Delaware’s judicial approach to executive compensation.

Earlier, Musk had publicly advised entrepreneurs: “Never incorporate your company in Delaware,” recommending Nevada or Texas as superior alternatives that he argues give shareholders greater influence over corporate decisions. Tesla currently maintains operations in both Texas (headquarters and manufacturing) and Nevada (Gigafactory location).

What Triggered the Corporate Governance Crisis

The Delaware court’s decision centered on Musk’s 2018 compensation structure—a performance-based equity package potentially worth $55.8 billion. The plan granted Musk 12 tranches of stock options contingent on Tesla hitting specific milestones. Remarkably, he’s already satisfied all conditions to unlock these tranches.

Shareholder Richard J Tornetta challenged the arrangement, alleging Tesla’s board breached fiduciary responsibilities. The Delaware judge sided with Tornetta, delivering a scathing assessment: the board became “starry-eyed by Musk’s superstar appeal” and never genuinely questioned whether such astronomical compensation was necessary to retain him and accomplish Tesla’s objectives. The court labeled the sum “unfathomable.”

Musk responded sharply on X, emphasizing that Tesla shareholders had initially approved the package by majority vote (excluding himself and brother Kimbal), and calling the ruling “insulting” to investor intelligence.

Musk’s Track Record with X Polls

This isn’t Musk’s first major decision shaped by platform voting. In 2023, he stepped down as Twitter CEO following poll results favoring his departure. He’s previously crowdsourced opinions on edit features, political reinstateements, and personal stock sales. However, legal scholars note that while polls may reflect user sentiment, corporate restructuring carries serious tax and regulatory implications that typically require deeper analysis than Twitter voting provides.

The Delaware Supreme Court can still hear an appeal of Tuesday’s judgment, meaning this compensation battle may extend considerably longer.