In January 2024, Tesla CEO Elon Musk offered blunt advice to business leaders.
“Never incorporate your company in the state of Delaware,” he wrote on X.
Musk’s acrimony stemmed from a decision by Delaware Chancery Court Chancellor Kathaleen McCormick, who voided his $56 billion compensation package, saying that Tesla had failed to prove the contract was “fair.” The fact that there was no legal precedent for her action and that Tesla’s board, shareholders, and Musk had all approved the payout didn’t matter.
An irritated Musk suggested that entrepreneurs incorporate “in Nevada or Texas” if they want shareholder rights to be respected. In the weeks that followed, Musk took his own counsel, relocating SpaceX’s incorporation to Texas and shifting Neuralink’s
