From Nasdaq:

The Delaware judge recently voided a 2018 compensation plan for Tesla Inc (TSLA) CEO Elon Musk, leading to discussions about relocating the company’s incorporation from Delaware to Texas. Musk announced that Tesla’s board of directors will vote on the potential re-incorporation, prompted by a Twitter poll and Tesla analyst Daniel Ives’ update on the compensation plan.

Ives expressed surprise at the judge’s ruling, considering it created a “tornado situation” for Tesla’s Board. The Street is watching Tesla’s board’s reaction, uncertain whether they will appeal or create a new compensation plan. Ives suggested that relocating to Texas could lead to creating a new compensation plan that aligns with the judge’s ruling and secures Musk’s requested 25% voting rights.

Tesla’s move to Texas would pave the way for Musk’s stake in Tesla to meet the 25% threshold he desires, according to Ives. The analyst had previously recommended 10 ideas to boost Tesla stock, including creating a new compensation plan to lock Musk in as CEO through 2030. The analyst also mentioned that following Tesla’s move, other companies may relocate incorporation from Delaware.

Tesla’s decision to relocate its company headquarters from California to Texas may have political implications. As a result, the latest discussions prompted questions about the company’s incorporation. Meanwhile, Tesla shares have faced significant volatility, dropping 26% year-to-date in 2024 and only up 1% over the last 52 weeks.



Read more: Analyst Says Tesla Could Incorporate In Texas After Judge’s Ruling On Musk Compensation: ‘They Started It, We Will Finish It’