Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk On Wednesday, he renewed his attacks on Delaware’s corporate regime Coinbase Global Inc. (NASDAQ:COIN) said it will follow Tesla SpaceX by leaving the state as their legal home and resettling in Texas.
Elon Musk escalates warnings to companies
Reinstatement of Coinbase’s chief legal officer by Paul Grewal update on X, Musk wrote: “Delaware continues to bleed companies dry.” A short time later, he escalated the warning with another post, saying, “Delaware must make major changes immediately or continue to lose its greatest asset, which is the founding state of most corporations in America.”
Grewal wrote in a Wall Street Journal op-ed on Wednesday: said Texas has become “an increasingly attractive hub for innovative companies like ours,” adding, “It’s a shame it’s gotten to this point, but Delaware has left us little choice.” He increasingly cited “unpredictable outcomes” in Delaware Chancery Court as a key factor in this move.
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Texas touted as new hub for innovators
Musk helped launch the so-called “Dexit” trend last year by reincorporating SpaceX and Tesla into Texas, following a Delaware ruling that invalidated his previous $56 billion Tesla pay package. Now based in Texas, Tesla investors this month approved a new compensation plan that could be worth up to $1 trillion if aggressive targets are met.
Musk also used Wednesday’s fair to pitch the Texas capital.
Delaware is facing an increasing number of departures
As noted in a CNBC reportDelaware remains the dominant domicile state for publicly traded companies, long prized for its flexible corporate code and specialized Court of Chancery, which many governance experts say strikes a careful balance between executives and shareholders. Texas, meanwhile, has moved to sue big companies with new business courts and laws that make it harder for shareholders to sue executives for breaches of fiduciary duty.
Dropbox Inc. (NASDAQ:DBX), TripAdvisor Inc. (NASDAQ:TRIP) and Andreessen Horowitz are among other high-profile names who recently announced their departure from Delaware.
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