In a surprising turn of events, Elon Musk, the CEO of Tesla, announced that shareholders will be voting on whether to change the company's state of incorporation to Texas. This announcement came shortly after a Delaware judge invalidated Musk's $56 billion pay package. Musk conducted an informal poll on his social media platform, X, and an overwhelming 87.1% of the 1.1 million users who responded agreed that Tesla should move to Texas.

Musk expressed his satisfaction with the public vote, stating, "The public vote is unequivocally in favor of Texas!" However, he did not provide any further details about the plans, and Tesla has yet to comment on the matter. It is worth noting that Tesla's physical headquarters is already located in Austin, Texas, as Musk moved the company's home base from Palo Alto, California, in 2021.

Currently, Tesla is registered in Delaware, a state known for its business-friendly environment. To proceed with the vote to change the incorporation, Musk would likely need approval from Tesla's board of directors. This move comes in the wake of Judge Kathaleen McCormick of Delaware's Court of Chancery voiding Musk's pay package, describing it as an "unfathomable sum" and deeming it excessive and unfair to the company's stockholders. The judge also criticized the flawed process by which Tesla's board approved the package.

The case originated from a lawsuit filed by Tesla shareholder Richard Tornetta, who argued that the 10-year compensation plan, filled with stock-based incentives, was excessive. Tornetta accused Tesla's board of allowing Musk to create the framework and financial terms, which remained fundamentally unchanged. The pay package entitled Musk to earn 12 “tranches” of stock options tied to Tesla's stock performance over the 10-year term.

Interestingly, Judge McCormick, who presided over this case, was also involved in the legal battle between Musk and the company formerly known as Twitter. In that case, Twitter sued Musk after he tried to back out of a deal to buy the firm for $44 billion. Eventually, Musk honored the original terms and changed the company's name to X as part of a chaotic overhaul.

If the court's ruling stands after appeal, it would have significant implications for Musk's personal fortune. Losing the stock options, valued at $51.1 billion, would cause his net worth to plummet to $154.3 billion, making him the world's third-richest person, according to the Bloomberg Billionaires Index. This would mark a significant shift for Musk, who has held the title of the richest individual alive for years.

In light of these developments, Musk's decision to let shareholders decide on moving Tesla's corporate listing to Texas reflects his desire to involve them in crucial matters. His previous poll on X before making decisions demonstrates his inclination to gauge public opinion. Moving forward, the outcome of the shareholder vote will determine whether Tesla's state of incorporation will be changed, potentially marking another significant shift for the company.