Elon Musk’s company Neuralink, known for its brain implants, relocated its legal headquarters from Delaware to Nevada after a Delaware judge invalidated Musk’s $55.8 billion compensation package as CEO of Tesla. The physical headquarters of Neuralink remains in Fremont, California, but its legal domicile is now Nevada, as per state records from both Delaware and Nevada.
This decision followed Musk’s announcement on X, previously known as Twitter, where he suggested Tesla shareholders might vote on moving the company’s legal registration to Texas. Musk advised against incorporating in Delaware post the court ruling, recommending Nevada or Texas instead.
According to legal experts, corporations often choose Delaware due to its favorable corporate laws, which prioritize management over shareholders, as noted by Erik Gordon, a business and law professor at the University of Michigan.
Delaware Chancellor Kathaleen St. Jude McCormick’s ruling on January 30th invalidated Tesla’s hefty pay package for Musk, citing flaws in the process and deeming the price unfair. McCormick’s ruling also displaced Musk from the top of Forbes’ wealthiest individuals list.
In Nevada documents, Musk is identified as the president of Neuralink, a company he co-founded. Requests for comment from Neuralink and Tesla remained unanswered as of Saturday.
McCormick criticized Tesla’s board for lacking independence from Musk, rejecting the argument that the generous compensation aimed to retain Musk’s leadership. She questioned whether such a plan was necessary for Tesla’s success.
Supporters of Musk argue that his unique role at Tesla justifies his exceptional compensation. Musk’s leadership has been integral to Tesla’s growth, transforming it into the world’s most valuable automaker, leading in electric vehicle sales and minimizing advertising costs through his public persona. Additionally, Tesla’s success has pressured other automakers to hasten their electric vehicle plans.
McCormick’s ruling came after shareholders filed a lawsuit alleging breach of duties by Musk and Tesla directors, claiming the pay package resulted from negotiations with non-independent directors.
The defense countered these claims, stating that the compensation plan was fairly negotiated by an independent compensation committee and tied to ambitious performance goals.
Musk’s recent X post mentioned the first human receiving a Neuralink implant, though no further details were provided about the patient.
