Tesla CEO letter urges shareholders to approve Texas reincorporation

Tesla has been putting in a lot of effort into encouraging TSLA shareholders to vote for Proposals Three and Four at the 2024 Annual Stockholders’ Meeting. While previous letters that have been sent about the matter have been quite focused on Elon Musk’s compensation plan, a recent letter from Tesla Board Chair Robyn Denholm has focused on Tesla’s proposed reincorporation to Texas. 

As could be seen in Denholm’s letter, Texas is already the business home for Tesla, so it only makes sense to make the Lone Star state into the company’s legal home as well. Texas is already home to Tesla’s headquarters and Giga Texas is the electric vehicle maker’s flagship production facility. As per the Board Chair, thousands of Tesla employees and some executives have also moved to Texas. 

More importantly, Denholm noted that Delaware is simply no longer the right jurisdiction for Tesla, and that the company has been studying a move out of Delaware for some time. Denholm provided some benefits that Tesla could see if it was reincorporated at the Lone Star state. “We need to be incorporated in a state that we believe will protect stockholder rights while, at the same time, support the kind of innovation that has driven the strong stockholder returns you have enjoyed over the past several years. That state is Texas,” Denholm wrote. 

Following is Denholm’s recent letter to TSLA shareholders. 

Dear Fellow Stockholder,

Tesla has been one of the most successful enterprises of our time. In just the past six years, we created more than $735 billion’ in value for you while advancing our mission of accelerating the world’s transition to sustainable energy and driving an unmatched pace of innovation in artificial intelligence. Our next growth vector is equally as ambitious.

But the present and future value Tesla is poised to deliver for all of you is at risk. This year’s Annual Stockholders’ Meeting is rapidly approaching, and we need your vote on two important proposals:

Vote FOR Proposal Three – Redomesticating Tesla in the State of Texas

Vote FOR Proposal Four – Ratification of the 2018 CEO Performance Award

Both of these proposals are critical to our future. But today, I want to talk about Texas.

Texas is already our business home. We need to make it our legal home, too.

Redomesticating in Texas is the logical evolution for Tesla. We have moved our corporate headquarters to Texas in 2021 and in 2022, we completed our Gigafactory Texas – Tesla’s principal manufacturing facility, the production hub for the Model Y and the home of the Cybertruck and our future vehicles. Thousands of our employees as well as our executives have moved there.

Texas also has a legal regime that will enable us to advance our world-changing mission and, in turn, continue to create additional value for you.

There is value in business disputes being heard where Tesla is headquartered – the community is directly impacted by court decisions affecting our Company.

Over the last several years it has become clear that Delaware is no longer the right jurisdiction for us. In fact, we have been studying a move out of Delaware for some time. Redomesticating in Texas builds on our relationships with the state and local communities, including government actors, employees and other stakeholders, which are critical to Tesla, and reinforces our commitment to the state.

We need to be incorporated in a state that we believe will protect stockholder rights while, at the same time, support the kind of innovation that has driven the strong stockholder returns you have enjoyed over the past several years. That state is Texas.

Everything is bigger in Texas, and being in Texas enables us to dream bigger for the future, and for all of you.

Sincerely,

Robyn M. Denholm

Chair of the Board

The decision of Tesla shareholders on Proposals Three and Four will be announced at the 2024 Annual Stockholders’ Meeting, which is scheduled for June 13, 2024. The meeting will be held at Giga Texas at 3:30 PM CT. Similar to previous Tesla events, the 2024 Annual Stockholders’ Meeting will be livestreamed.