Elon Musk hates Delaware now. Here’s why millions of businesses love it

It’s an interesting take on a state that does pretty much all it can to appeal to business. It’s no secret that Delaware is a legal low-tax haven for some 2 million companies, including massive public entities like Alphabet, Amazon, Meta, Visa, Walmart, and, yes, Tesla, among others—it is famously said that the state is home to more corporations than people. Those companies collectively save billions of dollars in corporate income taxes thanks to the state’s laws.

“Delaware is the king of corporate law,” says Benjamin Hicks, cofounder of Charlotte-based corporate law firm Wagner Hicks PLLC.

Musk has made many promises that never quite seem to come to fruition. But in this case, the largest payout ever awarded to a corporate executive is on the line, and rescinding it would threaten the wealth of the world’s richest man. Still, what’s best for Musk’s net worth isn’t necessarily what’s best for shareholders. Here’s what to know.

Why was Musk’s compensation package voided?

In 2018, the compensation package for Musk that was approved by almost 75% of Tesla shareholders was largely based on hitting certain performance metrics related to market value, revenue, and adjusted earnings. Tesla hit those lofty goals by the end of 2022—much faster than some thought possible—earning Musk the $50 billion-plus stock option payday.

A shareholder sued to get the agreement nullified back in 2018, arguing that the company’s board of directors misled investors about the agreement and that it had conflicts of interest when it approved the package. Chancellor Kathaleen McCormick, the judge…