Tesla transferring headquarters to Texas from California By Reuters
© Reuters. FILE PHOTO: Elon Musk, CEO of Tesla Inc, walks next to a screen showing a picture of the Tesla Model 3 car during an opening ceremony for Tesla’s Chinese-made Model Y program in Shanghai, China, Jan. 7, 2020. REUTERS / Aly Song / File Photo
By Hyunjoo Jin and Subrat Patnaik
Elon Musk, CEO of Tesla Inc.
Tesla (NASDAQ 🙂 joins Oracle (NYSE :), HP (NYSE :), and Toyota Motor (NYSE 🙂 on moving its US headquarters from California to Texas, which has relatively high taxes and cost of living. While new ideas and businesses are also being developed in Silicon Valley, Texas is known for having cheaper labor and less stringent regulations.
“I am pleased to announce that we are moving our headquarters to Austin, Texas,” said Musk at the company’s annual meeting held at the Texas auto plant.
“It’s not about Tesla leaving California,” he said, saying it plans to increase production at its main California facility and Nevada facility by 50%.
The Fremont, California factory is still “uptight” and making it difficult for people to afford homes in California, he said.
Billionaire Musk himself moved from California to the Lone Star State in December to focus on the electric car maker’s new facility in the state and its SpaceX rocket company, which has a launch site on the southern tip of Texas.
Musk had a rocky relationship with California at times, threatening to relocate Tesla headquarters and future programs to Texas amid a dispute over the closure of Tesla’s Fremont, California factory due to COVID-19, for example.
At the meeting, he showed what looked like a cowboy-style belt buckle emblazoned with “Don’t Mess With T” – the T in the style of the Tesla logo. The phrase is based on a venerable and popular Texas anti-littering campaign – Don’t mess with Texas.
DIRECTOR TERM CUT
Despite some criticism from activist shareholders and a proxy advisory service, shareholders followed the directions of the Board on several key proposals, including the re-election of Kimball Musk, Elon’s brother, and James Murdoch as directors.
However, they voted in favor of a proposal by shareholders to reduce the term of office of directors from three years to one year and a proposal for additional coverage of diversity and inclusion efforts.
“It is unfortunate that shareholders did not agree to remove Murdoch and Musk’s brother. But I think they know the pressure is on them,” said Stephen Diamond, a professor at Santa Clara University School of Law.
“You have a lot more governance work to do. Just changing the term is just an artifact of a larger governance problem,” said William Klepper, professor at Columbia Business School.
Advisory firm Institutional Shareholder Services (ISS) had recommended Tesla investors not to re-elect the two directors because of concerns about excessive compensation packages for non-executive board members.
Shareholders also voted against a shareholder proposal calling for a study into the impact of Tesla’s use of arbitration on harassment and discrimination in the workplace.
The proposal, rejected by the board, came into the spotlight after a black former contract worker won a $ 137 million jury award on Monday against Tesla for racism in the workplace.