Elon Musk’s brain implant company, Neuralink, has officially changed its legal corporate domicile from Delaware to Nevada, following a Delaware judge’s decision to strike down Musk’s $55.8 billion pay package as Tesla’s CEO. The move, reflected in state records, marks Neuralink’s legal transition to Nevada, with Delaware records now listing the company’s legal home as Nevada.
This decision aligns with Musk’s public statements, particularly on X (formerly Twitter), where he advised against incorporating companies in Delaware. After the court ruling, Musk wrote, “Never incorporate your company in the state of Delaware,” and later suggested, “I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters.”
Most corporations traditionally choose Delaware for legal incorporation due to favorable corporate laws. Legal experts note that Delaware’s business-friendly environment historically favors company management over shareholders. Erik Gordon, a business and law professor at the University of Michigan, commented, “Delaware built its preferred state of incorporation business by being friendly to company management, not shareholders.”
The move comes after a January 30 ruling by Delaware Chancellor Kathaleen St. Jude McCormick, invalidating the $55.8 billion pay package Tesla established for Musk in 2018. McCormick deemed the process “flawed” and the price “unfair,” labeling it as “the largest potential compensation opportunity ever observed in public markets by multiple orders of magnitude.” This decision led to Musk losing his top spot on the Forbes list of wealthiest people.
The ruling concluded that Tesla’s board lacked independence from Musk, with the judge rejecting the argument that the hefty pay plan was necessary to incentivize Musk to stay with the company. The court decision followed a five-year lawsuit by shareholders accusing Musk and Tesla directors of breaching their duties and claiming the pay package resulted from sham negotiations with non-independent directors.
While Musk’s supporters argue that he deserves unique compensation due to his indispensable role at Tesla, the legal battle underscores ongoing debates about executive pay and corporate governance. Neuralink, as a privately held company co-founded by Musk, is also impacted by these legal maneuvers. Musk, listed as Neuralink’s president in Nevada documents, has yet to comment on the recent changes.
Musk previously mentioned on X that Neuralink implanted its first device in a human, without providing further details about the patient or the implantation procedure.