On Monday, Elon Musk revealed Neuralink changed its legal home to Nevada after a Delaware judge denied his $55.80 billion Tesla pay bundle.
State records showed that the legal headquarters for the American neurotechnology company was changed on February 08. The switch occurred a week after the startup conducted its first human trial for its brain-chip implant.
In September, the US Food and Drug Administration (FDA) cleared clinical trials for Neuralink’s flagship product. It involves using a robot to surgically insert a brain-computer interface (BCI) in the region of the brain that controls motion.
Neuralink said the initial goal is to enable the human subject to control a mouse cursor or keyboard with thoughts alone. However, the end goal is to assist patients in overcoming paralysis and similar neurological conditions.
Chancellor Kathaleen St. Jude McCormick’s January 30 ruling came five years after Tesla shareholders sued to terminate the compensation scheme. The lawsuit alleged that the compensation package should be voided as it resulted from sham negotiations.
Moreover, the plaintiffs argued that the directors provided misleading and incomplete disclosures to obtain shareholder approval. Ultimately, Judge McCormick invalidated the 2018 payment package, citing the flawed process and unfair price.
Elon Musk, the president of Neuralink, went on a brief rant on X on February 01. He advised businessmen to never incorporate in Delaware and choose Nevada or Texas instead.
Tesla Controversy Shifts Focus to Neuralink
Industry watchers cautioned that Elon Musk may fulfill his vow to abandon important Tesla projects to dedicate more time to Neuralink. Incidentally, the legal loss came nearly a month after Musk demanded more control over the electric vehicle manufacturer.
The decision came amid growing scrutiny of ballooning CEO payment plans and the widening compensation gap between CEOs and rank-and-file workers. Insiders exposed that Tesla factory workers in the US earned between $22.00 and $39.00 per hour.
Legal experts stated that Delaware is a favorite state for incorporation because of its management-friendly laws. They added that McCormick’s ruling is a rarity in Delaware, which prioritizes management over shareholders.
Skeptics claimed Musk moved Neuralink to pressure Tesla shareholders to submit to his demand for 25.00% control of the automaker.