Several friends and associates of billionaire Elon Musk have announced that the CEO of Tesla intends to move to Texas, as he put his homes up for sale in California this year when he came into conflict with state authorities over restrictions on Covid-19.
Meanwhile, Musk is expanding his business in Texas and has a good relationship with Republican Gov. Greg Abbott, reports News.ro.
Musk, the world’s second richest man after Bezos, is already often in Texas. He spends most of his time between Austin, where Tesla and his annoying company operate, and the coastal village of Boca Chika, which hosts the SpaceX unit.
SpaceX started operating in Texas in 2003.
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Musk often posts photos and videos on Twitter of the SpaceX Testing and Launch Center, known as the Asterisk Production Complex.
California, often criticized by the super-rich for high taxes and strict regulations, saw an exodus of big names in the tech sector during the pandemic as companies sought to cut costs and prepare for the future of a distributed workforce.
Musk was among the strongest critics this year, comparing the country to a league sports team that became satisfied and developed “a problem because it has been a winner for too long”.
In May, as businesses in California were forced to stay closed due to the pandemic, Musk tweeted that he was relocating Tesla headquarters and future development from California to Texas and Nevada.
Leaving California, where the country has the highest income tax, in Texas, which does not impose income tax, could save Musk billions of dollars based on his compensation package in 2018.
Musk received 101.3 million options (adjusted for the 5 to 1 stock split this year) that are used over time as the company reaches certain milestones, including market capitalization.
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Tesla shares have risen 782% in the last year. In October, Musk won prizes worth about $ 20 billion before tax, based on closing transactions on Thursday, part of the total potential.
Musk claims to be selling all his “physical goods”, and in May he wrote on Twitter that he “would not own a single house”. Shortly afterwards, Musk put several California homes up for sale.
CNBC has not been able to find public records suggesting it has officially relocated, and the White Pages website still lists its primary address as Los Angeles.
Even people who know him well and know his general plans to move to Texas say they do not know exactly where he is when he is there and that he is trying to keep these details private.
The state’s top official, Governor Abbott, appears convinced that Musk will make the move.
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In July, Abbott told CNBC’s Squawk Box that Musk had told him he had obtained his driver’s license from Texas and that he was now a “well-meaning Texan.”
Abbott also said Musk was building his future Tesla plant in Texas because it would give him the freedom to “expand the way he wants to expand.”
When contacted, Abbott’s spokesman declined to comment on Musk’s plans. To help attract Tesla’s new plant, local authorities have given the company tens of millions of dollars in property tax exemptions.
Musk confirmed in a second-quarter financial report released in July that the plant would occupy about 2,000 acres 15 minutes from downtown and be used to build Cybertruck, Semi, Model 3 and Model Y vehicles.
The billionaire said the plant would start delivering cars next year. In addition to SpaceX and Tesla, Boring Company has an office in Texas. Seven of the 17 jobs the company offers on its website are in Austin, and Musk has proposed building a tunnel there.
Annoying investor Lonsdale, co-founder of Palantir and a friend of Musk, recently moved to the Austin area of Silicon Valley.
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For now, Tesla is still headquartered in Palo Alto, California, and the company continues to build cars in nearby Fremont. SpaceX is headquartered in Los Angeles County.
Musk’s personal financial motivation for leaving California is significant. Under his 10-year compensation package approved in 2018, Musk could win more than $ 50 billion in 12-tranche stocks and prizes, reaching fourth.
Musk has to pay income tax when exercising options. California’s highest income tax rate is 13.3%. It is zero in Texas.
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Musk began collecting rewards after the company reached a market capitalization of $ 100 billion, along with specific values for adjusted revenue or earnings. Any increase in market capitalization of $ 50 billion to a total market value of $ 650 billion will result in another reward if the revenue or profitability target is met.
The company is already worth more than $ 550 billion, having started the year well below $ 100 billion. The second and third tranches were launched in the third quarter, and the fourth was completed in October, the company said in its last quarterly report.
This equates to approximately 33.8 million of 101.3 million shares. For the package to remain intact, Musk must remain either CEO or CEO and Product Manager. Spokesmen for Musk and Tesla and SpaceX did not immediately respond to a request for comment.