Several friends and associates of billionaire Elon Musk have reported that Tesla’s general manager is planning to move to Texas because he put his homes up for sale in California this year when he entered. conflict with government agencies due to restrictions regarding Covid-19.
Meanwhile, Musk is expanding his operations in Texas and is on good terms with Republican Gov. Greg Abbott, News.ro reports.
Musk, the second richest man in the world after Jeff Bezos, is already a regular in Texas. He spends most of his time between Austin, where Tesla and his Boring Company operate, and a coastal town called Boca Chica, which is home to a SpaceX unit.
SpaceX started in Texas in 2003.
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Musk often posts photos and videos to Twitter of the SpaceX test and launch center, known as the Starship Production Complex.
Often criticized by the super-rich for its high taxes and rigid regulations, California saw an exodus of big names in the tech sector during the pandemic as companies tried to cut costs and prepare for a future of distributed labor.
Musk was one of the strongest critics this year, comparing the state to a sports team in the league that was satisfied and “developed a problem for being a winner for too long.”
In May, while California businesses were shut down due to the pandemic, Musk wrote on Twitter that he was moving Tesla’s headquarters and future development from California to Texas and Nevada.
Leaving California, where the country has the highest income tax in Texas, a state that does not tax income tax, could save Musk billions of dollars based on his 2018 compensation package.
Musk has received 101.3 million options (adjusted for this year’s 5: 1 stock split) to be exercised over time as the company reaches certain milestones, including market capitalization.
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Tesla shares are up 782% in the past year. By October, Musk had won awards worth about $ 20 billion net of tax, based on closing deals on Thursday, some of the total potential.
Musk claims he is selling all of his “physical goods,” and wrote on Twitter in May that “he will not own a home.” Soon after, Musk put several homes up for sale in California.
CNBC has been unable to find any public records suggesting it officially changed its place of residence, and the White Pages online database still lists its primary address as Los Angeles.
Even people who know him well and his general plans to move to Texas say they don’t know exactly where he is when he is there and that he tries to keep these details private.
The state’s highest-ranking official, Governor Abbott, appears confident that Musk will take this step.
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In July, Abbott told CNBC’s “Squawk Box” that Musk had told him he had gotten his Texas driver’s license and that he was now a “good faith Texan.”
Abbott also said Musk is building his future Tesla factory in Texast, as it will give him the freedom to “expand as he wishes to expand”.
When contacted on the subject, an Abbott spokesman declined to comment on Musk’s plans. In order to attract the new Tesla factory, local officials gave the company tens of millions of dollars a property tax exemption.
Musk confirmed in a second quarter financial report published in July that the plant will cover approximately 2,000 acres 15 minutes from downtown and will be used to build Cybertruck, Semi, Model 3 and Model Y vehicles .
The billionaire said the factory will 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.
Boring investor Joe Lonsdale, Palantir co-founder and a friend of Musk’s, recently moved to the Austin area of Silicon Valley.
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For now, Tesla’s headquarters are still in Palo Alto, California, and the company still builds cars in nearby Fremont. SpaceX’s main address is Los Angeles County.
Musk’s personal financial motivation for leaving California is significant. According to the 10-year compensation package approved in 2018, Musk could win more than $ 50 billion in shares and prices in 12 tranches, reaching fourth.
Musk must pay income tax when exercising the options. The highest income tax rate in California is 13.3%. In Texas it is zero.
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Musk began collecting awards after the company reached a market cap of $ 100 billion, along with specific values for adjusted earnings or earnings. Each increase in market capitalization by $ 50 billion, to a total market value of $ 650 billion, will result in a new reward if a revenue or profitability target is met.
The company is already worth more than $ 550 billion after starting 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 announced in its latest quarterly report.
This equates to approximately 33.8 million of the 101.3 million shares. To keep the package intact, Musk must remain either CEO or CEO and product manager. Musk and Tesla and SpaceX spokespersons did not immediately respond to requests for comment.