Word Smith: DExit

Word Smith: DExit

You have heard of Brexit, with Britain leaving the protection and restrictions of Brussels, now we have DExit! Here’s an explanation:

Lawyer Greg Varallo, trying to justify the rights of compensation to his client, Elon Musk, tried to convince the justices the lower court ruling was a result of careful fact-finding and based on settled law. “There is nothing extraordinary about this trial opinion,” Varallo said. “What makes it truly extraordinary is that it addresses the largest pay package in human history, awarded to the richest man on earth, who is also one of the most powerful men on earth.” 

Prompted in part by the Musk pay ruling, large companies, including Tesla, Dropbox, and the venture capital firm Andreessen Horowitz, switched their legal homes from Delaware to Texas or Nevada, where courts are friendlier toward directors. Delaware lawmakers responded to the corporate departures, a trend known as “DExit,” by overhauling its corporate law. 

If Musk loses the appeal, he will still reap tens of billions of dollars in stock from Tesla, the electric vehicle company, which agreed in August to a replacement deal if his 2018 plan is not restored. Tesla has said the replacement plan will cost $25 billion or more in accounting charges. 

To prevent companies from leaving the state, Delaware lawmakers consider a corporate law revision

With their state’s status as a corporate haven in jeopardy, lawmakers in Dover were scrambling this year (2025) to change Delaware’s corporation law. A year ago, tech billionaire Elon Musk relocated SpaceX’s and Tesla’s incorporation from Delaware to Texas after a Delaware judge ordered Tesla to revoke Musk’s $56 billion pay package. More recently, Dropbox, Meta Platforms, and Tripadvisor have signaled they were leaving the state or considering doing so. More than 2 million businesses are incorporated in the tiny state’s franchise system, due in part to its specialized courts that handle business matters and disputes. Incorporation revenues generate $2 billion for the state, or more than a third of its annual revenue. Fearing a corporate exodus — popularly dubbed “DExit” — Gov. Matt Meyer, a Democrat, and other top lawmakers crafted a proposal in February to overhaul Delaware corporate law, making it tougher for shareholders to sue top executives. Critics argue the changes could curtail accountability for some of the world’s largest corporations. But Senate Majority Leader Bryan Townsend, the bill’s chief sponsor, said the prospect of an economic crisis in Delaware has become “very real and quite urgent.” — as reported by Mary Jackson

TXSE (Texas Stock Exchange)?

The exodus from Eastern States continues into 2026 and beyond. Two oil and gas giants, Chevron and EXXON have both left for both headquarters and registration to Texas. They claim it has little to do with the problems in New Jersey, New York and Delaware and more to do with the state where they have the most activity. At the same time the lawsuits against these two companies have unrelentingly pushed them on the social consciousness mode and they have decided to pack up and leave town. It doesn’t hurt that the Texas Stock Exchange is on its way, so stay tuned for more corporate movement over the years.