(Bloomberg) -- Elon Musk’s car company on Wednesday proposed to grant him the same $56 billion pay package that its shareholders approved six years ago — and that Delaware’s top business law judge shot down in January as excessive.

In a proxy filing, Tesla Inc. calls for the compensation plan to be ratified all over again, despite the judge’s decision, and also asks investors to shun Delaware and vote for Tesla to reincorporate in Texas. A special committee the company formed this year urged that the two matters be voted on together so the Texas move wouldn’t be seen as a way to grant Musk a pay deal he couldn’t get in Delaware.

Read More: Tesla Asks Investors to Approve Musk’s $56 Billion Pay Again 

The carmaker will convene its annual meeting on June 13, and investors will have their say on both proposals.

What are the legal ramifications? Here are some answers.

What’s next in the Delaware case?

The judge scheduled a July 8 hearing to decide whether lawyers for the Tesla shareholder who brought the case should get $6 billion in Tesla stock as a legal fee for their successful challenge to Musk’s compensation plan. Once she makes that ruling and issues a final order in the case, Musk is free to ask the Delaware Supreme Court to review her decision on his pay.

How do Tesla’s proposals affect the case?

Unless the court’s decision is reversed on appeal, the pay package is void under Delaware law. But if the shareholders approve the move to Texas as Tesla’s corporate home and it is finalized, any new challenge to Musk’s pay would have to be filed there, said Charles Elson, a retired University of Delaware professor who founded the school’s Weinberg Center for Corporate Governance.

Why do Musk and Tesla want to move to Texas?

Musk and his fellow directors say the court’s decision was wrong and hope Texas law will provide more latitude for big corporate decisions, like the board’s blessing of the largest executive pay package in history. The Tesla board says Musk got extraordinary performance out of the company, met his targets and deserves the pay that the shareholders approved. Musk has launched a “Ditch Delaware” campaign to encourage other business titans to switch their companies’ incorporation. So far he’s gotten little response.

Read More: Tesla Investors Sound Off to Judge Who Voided Musk Pay Plan

Why Texas in particular?

Musk moved Tesla’s headquarters to Austin in 2021 from California after criticizing that state’s Covid restrictions. Texas has been luring companies for years by touting its low taxes and light regulatory touch. Being Tesla’s legal home would dovetail with the state’s push to develop its own business court system. Legal experts expect Texas to prove more forgiving to directors and executives when it comes to reviewing corporate acts such as the approval of pay packages.

Is that new business court up and running?

No. The courts won’t even go into operation until September, and Texas officials are struggling to recruit judges with the requisite experience in complex business litigation. The starting salary for a judge on a Texas business court would be $140,000, while a Delaware Chancery judge starts at almost $185,000.

Any chance a Tesla shareholder could sue in Delaware to block a move to Texas?

Yes. Any Tesla shareholder could sue over the move, arguing investors’ rights are being improperly weakened by shifting the company to a state with less stringent corporate governance rules. In fact, there’s a pending case involving a challenge to the move of online travel company Tripadvisor to Nevada that could affect a Tesla move. The Delaware Supreme Court recently agreed to review a judge’s finding that Tripadvisor has the power to relocate.

Why was Tesla incorporated in Delaware in the first place?

Delaware is the incorporation capital of the US, with more than 1 million businesses set up in the state. Almost 70% of Fortune 500 companies are incorporated there, mostly to take advantage of Delaware’s nearly 100 years of corporate law rulings and its Chancery Court, which can quickly hear corporate litigation without a jury. The court’s jurists — such as chief judge Kathaleen St. J. McCormick, who wrote the 200-page decision that sank Musk’s compensation deal — are recognized as business law experts.

Read More: Musk Pay Package Voided, Threatening World’s Biggest Fortune 

Has Musk already yanked any of his other companies from Delaware?

Yes. He moved his closely held SpaceX to Texas in February. Since the space exploration company isn’t public, shareholders didn’t get a vote on the move. In a social media post celebrating the move, Musk urged, “If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible.” He reincorporated his privately held brain implant company Neuralink Corp. to Nevada earlier this year as well.

The Tesla case is Tornetta v. Musk, 2018-0408, Delaware Chancery Court (Wilmington).

--With assistance from Dana Hull.

©2024 Bloomberg L.P.