eXp to reincorporate in Texas
During its annual meeting on May 8, eXp World Holdings shareholders voted to approve the brokerage’s proposed move from Delaware to the Lone Star State.
On the heels of a legal setback in Delaware, eXp World Holdings disclosed in February that it was looking to leave the Mid-Atlantic state and reincorporate in Texas — a proposal that has now been approved by a majority shareholder vote.
The motivation to move: Glenn Sanford, eXp World Holdings' founder and CEO, stated in a Feb. 25 SEC filing that Texas offers "a governance environment that is clearer, more predictable, and better suited to a company of our size and complexity" compared to Delaware.
While there is no mention of the company's legal woes, the filing was submitted just six weeks after a Delaware judge allowed a sexual assault lawsuit against the brokerage and senior leaders to proceed. In a statement shared with Real Estate News at the time, however, the company said it had arrived at the reincorporation decision "after more than a year of significant deliberation and review."
Lobbying shareholders: Ahead of the shareholder meeting, eXp launched a messaging campaign, copied in various SEC filings, telling stockholders that reincorporation would have "real financial benefits for the company (which benefits all of us as stockholders)" and stating that Texas law was "interest-aligned" with the firm's agents.
The communications also noted that the move could not be approved solely by affiliated shareholders — company officers and board members — but required a "yes" vote from a majority of all eligible shareholders.
The proposal was approved on May 8 by more than a 2-to-1 margin, though among unaffiliated shareholders, the vote was much closer, with roughly 40 million "yes" votes and 37 million "no" votes.
According to an eXp spokesperson, "the reincorporation is expected to be completed in the near term."
The 'DExit' trend: Texas has been actively wooing companies currently incorporated in Delaware, positioning itself as a more business-friendly environment in terms of litigating shareholder disputes.
Other major companies to propose reincorporating from Delaware to Texas this year include Dell and Exxon, while Tesla made its high-profile move to the Lone Star State in 2024.