Why execs are eyeing Elon Musk's ZIP code

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Executives in tech and other industries are watching closely as Elon Musk and other CEOs move their corporate headquarters to states with less restrictive COVID-19 regulations, Bloomberg reported Oct. 18.

Five things to know:

  1. CEOs are attracted to the lower taxes and cheaper rents in Texas and Florida, but they also have set up shop in these states because they have imposed fewer restrictions on their business operations during the pandemic.

  2. In October, Mr. Musk moved Tesla's headquarters from Palo Alto, Calif., to Austin, Texas. He signaled this decision in May 2020, when he tweeted criticism of Alameda County's move to  temporarily stop the company from resuming production at a plant during COVID-19 shutdowns.

    "Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be dependen [sic] on how Tesla is treated in the future. Tesla is the last carmaker left in CA," the tweet read.

  3. Peter Thiel and Keith Rabois, two of California's most prominent venture capitalists, also recently moved their businesses from the state, relocating to Miami.

  4. In 2019, Harvard Business School professor William Kerr, PhD, surveyed entrepreneurs at the Cambridge Innovation Center, an incubator for startups, and found their risk tolerance was 20 percent to 40 percent higher than their employees, stemming from high confidence that they can control outcomes in their lives.

  5. A 2021 study published in Social Science Research Network found that of Americans who moved between April 2020 and May 2021, those with higher incomes were most likely to move from places with more stringent COVID-19 regulations to areas with looser ones, a lower population density and lower rents.
 

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