The California Secretary of State has recently published her report under California's statutes imposing gender and racial/ethnic quotas on the boards of directors of publicly held corporations having their principal executive offices in California. Cal. Corp. Code §§ 301.3(d) and 301.4(c). The Secretary of State generates the report based on the Securities and Exchange Commission's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system and the reports required to be filed by "publicly traded corporations" pursuant to Sections 1502.1 and 2117.1. While the point of the report appears to be to document the degree of compliance with California's quota laws, it also highlights how truly unpopular California has become for corporations.
"The World Rushed Out"
The Secretary of State found that a total of 716 "publicly held corporations" identified in their Form 10-Ks a California address for their principal executive offices. However she also reports that 40 publicly held corporations moved their executive offices out of California while only 13 moved their executive offices to California. Thus, California suffered a net loss of 27 headquarters of "publicly held corporations" during the year. This follows a net loss of 16 headquarters reported for the prior year. This rapidly accelerating loss of headquarters does not bode well for the state.
Also alarming was the fact that only 39 of the "publicly held corporations" identified in the report were incorporated in California. Thus, California's share was a paltry 5% of "publicly held corporations" with principal executive offices located in the state. In comparison, 24 and 18 "publicly held corporations" were incorporated in Nevada and the Cayman Islands, respectively.
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