What is a 'Corporate Headquarters'

A corporate headquarters is place where a company's executive management and key managerial and support staff are located. A corporate headquarters is considered a business' most prestigious location and may also lend prestige to its host city and help attract other businesses to the area. Businesses frequently locate their corporate headquarters in large cities because of the greater business opportunities, talent, infrastructure and services they offer.

Breaking Down 'Corporate Headquarters'

A corporate headquarters may be a single building or campus of buildings that serve as a home for a corporation's executive, managerial, human resources, corporate communications, legal and accounting teams, as well as its main support teams and staff. A company's chief executive officer (CEO) will be located in a corporate headquarters. Where a corporation's headquarters is located can play a significant part in helping form its culture and mission, as well as informing its philanthropic and business practices.

A business' corporate headquarters is not necessarily the location where the majority of its employees work. Offices of a business that are not the corporate headquarters are called "branch offices." In the vernacular, corporate headquarters may be referred to simply as "corporate" or the "head office." For example, a manager might say to an employee, "Our rules regarding sick days come from corporate."

Corporate Headquarters and State of Incorporation

A corporation's physical corporate headquarters is rarely the same place as where it is incorporated. About half of the publicly traded corporations in the United States (and about 60% of Fortune 500 companies) are incorporated in the state of Delaware, whose General Corporation Law and Court of Chancery provide especially solid legal footing for businesses. As recently as 2015, New York topped the list with 55 Fortune 500 corporations headquartered in the state, followed by Texas with 54 and California with 53.

Corporate Headquarters: Changing Locations

Recent history has shown a few examples of large U.S. corporations moving their corporate headquarters or even adopting a system of dual corporate headquarters. In 2001, The Boeing Co. made big news by moving its corporate headquarters to Chicago from Seattle. Boeing had also considered Dallas and Denver, but in the end opted for $60 million of promised tax breaks and incentives over 20 years from both the city and the State of Illinois. In 2017, after over 40 years General Electric uprooted its headquarters from the Connecticut suburbs to Boston to be closer to students and a younger labor pool. It received $145 in incentives from Boston and the State of Massachusetts for the move, bringing along 200 members GMs executive team. Its Boston headquarters is staffed by 800 workers.

Corporate Headquarters: Amazon HQ2

More recently, Seattle-based Amazon.com engaged in a highly-publicized search and what amounted to a tax break and incentive bidding process to locate a second, supplemental headquarters known as "HQ2." The company stipulated that candidate cities should be in metro areas of at least one million people, be close to both a population center and an international airport, near major highways, be accessible to mass transit, and have plenty of office space for future expansion. While tax incentives were not named, they are expected. For example, Newark, N.J., has proposed as much as $7 billion in incentives, Montgomery County, Md., has said it would allocate $5 billion to infrastructure, and Chicago has said it would pony up $2 billion. For its part, Amazon promises to place 50,000 highly paid workers in the new headquarters and spend $5 billion on new construction.

Corporate Headquarters: Tax Breaks and Incentives

Amazon received over 200 proposals from governments and economic development organizations in the U.S., Canada and Mexico that touted multi-billion-dollar infrastructure projects, appeals based on the civic character, practical and cultural amenities of each city, and outright offers of billions of dollar of tax breaks. Experts on the subject contend that cities may overbid in such cases and wind up negating the benefits of winning. They also contend that use of tax breaks to secure company headquarters are best spend of keeping locations and workers that are already in place rather than attempting to land new corporate residents.

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