Tesla shareholders have approved a record-breaking pay package for CEO Elon Musk and endorsed a plan to relocate the firm’s legal headquarters to Texas.
Earlier this year, a judge in Delaware blocked the package, citing concerns that it was unfair to shareholders.
The vote represents a significant victory for Musk, who had campaigned vigorously for the payout, potentially worth up to $56 billion (£43.9 billion) depending on Tesla’s share price.
“Hot damn, I love you guys,” he told a crowd of enthusiastic shareholders who had gathered in Texas for the firm’s annual meeting.
However, the vote is not binding and legal experts have said it is not clear if the court that blocked the deal will accept the re-vote and allow the company to restore the pay package.
“The vote changes nothing,” said Mathieu Shapiro, a managing partner at law firm Obermayer Rebmann Maxwell & Hippel.
“It only offers Tesla opportunities to try to use the vote to obtain a better decision going forward,” he added.
The eye-popping sum had sparked criticism and raised concerns that the company’s board was too submissive and close to Musk.
Musk announced his intention to move the firm’s legal headquarters to Texas after a judge in Delaware, where the company is currently incorporated, voided his pay package, siding with a small investor who had sued over the deal.
The fight over the plan highlighted concerns about Musk’s leadership, especially as Tesla’s share price has fallen from its peak and its position in the electric car industry faces increasing pressure.
Musk rallied his fan base in support of the deal, appealing particularly to individual investors, who constitute an unusually large portion of the firm’s shareholder base.
“It’s a pretty ringing endorsement,” said car industry analyst Karl Brauer.
Musk received sufficient shareholder support “to justify the package,” he added.
The company did not immediately disclose the voting margin.
Musk had hinted at the results in a post on his social media platform, X, formerly known as Twitter.
Following Musk’s announcement, Tesla shares closed up nearly 3%.
The compensation plan grants Musk rights to approximately 300 million shares—about a 10% stake in the company—as a reward for achieving goals once deemed unattainable, such as reaching a $650 billion valuation.
“My understanding is that there’s been about 1,100% appreciation in Tesla stock. And that’s pretty, pretty impressive. Most chief executives have never done anything like that,” said Mr Brauer.
In her ruling earlier this year, Judge Kathaleen McCormick deemed the sum “unfair” and criticized the process for determining the package, calling it “deeply flawed” due to the board being dominated by Musk.
Tesla described the decision as “fundamentally unfair and inconsistent with the will of the stockholders.”
The company then resubmitted the deal for another vote and asked its shareholders to support a plan to reincorporate the company outside the state of Delaware.
“It will be interesting to see if another court is willing to credit a vote taken after the trial court’s decision,” noted Mr Shapiro.
The board justified Musk’s package, stating that Tesla had achieved its ambitious targets under his leadership and that the compensation was essential to keep him dedicated to the company.
Tesla executives also expressed their support for the package in social media posts, emphasizing that Musk is crucial to the company’s success.
Musk promised some shareholders who cast votes a personal tour of Tesla’s factory in Texas.
The package, estimated to be worth 300 times more than what the highest-paid CEO in the US earned last year, received backing from 73% of shareholders who voted six years ago.
At the meeting on Thursday, shareholders also approved the re-election of two board members: James Murdoch, son of media tycoon Rupert Murdoch, and Musk’s brother, Kimbal Musk.