Elon Musk has announced that Tesla shareholders are voting in favor of his $56 billion pay package.

Tesla shareholders have indeed shown their support for Elon Musk’s proposed $56 billion pay package and the relocation of the company’s legal home to Texas. Musk himself expressed gratitude for this backing on his social media platform X. The approval of this record-breaking compensation plan could help allay concerns about Musk’s future role at Tesla, and it might provide leverage in the ongoing legal battle over the package’s validity.

The preliminary voting results suggest a mix of institutional and retail investor support for the proposal. However, despite shareholder approval, Musk may still face legal hurdles, particularly in convincing the Delaware judge who previously criticized the Tesla board’s relationship with him. Additionally, major proxy firms like Glass Lewis and Institutional Shareholder Services, along with significant investors, had advised against the pay package.

Aside from the compensation vote, Tesla shareholders also weighed in on other matters, including the relocation of the company’s legal headquarters and the re-election of board members such as Musk’s brother, Kimbal Musk, and James Murdoch.

While Musk’s leadership is widely acknowledged as instrumental to Tesla’s success, the company has faced challenges, including slowing sales and profitability, and controversies surrounding Musk’s activities outside of Tesla. Nonetheless, the board maintains that Musk’s pay package is essential to retaining his commitment to the company.

The legal battle over the compensation package’s validity continues, with the Delaware court’s previous ruling highlighting concerns about the board’s decision-making process in 2018. The shareholder vote, while significant, may not fully resolve the underlying issues, leaving the final decision in the hands of the courts.