Tesla shareholders voted on Thursday to restore CEO Elon Musk's record $44.9 billion (€41.8 billion) pay package that was thrown out by a Delaware court earlier this year.

The proposal passed despite opposition from some large institutional investors and proxy firms, reflecting the strong support Musk enjoys among the company's retail investor base. 

The favorable vote at Tesla's annual shareholder meeting does not override the court's ruling and does not mean Musk will get the all-stock pay reward anytime soon.

But it is a strong sign that Tesla shareholders have confidence in him.

Tesla shares rose on Thursday after Musk took to X, which is also owned by him, to say that he was confident the pay plan would be approved.

Musk's pay package is likely to remain tied up in the Delaware Chancery Court and Supreme Court for months as Tesla tries to overturn the Delaware judge's rejection.

What's the issue with the pay package?

The lucrative stock award was first approved by Tesla's board and stockholders in 2018.

It was previously worth as much as $56 billion in Tesla stock.

The package has declined in value in tandem with Tesla stock and was valued at $44.9 billion in an April regulatory filing.

Tesla stock has been down for the year, as the company has faced against increased competition in China.

In the January ruling, Delaware Chancery Court Chancellor Kathaleen McCormick called the pay package "unfathomable," siding with the shareholders who challenged the package. 

The judge ruled that Musk essentially controlled the Tesla board when it ratified the package in 2018, and that it failed to fully inform shareholders who approved it the same year.

Musk reassured investors at the annual meeting on Thursday that he will be at the company, telling them he can't sell any stock in the compensation package for five years.

"It's not actually cash, and I can't cut and run, nor would I want to," he said. 

Shareholders have previously raised concerns about Musks's many side projects.

rm/sri (Reuters, AP)