Tesla shareholders reaffirmed their award of paying more than $45 billion to Elon Musk, the chief executive, after it was thrown out in a legal challenge.
The results of the vote, announced at Tesla’s annual meeting at its headquarters in Austin, Texas, on Thursday, are a strong sign that shareholders still have faith in Mr. Musk, and could persuade the judge who overturned the award to reinstate him.
The support for the salary award, which is made up of stock options, will come as a relief to Mr. Musk’s admirers, who fear the rejection will lead him to spend less time managing Tesla or even quit.
“We think that Elon is critical to Tesla’s success,” said Tasha Keeney, director of investment analysis at ARK Invest, which counts the car maker among its largest holdings. “I think it’s really important that Elon stays at the helm.”
The election was a setback for investors who had hoped it would send a message about executive accountability and limits on executive pay.
“This is a higher pay package than we’ve seen in the United States and I don’t think it’s a good precedent,” said Kristin Hull, founder and chief investment officer of Nia Impact Capital, which has pushed Tesla to improve working conditions at its factories. the factory.
The results could also help make Mr. Musk the world’s richest man, worth more than $200 billion.
Addressing shareholders after the vote, he pledged his loyalty to Tesla. The pay package, he said, “isn’t cash, and I can’t cut and open it, nor do I want to.”
Tesla shares rose on Thursday before the official announcement of the results after Mr. Musk said in X that he plans to pay over a wide margin.
Tesla’s board has requested a vote in response to a decision by Chancellor Kathaleen St. J. McCormick of the Court of Chancery in Delaware, where Tesla is registered as a company. In January, Chancellor McCormick agreed with a group of disenchanted Tesla shareholders who were fighting in a lawsuit that the 2018 pay package was too wild.
The board hopes that shareholder approval for the second time will help resolve Chancellor McCormick’s findings that the 2018 vote on the pay package was tainted because board members failed to disclose conflicts of interest stemming from personal and financial ties to Mr. Musk.
“The legal battle over the compensation plan is far from over, but we think the vote strongly strengthens Tesla’s case,” Garrett Nelson, a stock analyst with CFRA Research, said in a research note on Friday.
But some legal experts questioned whether a yes vote would cause Chancellor McCormick to reverse his decision, and Tesla has acknowledged that the vote does not necessarily resolve the case.
With the 2018 pay award, Mr. Musk owns 20.5 percent of Tesla, and only 13 percent without.
Shareholders also approved a proposal to move Tesla’s corporate registration to Texas, reacting to what Mr. Musk and the board consider to be unfair treatment by a Delaware court. The move will have no effect on the Delaware case.
He rejected a measure proposed by shareholders asking Tesla not to interfere with workers trying to organize a union, and to negotiate in good faith if they do. Mr. Musk has often expressed hostility toward organized labor. In Sweden, Tesla refused to negotiate with the mechanics who work for the company and have been on strike for almost six months.
Tesla did not immediately disclose vote totals for the proposal.
The compensation vote pitted those who consider Mr. Musk as a genius who has revolutionized the car industry against those who were antagonized by polarizing statements on the X and recent slumps in Tesla sales and earnings.
Robyn Denholm, chairman of Tesla’s board, said that investors are getting rich because of Mr. Musk’s leadership, and that the company is obliged to deliver what it promised.
“Elon is not only a visionary, but a CEO with a proven ability to carry out our mission and achieve incredibly ambitious business results that have generated extraordinary value for you,” he said in a letter to shareholders ahead of the vote.
But other shareholders have been dismayed by the recent decline in Tesla sales and profit and by Mr. Musk’s polarizing statements on X, where he has endorsed some right-wing conspiracy theories and offended a large number of buyers.
Several large institutional investors voted against the pay package, including Bank Norges Investment Management, which manages Norway’s oil wealth and is the country’s largest sovereign wealth fund. Also opposed is the California Public Employees Retirement System, or CalPERS, the largest pension fund in the United States.
Tesla shares are down more than 25 percent this year, even as the broader stock market is up 14 percent. At its peak stock price in 2021, Tesla’s stock market value is around $1.2 trillion, putting it in the middle of tech giants like Microsoft, Apple and Google. Its value has since fallen to about $580 billion.
The package gives Mr. Musk stock options worth tens of billions of dollars if he achieves the revenue or profit benchmarks he demands and increases the company’s stock value to $650 billion.
Most of these targets were considered unattainable when the plan was approved in 2018. Tesla struggled to produce the first moderately priced car, the Model 3 sedan. Soon, Tesla’s business stopped, and according to the plan, the market value remained above the target of $650 billion for a long time for Mr. Musk to collect these options.
To survive a legal challenge, the salary measure would require the approval of a majority of voting shares not including those held by Mr. Musk or his brother, Kimbal Musk.