Tesla shareholders voted today to reapprove Elon Musk’s massive pay package after a Delaware court judge had voided it earlier this year. Alongside this, investors backed the move to relocate the company’s legal headquarters from Delaware to Texas and confirmed the reappointment of board members James Murdoch and Kimbal Musk, Elon’s brother.

This vote is seen as a major referendum on Musk’s leadership during a challenging period for Tesla. The company has faced significant hurdles, including a declining stock price driven by shrinking sales, reduced demand, and lower revenue. Amid these issues, Tesla has cut at least 10 percent of its workforce, and its vehicle lineup, in dire need of updates, reflects its struggle to maintain innovation. Moreover, the success of Musk’s ventures into AI and robotics remains uncertain.

Despite these challenges, Tesla shareholders handed Musk a significant victory by approving a compensation package that would place him among the highest-paid CEOs in modern history.

“I just want to start off by saying, hot damn, I love you guys,” Musk exclaimed, arms raised in triumph as he addressed the shareholders.

The outcome, though significant, was somewhat expected. Shareholders were eager to reward Musk for transforming Tesla into the world’s most valuable car company, creating immense wealth for them in the process. They also wanted to counter those who have questioned his leadership, especially as his focus has shifted to other ventures like the company formerly known as Twitter.

Tesla has a notably high proportion of retail investors, or mom-and-pop investors, compared to large institutional investors. While several top proxy advisory firms recommended voting against the proposal, Tesla’s retail shareholders clearly had a different opinion.

Even recent negative headlines, including allegations of sexual misconduct by Musk at SpaceX and a sexual harassment lawsuit from former employees, didn’t sway the vote’s outcome. Nor did Musk’s political shift to the right and endorsement of conspiracy theories on X. Many investors were unwilling to risk the potential decline in share value if the pay package was rejected.

However, Musk can’t simply walk away with the money just yet. The Delaware court’s ruling that invalidated his pay package, citing Musk’s undue influence over its formation, still stands. Today’s vote was part of Tesla’s strategy to address the procedural flaws identified back in 2018.

“It is not automatically reinstated if the shareholders approve it,” explained Samantha Crispin, a partner at Texas-based law firm Baker Botts and chair of the corporate department. “I would imagine it would be influential [and] it certainly would be something that the judge would take into consideration.”

Tesla hopes this reapproval will support its efforts to overturn Delaware Chancery Court Judge Kathaleen St. Jude McCormick’s ruling, potentially leading to an appeal to the state’s Supreme Court. However, the final outcome remains uncertain, as Tesla acknowledged in its proxy statement that it “cannot predict with certainty how a vote to ratify Musk’s compensation would be treated under Delaware law in these novel circumstances.”

This vote might also help keep Musk’s focus on Tesla, including its AI and robotics projects. Earlier this year, Musk threatened to spin off Tesla’s AI work into a separate company if he didn’t secure 25 percent control of Tesla’s stock. He sold approximately $38 billion worth of Tesla stock between 2021 and 2022 to finance his acquisition of Twitter and now oversees six other companies. With today’s vote, Musk’s stake in Tesla could potentially rise to 20 percent from about 13 percent.

In the lead-up to the vote, Tesla used both incentives and warnings to rally support. The company offered an exclusive tour of the Austin factory led by Musk as a prize for select investors and issued a warning that failing to approve the pay package could prompt Musk to leave Tesla.

With shareholders reaffirming his status as one of the highest-compensated individuals globally, the likelihood of Musk departing from Tesla seems significantly reduced. However, the saga surrounding his pay package is far from over.