Tesla CEO Elon Musk's $56 billion pay package approved, but there is a catch

Tesla CEO Elon Musk's contentious $56 billion compensation package has been approved. Despite resistance from certain major shareholders and proxy firms, the electric vehicle (EV) manufacturer's shareholders voted in favor.

The announcement was delivered at Tesla's annual shareholder meeting in Austin, Texas, and expressed strong support for Musk's leadership while encouraging him to focus on his core source of income.

However, shareholder approval does not guarantee Musk the highest remuneration in US business history.

The approval does not settle the ongoing litigation about the pay package in Delaware Court. Which some legal experts believe could last for months. According to media reports, the judge in January rejected the pay package, calling it "unbelievable".

According to experts, Musk may also face new lawsuits over the package. In the report, Boston College Law School professor Brian Quinn is quoted as saying, "The issue is not yet settled." He said that the Delaware judge will closely examine the vote. And Tesla will have to demonstrate that the process was neither intimidated nor improperly influenced by Musk.

The judge criticized Tesla's board, saying that it is "subservient" to Musk. Saying that the plan was proposed by a board that had close personal and financial ties with the top executive. Which led to a conflict of interest.

Elon Musk also received 303 million options to purchase Tesla shares at a discount to their market value at the time of the grant as part of his incentive package.

valued at $51 billion at first. This is the possible profit Musk could earn in the event that Tesla's stock price increases significantly. Since then, a decline in the price of Tesla's shares has caused the package's estimated worth to plummet to $48.3 billion.

Since the company's brief ascent to a $10 trillion valuation in late 2021, Tesla's shares have dropped by more than 50%.