Tesla shareholders approved CEO Elon Musk's US$56 billion pay package that was thrown out by a Delaware judge earlier this year.

The favorable vote doesn’t necessarily mean that Musk will get the all-stock compensation anytime soon.

The 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.

The electric car maker's stock remains richly valued even after several years of weakness in shares.

Shareholders at Tesla's annual general meeting on Thursday re-approved Musk's 2018 record-setting compensation that backers said was necessary to keep the billionaire focused on the car company.

Musk had raised doubts about his future with Tesla this year, writing on X, the social media platform he owns, that he wanted a 25 percent stake in the company in order to stop him from taking his artificial intelligence development projects elsewhere. The higher stake was needed to control the use of AI, he has said.

Tesla's stock rose nearly three percent on Thursday ahead of the meeting after Musk posted on X that he had won shareholder approval.

Even after Thursday's gains, Tesla's shares have tumbled 27 percent this year, and its market value has been more than halved to US$582 billion from its November 2021 high as Tesla faces fierce competition in China from BYD and other EV makers selling less-expensive cars.

Tesla's shares received a badly needed boost after Musk said on April 23 that Tesla would release more affordable new models in 2025.

Its quarterly revenue fell for the first time since 2020, when the pandemic hampered production and deliveries. (Agencies)