Tesla shareholders have approved CEO Elon Musk's record-breaking pay package in a show of approval for the billionaire's management. 

The vote is a victory for Mr Musk, who had campaigned fiercely for the payout, which is worth up to $US56 billion ($84 billion) — the exact amount depends on the Tesla share price, according to the BBC.

Shareholders also approved a proposal to move the company's legal home to Texas from Delaware, alongside three other approvals including the re-election of two board members: Mr Musk's brother, Kimbal Musk, and James Murdoch, son of media mogul Rupert Murdoch.

Onstage at the annual shareholder meeting on Thursday, local time, Mr Musk described himself as pathologically optimistic. "If I wasn't optimistic this wouldn't exist, this factory wouldn't exist," he said to applause.

Mr Musk had tipped off late on Wednesday that the proposals were garnering huge support and thanked shareholders.

A chart on his social media platform X showed the solutions were set to pass by wide margins.

The approval also underscores the support that Mr Musk enjoys from Tesla's retail investor base, many of whom are vocal fans of the mercurial billionaire. 

The proposal passed despite opposition from some large institutional investors and proxy firms.

The Tesla CEO could still face a long legal fight to convince a Delaware judge who invalidated the package in January, describing it as "unfathomable". 

He may also face fresh lawsuits on the package, which would be the largest in US corporate history.

Shareholder approval for the compensation serves as both an endorsement of his tenure and an acknowledgement that investors do not want to risk the company's future.

In January, he threatened to build AI and robotics products outside of Tesla if he failed to gain enough voting control, which essentially required the 2018 pay package to be approved.

He shifted the company's focus to robotaxis, shelving cheaper mass-market electric cars, to the concern of some investors who feared the autonomous technology will be hard to perfect.

Tesla's share price has dropped about 60 per cent from its 2021 peak as EV sales have slowed and Mr Musk's attention has wavered between Tesla and other companies he runs. 

The stock closed up 2.9 per cent on Thursday.

Senior researcher at Leverage Shares, which owns Tesla's stock, Sandeep Rao said the approval "vindicates Musk". 

The board had said that Mr Musk deserves the package because he hit all the ambitious targets on market value, revenue and profitability.

Large investors including the California Public Employees' Retirement System had called the pay package "excessive".

Amalgamated Bank voted against the pay proposal, citing concerns about lack of independence and corporate governance at Tesla.

"Elon Musk and Chair Denholm have made this about CEO loyalty and presented the votes as a decision about whether the company can keep Musk," the bank's chief sustainability officer Ivan Frishberg said. 

"That is a lot of pressure."

Tesla had been drumming up support for Mr Musk's pay package, especially from retail investors, who make up an unusually high percentage of its ownership base but who often do not vote.

Company executives have posted messages on X, saying Mr Musk is critical to Tesla's success. 

Tesla has run social media ads, and Mr Musk has promised a personal tour of Tesla's factory in Texas to some shareholders who cast votes.

While Mr Musk is undoubtedly Tesla's driving force, and is credited with much of its success, the company's sales and profit have slowed. 

There are concerns that he is spreading himself too thin.

Mr Musk has added two more companies to his roster since the pay package was approved in 2018.

He now runs or owns six firms, including rocket-builder SpaceX, social media giant X — formerly Twitter — and the artificial-intelligence firm xAI, which he created in 2023.