The Tesla shareholder vote on Musk's pay package will not settle the ongoing legal disputes.

• On Thursday, Tesla shareholders will decide if CEO Elon Musk deserves the 2018 historic pay package.
• In January, a Delaware judge rescinded the plan, and regardless of the vote outcome, the matter will have to be resolved in the courts.
• According to Ann Lipton, a corporate trial attorney and professor at Tulane Law School, some individuals mistakenly think that a vote in favor will resolve legal conflicts.

The annual meeting in Austin, Texas, on Thursday will include a final vote on a controversial proposal to approve the 100% performance-based stock option award to Elon Musk, which was granted in 2018.

Despite investor support, the courts will ultimately decide on the measure's outcome.

The Tesla CEO's compensation package, worth approximately $56 billion in performance-based stock options, is being considered by shareholders due to a Delaware court's January order to rescind it.

Tesla's board members were found to lack independence from Musk, fail to negotiate with him at arm's length, and not provide shareholders with a complete picture before asking them to vote on his 2018 pay plan, according to Judge Kathaleen McCormick.

Tulane Law School professor Ann Lipton, a former corporate and securities law trial attorney, stated that shareholders lack the ability to reverse the judge's decision.

"According to Lipton, some individuals mistakenly think that a vote in favor will resolve legal conflicts. However, this is incorrect as it will only make the disputes more complex."

A vote to reinstate the pay plan would be a public relations victory for Musk, who is facing numerous challenges at Tesla and beyond, including a sales decline due to an aging product line, increased competition, especially in China, and brand deterioration attributed in part to Musk's "antics" and "political rants."

The pay plan has been opposed by large institutional investors such as CalPERS, CalSTRS, Norway's Sovereign Wealth Fund, and SOC Investment Group.

On Wednesday, Marcie Frost, CEO of CalPERS, stated that the compensation at Tesla is excessive when compared to executives at peer companies, highly dilutive to shareholders, and not tied to the long-term profitability of Tesla.

Tesla stated in an April proxy filing that it has received feedback from several institutional shareholders who opposed the court's decision on Musk's pay package, and they plan to vote in favor of reinstating it.

According to Yale Law School professor Sarath Sanga, the proposal to approve Elon Musk's pay plan is an attempt by the company to rectify the "defective process" that was found by the court under the 204 statute of Delaware business law.

"Sanga stated that it is necessary to have an independent board negotiating with the CEO, followed by submitting all the necessary details for a vote. However, the court ruled against it, and it is likely that even a majority vote for ratification will be challenged and require further judicial review."

Sanga pointed out that a decisive shareholder vote in support of the pay plan could potentially influence a court's decision to grant Musk the options in the future.

On Wednesday, most Tesla shareholders had to submit their votes by the end of the day. On Thursday, those in attendance can vote in person or online.

Along with the vote on the pay package, Tesla shareholders will also determine whether the company should relocate its incorporation from Delaware, where many large publicly traded companies are located, to Texas, where Tesla's largest U.S. factory is situated.

McCormick's decision in the Delaware Chancery court prompted Musk to suggest that the company relocate.

Tesla has been asked by shareholders to conduct annual reporting on anti-harassment and discrimination efforts, but the company has urged investors to reject the proposal despite ongoing litigation and investigations over alleged discrimination.

Tesla's stock has fallen 29% this year, lagging behind the Nasdaq's 17% increase. Despite this, Musk is urging investors to focus on the company's future plans in AI software, robotaxis, and robotics.

"If someone doubts Tesla's ability to solve autonomy, they should not invest in the company, as Musk stated on the latest earnings call in April. He added, 'We will, and we are,' indicating Tesla's commitment to this goal."

For years, Musk has made similar declarations, but the company has not yet fulfilled its promise.

He still has friends and believers.

On Tuesday, Brad Gerstner, CEO of Altimeter Capital, stated on CNBC's "Half-Time Report" that he considers Tesla a pioneer in autonomous driving technology.

Gerstner, whose firm has a small position in Tesla, believes that Elon has done an extraordinary job and that his advantage in AI and full self-driving compared to other manufacturers is deeply under-appreciated.

Since 2016, Musk has been promising software that can transform Tesla vehicles into self-driving cars, but competitors such as Pony.ai, Didi, and Waymo have already developed robotaxis and are operating commercial services.

WATCH: Altimeter's Brad Gerstner