I believe normally shareholders don't have an explicit say in a CEO comp package; this situation arose because a Delaware judge nullified his 2018 comp package because it was rigged. Depending on how you look at it, it's not a direct transfer of wealth from shareholders to Elon. It's absolutely dilution, so to answer your final question.
Shareholders have done extremely well under Elon's tenure. Although a lot of us here feel he's made tons of mistakes these past several years and the outlook is far from rosy, other shareholders could have a different opinion on perhaps 3 issues. One, they may still have the utmost confidence in him (based on long term stock performance) and feel there's upside in the stock. Two, TSLA has arguably been a hype stock for a long time; if he leaves, the shares could plummet. And finally, and this is a smaller point, this comp package goes back to 2018. Although almost nobody believes he deserves $46B for the work he's done, the stock is still up significantly since 2018. Many investors, whether they like Elon or not, probably think he should receive some compensation that reflects the stock performance over time and its future prospects.