Tesla Investor Ron Baron Backs Musk's $56 Bln Pay Plan

Reuters06-05

June 5 - Prominent investor Ron Baron has come out in support of Tesla CEO Elon Musk's $56 billion pay package, which is up for a shareholder vote next week, according to an open letter from the Baron Capital founder on Tuesday.

WHY IT'S IMPORTANT

Musk's enormous pay, approved in 2018 but voided by a Delaware judge earlier this year, remains contentious.

Musk and the Tesla board have argued that the compensation, primarily in stock awards tied to Tesla achieving specific milestones, ties executive incentives to growth at Tesla.

However, some shareholders view the package as excessive. Proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis have urged shareholders to vote against it in its current form.

KEY QUOTE

"Elon is the ultimate ‘key man’ of key man risk," Baron said. "Without his relentless drive and uncompromising standards, there would be no Tesla."

CONTEXT

The billionaire does not take a salary and is compensated through stock awards, Tesla filings show.

Some shareholders have argued for the 2018 award, the largest for a CEO in corporate America, citing Musk's track record of making Tesla the world's most-valuable car company with a market cap over 10 times that of General Motors .

However, the car maker faces pressure as EV sales have slowed down due to high interest rates and heightened competition. It recently cut over 10% of its workforce and has lowered prices for some of its cars.

WHAT'S NEXT

Tesla shareholders will vote on Musk's pay at their annual meeting scheduled on June 13.

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Comments

  • robiansyah
    06-06
    robiansyah
    Great article, would you like to share it?
  • romanc9
    06-06
    romanc9
    If shareholders were to vote against his pay package, Tesla will crash. So what is left for you all shareholders, share value goes south. Who will be worst? Elon already has his wealth to sustain but alot of small shareholders will lost their hard earn saving buying Tesla shares. I am very sure no one is in a better position to stirr Tesla forward other than Elon. Is already showing the weakness while all these shit going on to stop his abilities to move things. So good luck to all shareholders vote against. Remember that the person to stop Elon from the package only hold a few Tesla shares.. Don't be stupid to listen to a minon shareholder. Look at the bigger pictures. All Elon done for the passed years that bought tesla what it is today. 
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