In a recent open letter, Ron Baron, a Tesla shareholder, voiced his support for Elon Musk’s $56 billion pay package. Baron Capital, which has been investing in Tesla for many years and currently holds the company as its largest investment in the Baron Partners Fund, praised Musk’s unwavering drive and unyielding standards. According to Baron, without Musk, there would be no Tesla.
The endorsement of Musk’s compensation plan comes at a crucial juncture as Tesla prepares for a shareholder vote to ratify the deal. Institutional Shareholder Services and Glass Lewis have both advised against the agreement, citing concerns over excessive compensation. However, Baron believes that Musk has earned his pay by meeting the aggressive performance targets outlined in the agreement.
In response to criticism from Glass Lewis, Tesla organized tours of its gigafactory in Austin led by Musk himself. The 2018 compensation plan granted Musk stock options that would vest upon achieving certain targets. A Delaware court previously ruled against the plan due to concerns about Musk’s close relationship with some Tesla board members compromising their independence.
Despite these challenges, Baron’s support for Musk’s pay package serves as an encouraging sign for both Musk and the Tesla board. Despite not receiving a salary from Tesla, he remains central to the company’s success. Neither Musk nor Tesla has responded to requests for comment on the matter yet.
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