Billionaire Tesla shareholder Ron Baron says he supports Elon Musk's $56 billion pay package

Ron Baron once told Elon Musk to stop tweeting.
Baron Capital CEO Ron Baron and Tesla CEO Elon Musk.Associated Press via Business Wire
  • Ron Baron, a billionaire Tesla shareholder, has backed Elon Musk's $56 billion pay package.

  • In an open letter, the investor said that without Musk, there would be "no Tesla."

  • Tesla is fighting to win over shareholders and ratify Musk's 2018 compensation plan.

Ron Baron, a billionaire Tesla shareholder, has backed Elon Musk's $56 billion pay package ahead of a crucial shareholder vote.

In an open letter, the CEO of Baron Capital praised Musk as having "relentless drive and uncompromising standards." Tesla is battling to win over shareholders and ratify Musk's 2018 compensation deal after it was struck down by a Delaware court.


Baron said that Musk had met the "aggressive" performance metrics in the original compensation deal and had "earned his pay."

Baron Capital has owned Tesla stock since 2014, and Tesla is the largest holding in the Baron Partners Fund.

"Elon is the ultimate 'key man' of key man risk. Without his relentless drive and uncompromising standards, there would be no Tesla," Baron wrote in his open letter.

"Especially considering how he slept on the floor of Tesla's Fremont factory when the company was going through what he called 'production hell!'" Baron added, referring to Tesla's production ramp-ups.

Baron's endorsement may come as a relief to Musk and the Tesla board, which has faced what Tesla's chair, Robyn Denholm, previously described as a "huge hill to climb" in winning over shareholders.

The proxy advisories Institutional Shareholder Services and Glass Lewis have both recommended shareholders reject Musk's pay deal in the June 13 vote.

Tesla forcefully rejected Glass Lewis' comments, and the company has pulled out all the stops to get shareholders to vote, even offering Tesla investors a Musk-led tour of the company's gigafactory in Austin.

The 2018 compensation plan gave Musk, who does not receive a salary from Tesla, a series of stock options that would vest when Tesla hit certain targets.

In January, a Delaware judge sided with a Tesla shareholder who had argued the pay plan was excessive, ruling that Musk was too close to some Tesla board members for them to act independently.

Musk and Tesla did not immediately respond to a request for comment made outside normal working hours.

Read the original article on Business Insider