Key Tesla shareholder Ron Baron issued an open letter calling on other investors to back Elon Musk’s record $56 billion pay package.
On Wednesday, Mr. Baron argued that Tesla would not be nearly as successful without Mr. Musk and that the shareholders should vote to approve the CEO’s 2018 pay package.
“Without his relentless drive and uncompromising standards, there would be no Tesla,” Mr. Baron wrote. “Especially considering how he slept on the floor of Tesla’s Fremont [California] factory when the company was going through what he called ‘production hell!’”
Mr. Baron pointed out that while Tesla has experienced some economic turmoil in recent months, the company’s market cap stands miles above where it was when Mr. Musk’s pay package was accepted in 2018.
Indeed, in the years since the package was approved, Tesla has rolled out blockbuster technology that has captured the attention of consumers and made it the most important electric vehicle company in the U.S.
Mr. Baron’s support for Mr. Musk’s pay package in the upcoming vote could prove essential. Mr. Baron holds 4.5 million Tesla shares, valued at around $1.2 billion. He also leads Baron Holdings, which owns a substantial stake in the EV company.
Still, his support doesn’t guarantee a successful result for Mr. Musk, who has urged shareholders to approve the pay package ahead of the June 13 shareholder meeting. Several prominent shareholder proxies have come out against the package, claiming the $56 deal is excessive.
On top of economic concerns, some Tesla shareholders may not be excited to hand Mr. Musk a victory. Since he took over Twitter in late 2022, some shareholders have claimed that he has been distracted by other business ventures and has neglected Tesla. Mr. Musk runs Tesla, SpaceX, X and Neuralink.
According to terms of the Musk pay deal, Tesla had to reach certain goals before he could cash out on the record $56 million package. While Tesla did meet those goals, some shareholders disagreed with the terms and sued to block it. A Delaware judge agreed with the shareholders in January and blocked the package, ruling that Mr. Musk had too much control over Tesla’s board of directors.