In an open letter, Baron Capital’s founder and CEO, Ron Baron, has voiced his support for Elon Musk’s $56 billion pay package. Baron Capital has been a long-time investor in Tesla, with the company being the largest holding in the Baron Partners Fund. According to Baron, without Musk at the helm of Tesla, there would be “no Tesla.”
In his letter, Baron praised Musk’s relentless drive and uncompromising standards. He highlighted Musk’s role as the key figure in the company’s success. Baron believes that Musk has earned his compensation by meeting the aggressive performance metrics outlined in the agreement.
However, proxy advisors Institutional Shareholder Services and Glass Lewis have recommended that shareholders reject the plan citing concerns over excessive compensation. Despite this opposition from proxy advisors, Baron is confident in his decision to support Musk’s pay package.
In response to criticisms from Glass Lewis, Tesla has made efforts to win over shareholders by offering tours of their gigafactory in Austin led by Elon 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 stating that Musk’s close relationship with some Tesla board members could compromise their independence.
Despite these challenges, Baron’s support for Musk’s pay package is a reassuring sign for both him and the Tesla board. As a central figure in Tesla’s success, without a salary from Tesla, Elon Musk continues to drive innovation and lead one of America’s most innovative companies forward.
