Longtime billionaire investor Ron Baron Tesla bull and shareholder, has written an open letter in support of CEO Elon Musk’s controversial $56 billion pay package.
The chairman and CEO of Baron Capital said Musk’s 2018 compensation contract included “aggressive” performance targets that few believed could be achieved. According to him, Musk would not have earned anything if these ambitious goals had not been achieved.
“Elon is the ultimate ‘key man’ in terms of risk,” Baron said in the letter. “Without his tireless drive and uncompromising standards, there would be no Tesla. Especially when you consider how he slept on the floor of Tesla’s Fremont plant while the company was going through what he called “manufacturing hell!”
Ron Baron, founder of Baron Capital
Anjali Sundaram | CNBC
The salary package proposed by Tesla’s board of directors has faced repeated criticism, including criticism that the board is too closely tied to Musk to be fully independent. The package does not include salary or cash bonuses, and the compensation is based on the assumption that Tesla’s market value will increase to $650 billion within 10 years, starting in 2018.
If passed, it would be the largest CEO compensation package in corporate America. Tesla’s shareholder meeting is scheduled for June 13.
“I’m voting for the pay package,” Baron said Wednesday on CNBC’s “Squawk Box.”
In January, Judge Kathleen McCormick of the Delaware Chancery Court vacated the original salary package. Musk then tried to move Tesla’s state of registration from Delaware to Texas.
Baron previously said his firm has made about 20 times its investment in Tesla since he first bought shares in 2014. Tesla is the largest holding in Baron’s oldest and largest fund, Baron Partners Fund (BPTIX), accounting for nearly 30% of Tesla shares. portfolio.
“At Baron Capital, our answer is clear, loud and unequivocal: Tesla is better with Elon. Tesla is Elon,” he said in an email.