Tesla CEO Elon Musk $56 Billion Pay Package Gets Support From Billionaire Investor Ron Baron

By Jace Dela Cruz

Jun 06, 2024 05:17 AM EDT

Billionaire investor Ron Baron, a major Tesla shareholder, has backed Elon Musk's $56 billion pay package, which will be up for a shareholder vote next week.

Milken Institute's Global Conference Held In Beverly Hills
BEVERLY HILLS, CALIFORNIA - MAY 6: Elon Musk, co-founder of Tesla and SpaceX and owner of X Holdings Corp., speaks at the Milken Institute's Global Conference at the Beverly Hilton Hotel,on May 6, 2024 in Beverly Hills, California.
(Photo : Apu Gomes/Getty Images)

Elon Musk's Tesla $56 Billion Pay Package 

According to Reuters, the compensation package was approved in 2018 but eventually voided by a Delaware judge earlier this year. Elon Musk and the Tesla board defend the package primarily through stock awards linked to Tesla's specific milestones, arguing it aligns executive incentives with company growth.

However, the pay package has not been without its share of controversy. Some shareholders, including proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis, have deemed the pay excessive, suggesting that it be rejected in its current form.

READ NEXT: Tesla Defends Musk's $56 Billion Pay Package Following 'Excessive' Remarks from Shareholders

Ron Baron Defends Pay Package of Elon Musk

In an open letter on Tuesday, Ron Baron emphasized Elon Musk's vital role in Tesla's success. The Baron Capital founder attributed the company's achievements to the Tesla CEO's relentless drive and high standards.

"Elon is the ultimate 'key man' of key man risk... Without his relentless drive and uncompromising standards, there would be no Tesla," Baron noted. "Especially considering how he slept on the floor of Tesla's Fremont factory when the company was going through what he called 'production hell!'" 

According to Tesla filings, Musk does not receive a salary and is only compensated through stock awards. The fate of Musk's pay package, a decision that could significantly impact Tesla's future, will be determined at the highly anticipated Tesla annual meeting on June 13. 

READ MORE: Elon Musk's Potential 'Business Transaction' With Tesla Director Raises Concerns on Independence of Board's 'Special Committee'

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