Investor Ron Baron Supports Elon Musk's $56 Billion Pay Plan at Tesla

Prominent investor Ron Baron has given his backing to Tesla CEO Elon Musk's proposed $56 billion pay package, which is set for a vote by shareholders next week. This means Baron is in favor of Musk getting a lot of money as part of his job deal.

Why it's important:

Musk's big payday, which was agreed upon in 2018 but got canceled by a judge earlier this year, is causing a lot of discussion. Musk and Tesla's board say that this money, mostly given in the form of company shares if Tesla meets certain goals, is a way to make sure Musk keeps working hard to grow Tesla.

However, some people who own Tesla's shares think this is too much money for Musk. Two companies that advise shareholders, ISS and Glass Lewis, have told them to say no to the plan as it is now.

Key idea:

"Elon is like the main person at Tesla. Without him working hard and having high standards, Tesla wouldn't be what it is," said Baron.

Background:

Musk doesn't take a regular salary; instead, he gets paid with shares in the company, as seen in Tesla's official documents.

Some people support the big payday Musk was promised in 2018. They say it's fair because Musk has helped Tesla become the most valuable car company in the world, worth more than ten times as much as General Motors.

But Tesla is facing some problems. Fewer people are buying electric cars because the interest rates are high, and there are more companies making electric cars now. Tesla recently laid off more than 10% of its workers and lowered the prices of some cars to deal with this.

What's next:

Shareholders of Tesla will decide whether to agree to Musk's pay plan during their yearly meeting on June 13th.

Also Read: Tesla Investor Sues Elon Musk Over $7.5 Billion Stock Sale