In just two weeks, Tesla shareholders will vote on Elon Musk’s multi-billion dollar CEO compensation plan proposed by the board of directors a few weeks ago.
Some major Tesla shareholders have now expressed their support for the plan, which bodes well for the final vote.
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Baillie Gifford & Co. and T. Rowe Price Group Inc., two investment groups who own about 14 percent of Tesla stock, told Bloomberg that plan to vote their shares in favor of the incentive package.
After Musk himself, who will not be voting on the matter, they are some of the biggest Tesla shareholders and therefore, they can make a difference in the vote.
Tom Slater, a Baillie Gifford partner and fund manager, said:
“We think what Tesla has achieved so far is pretty remarkable, but there’s more they can do in not just automotive, but the energy markets. Elon Musk — his drive and his vision — has been a really important part of getting us to this point. Tesla still needs that drive and that vision to push the business.”
As previously reported, the package would incentivize Musk to stay CEO or Chief Product Architect for at least the next 10 years.
Joel Grant, an automotive and industrial analyst at T. Rowe Price, also commented on the firm’s intention to vote for the package:
“The package was designed to retain him, and we are on board with the intention. We want to make sure that Elon stays and uses Tesla as a vehicle for a lot of growth.”
Ron Baron, another major Tesla investor, is also reportedly in favor of the plan:
“Think about Elon Musk and what he’s had to overcome to achieve what he has achieved. The OEMs are against him, the dealers are against him, the unions are against him. Everyone is aligned against him. The only reason why Tesla is successful is because of this guy,”
Among the big Tesla investors, Fidelity and Tencent are the only ones that haven’t commented on the CEO compensation plan yet.
The vote will happen on March 21.
It looks like the plan will pass without any issue, which is not exactly surprising considering the amount of value it would create for shareholders if successful.
The plan attracted some criticism, mostly from non-shareholder, for giving Musk even more control over the company, but that control is dependent on him helping push Tesla to become one of the most valuable companies in the world based on market cap.
You can’t expect shareholders not to vote for something like that even if it’s just a possibility.