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Investor's Corner

Tesla billionaire investor Ron Baron supports ratification of Musk’s 2018 pay package

Credit: Tesla Asia/X

Published

9 months ago

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Legendary investor Ron Baron has noted that he would be voting in favor of the ratification of Elon Musk’s 2018 CEO Performance Award. Baron’s rationale behind his vote was highlighted in an open letter and discussed in a segment on CNBC’s Squawk Box. 

In his open letter, Baron noted that Musk’s 2018 compensation package included aggressive performance metrics that — at the time when the CEO Performance Award was approved — few believed were possible. Baron highlighted that had Musk not met his very aggressive performance goals, he would have received nothing from the electric vehicle maker. 

However, since he achieved his performance goals as Tesla’s CEO, shareholders should honor Musk’s pay package. He also noted that he believes Tesla has the potential to grow even more in the years to come. “When the contract was signed, the company’s market value was $53 billion. It got as high as a trillion, and it’s now $550 billion. I think in the next ten years, we’ll make 4-5 times our money again in Tesla,” Baron noted. 

Following is Baron’s open letter in support of Musk’s 2018 compensation plan. 

Baron Capital supports Elon Musk’s 2018 compensation contract for the following reasons:

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In 2018, 73% of Tesla’s disinterested shareholders voted in support of Elon’s compensation contract. The will of those owners of the company should be honored. The contractual agreement between the company and Elon should be honored. The voice of shareholders and legally binding contracts should not be permitted to be undone by a shareholder for hire and his strike suit lawyers. The plaintiff shareholder in question owned nine (9) Tesla shares, and the lawyers who represented him have requested they be awarded $5.6 billion in fees! Further, the plaintiff’s lawyers requested their fees be paid in Tesla shares…after its stock price has been depressed by this controversy! Does anyone honestly believe the motivation of the plaintiff and his lawyers was to serve the best interests of Tesla and its shareholders?

Elon’s compensation contract contained aggressive performance metrics that few in 2018 believed could be achieved. If these aggressive performance metrics had not been achieved, Elon would have received nothing. When Tesla achieved targeted earnings, revenues, and market cap metrics, Tesla’s shareholders benefitted greatly. Tesla’s market cap when Elon’s pay package was approved on March 21, 2018 was $53.5 billion. It is approximately $550.75 billion today, after having reached a high watermark of $1.24 trillion in November of 2021. He performed under his compensation contract. He earned his pay.

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

If shareholders want to protect and grow their investment, they must AGAIN approve his compensation contract.

Shareholders should ask themselves this question: is Tesla better off with or without Elon…whom we believe is the reason 6 million people applied for 12,000 jobs last year to work with this extraordinary individual. Because that is what is at stake. At Baron Capital, our answer is clear, loud, and unequivocal: Tesla is better with Elon.

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Tesla is Elon.

Ron

June 4, 2024

Ron Baron’s full open letter in support of Elon Musk’s 2018 CEO Performance Award can be fully viewed below. 

Baron Capital Tesla Elon Musk Compensation 6.5.2024 by Simon Alvarez on Scribd

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Investor's Corner

Tesla stock surges on Wednesday, but there’s still more room to go

Published

3 days ago

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March 12, 2025

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Credit: Tesla

Tesla stock (NASDAQ: TSLA) surged over 7 percent on Wednesday, canceling out some of the losses it has felt this week.

It has been a less-than-ideal start for Tesla in 2025, as the company has wiped out all of its gains felt from the victorious election campaign of President Donald Trump. The stock is down 34 percent so far this year.

The losses have mostly been felt due to reports of decreased demand due to pushback against CEO Elon Musk and his support of President Trump, as well as investor concern over the CEO’s personal use of time between the Department of Government Efficiency (DOGE) and Tesla itself.

In a note this week from Wedbush, analyst Dan Ives wrote:

“Musk needs to step up as Tesla CEO at this critical juncture. In a nutshell, the word ‘balance’ has been missing with Elon Musk and his ability to run Tesla as CEO….while instead focusing all of his energy and time driving his DOGE initiative within the Trump Administration. Since Trump’s White House 2nd term kicked off in January, we have seen Musk and Trump connected at the hip with Musk essentially living at the White House and Mar-a-Lago in Palm Beach. There has been little to no sign of Musk at any Tesla factory or manufacturing facility the last two months and perception has become reality for Tesla shares. Trump getting elected President was a huge moment for Musk and Tesla in our view as this will create the fast track for an autonomous federal roadmap…however the DOGE efforts have now intertwined Tesla into this brewing political firestorm.”

Wednesday’s slight bump for Tesla shares is likely related to the support the company received from President Trump yesterday, who purchased a Model S sedan at the White House and pledged to pay for it with a check.

President Donald Trump buys a Tesla at the White House – Here’s which model he chose

The move was one that signaled a buying spree from high-profile Republicans, including Sean Hannity, among others, who announced their support for Musk and Tesla:

Tesla shares closed at $248.09 on Wednesday, up 7.59%.

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Investor's Corner

Tesla bull ARK loads up on over $20M in TSLA shares after stock slide

Published

5 days ago

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March 11, 2025

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(Credit: Tesla)

Tesla bull ARK Invest loaded up on over $20 million worth of the automaker’s shares on Monday after the company saw its largest slide on the market since late 2020.

Shares dropped over 15 percent on Monday, mostly due to pushback on the stock as CEO Elon Musk heads the Department of Government Efficiency (DOGE). His involvement with the U.S. government directly has sent some investors into a predicament over Musk’s dedication to Tesla.

There are also concerns regarding Q1 deliveries, which will be a big indication of where the year could be headed for Tesla.

The Monday slide was the biggest since late 2020 when shares dropped over 21 percent.

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However, the slide presents a massive buying opportunity for investors, especially those who operate ETFs, like ARK. Long term, ARK believes Tesla shares (NASDAQ: TSLA) will be exponentially more expensive, especially leaning on the thesis that Robotaxi and AI/Optimus will translate to major growth in yet another sector for the company.

ARK bolstered its position on $TSLA in its ARKK Innovation ETF with a purchase of 68,164 shares. Tesla is the largest holding in ARKK with over $531 million in value. Tesla makes up exactly 10 percent of the ARKK ETF.

It also bought another 11,154 shares in its ARKQ Autonomous Technology & Robotics ETF.

It’s no secret Tesla shares have taken a substantial hit in 2025, especially as the company’s price on Wall Street exploded following President Trump’s successful election campaign last year.

So far in 2025, Tesla shares are down over 38 percent. They are up nearly 5 percent as of 2:30 p.m. on the East Coast. Even bullish analysts are hoping some focus returns to Tesla on Musk’s part.

Dan Ives of Wedbush said in a note last night following the broad sell off:

“This is a gut check moment for the Tesla bulls (including ourselves) after this massive sell-off in Tesla shares with fears mounting/accelerating. The bears own the Tesla narrative in the near-term as lackluster sales numbers from Europe, China, and the US in January/February along with Musk protests/brand worries have created many concerns.”

He continued:

“While the DOGE/Trump Musk iron clad partnership has created major brand worries for Tesla…..we estimate less than 5% of Tesla sales globally are at risk from these issues despite the global draconian narrative for Musk. Importantly, we expect Musk will better balance his time between DOGE and Tesla/SpaceX over the course of 2025 and some of these distraction issues will fade.”

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Investor's Corner

Elon Musk praises Ray Dalio’s Bridgewater for accumulating TSLA stock

Published

4 weeks ago

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February 14, 2025

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Credit: Tesla Asia/X

A recent 13-F filing from legendary investor and billionaire Ray Dalio’s Bridgewater Associates has revealed that the hedge fund has added over $62 million worth of Tesla stock (NASDAQ:TSLA) to its portfolio.

Elon Musk has praised the billionaire’s investment in a post on X.

Bridgewater’s TSLA stake:

  • As per Bridgewater’s 13-F filing, it currently holds 153,589 shares of TSLA, which costs $62,025,382.
  • The firm added the TSLA shares in the fourth quarter.
  • Tesla shares gained momentum after its Q3 2024 earnings call, and it only gained more strength after the election of U.S. President Donald Trump.
  • At the end of 2024, Tesla shares were up 62%, as noted in a MarketWatch report.
  • Tesla stock is still up 88% over 12 months despite a steep drop over the past month.

A vote of confidence: 

  • Bridgewater Associates is one of the largest hedge funds in the world, so the firm’s stake in TSLA could be interpreted as a vote of confidence in the electric vehicle maker.
  • Elon Musk has praised the firm’s investment. In a post on X, Musk noted that Bridgewater’s investment was a “smart move.”
  • Elon Musk has been quite consistent on his idea that Tesla could eventually become the world’s most valuable company. He emphasized this point during the Q4 2024 earnings call.
  • “I see a path. I’m not saying it’s an easy path but I see a path of Tesla being the most valuable company in the world by far. Not even close. There is a path where Tesla is worth more than the next top five companies combined,” Musk said.

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

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