11:13 AM EDT, 06/05/2024 (MT Newswires) -- Tesla (TSLA) Chief Executive Elon Musk has secured the backing of a long-time investor in the electric vehicle company, with the head of Baron Capital urging other Tesla shareholders this week to support Musk's lucrative compensation package, contending, "He earned his pay."

The Tesla board of directors in 2018 approved a compensation package for Musk now valued at around $56 billion. A lawsuit filed in Delaware chancellery court later succeeded in throwing out the all-stock award as excessive, but Tesla shareholders are now slated to vote on a renewed version of the pay package at the company's annual meeting on June 13.

In an open letter to other Tesla shareholders dated June 4, Ron Baron, the CEO of Baron Capital, argued Musk is uniquely qualified for the stock award after guiding the company through a 10-fold increase in its market value over the past six years, rising to more than $550 billion from around $53.5 billion in 2018.

Baron also questioned whether the shareholder lawsuit opposing Musk's pay had the company's best interests in mind, noting the plaintiff owned only nine Tesla shares while lawyers in the case are seeking $5.6 billion in fees. "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," Baron wrote.

Price: 174.39, Change: -0.38, Percent Change: -0.22