Atreides’ Gavin Baker Backs Elon Musk’s $1T Tesla Pay Deal Despite Broad Opposition

• Baker opined that Elon’s involvement is integral to maintaining Tesla’s current course and trajectory.
• Tesla proposed a new compensation package for Musk valued at about $1 trillion in September.
• Tesla shareholders must now approve the package, and the results of the shareholder vote will be announced at the company’s annual meeting of shareholders on November 6.
   

Atreides Management’s Gavin Baker said on Thursday that his Boston-based firm will be voting in favor of Elon Musk’s new pay package worth about $1 trillion, even as many others intend to vote against it.

“I believe shareholders should generally support thoughtfully structured performance-based CEO compensation packages because they incentivize CEOs to create transformational growth and value,” Baker said in a post on X.

About Musk’s New Package

Tesla proposed a new compensation package for Musk, valued at approximately $1 trillion, in September. According to the new pay plan, Musk will receive no salary but will be awarded up to 423.7 million shares of Tesla in installments over 10 years when the company meets certain milestones, including an increase in earnings, vehicle deliveries, robotaxis, and humanoid robots.

The new package is designed to deliver approximately 12% more voting power to Musk in exchange for driving performance growth, including by taking the company’s total market capitalization to $8.5 trillion. Tesla shareholders must now approve the package, and the results of the shareholder vote will be announced at the company’s annual meeting of shareholders on November 6.

Musk’s previous pay package, initially approved in 2018 and valued at over $50 billion, was voided by a Delaware court, which deemed it excessive, last year. Musk appealed the court’s order in March, and Tesla established a special committee to consider matters concerning Musk’s pay, including evaluating a new pay package.

Baker’s Take On Musk’s Compensation Package

According to Baker, the new package is “arguably better” than the 2018 one as it also includes financial and technological milestones in addition to market cap-based incentives.

He also opined that Elon’s involvement is integral to maintaining Tesla’s current course and trajectory. Tesla Board chair Robyn Denholm warned earlier this month that Musk might leave if the package is not approved.

“I believe it is highly likely that Tesla’s stock would decline significantly should Elon leave and even more should the Optimus team leave with him,” Baker said, while also noting that Atreides Management is an investor in many of Musk’s companies.

Not Everyone Is In Alignment With Baker

Baker’s announcement comes as many others plan to or recommend voting against Musk’s whopping package. This includes the public pension plan and Tesla shareholder California Public Employees’ Retirement System or CalPERS, New York State Retirement Fund, and American Federation of Teachers.

Proxy firms Glass Lewis and Institutional Shareholder Services have also recommended that shareholders vote against the package, causing Musk to slam them as “corporate terrorists” on the company’s third-quarter earnings call.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around TSLA stayed within the ‘bearish’ territory while message volume remained at ‘normal’ levels.

TSLA stock is up 9% this year and approximately 76% over the past 12 months. 

Read also: SpaceX Set To Bag $2B Government Funding To Develop Golden Dome Satellites: Report

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