Ron Baron, big Tesla shareholder, supports Musk's 2018 Pay Package

$Tesla(TSLA.US)$ $BYD COMPANY(01211.HK)$ $NIO Inc(NIO.US)$ $XPeng(XPEV.US)$ The article reported that billionaire investor Ron Baron, longtime Tesla shareholder, wrote an open letter in support of CEO Elon Musk's (EM) controversial $56 billion pay package.

I summarized 3 reasons why Ron Barron supports EM's 2018 pay package:

1) The Baron Capital chairman and CEO said Musk's compensation contract in 2018 included "aggressive" performance metrics that few believed could be achieved. Musk would have earned nothing if these ambitious goals had not been met, he said.

2) "Elon is the ultimate 'key man' of key man risk," Baron said in the letter. "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!'"

3) Baron previously revealed that his firm has made about 20 times its investment in Tesla since he first bought the stock in 2014. Tesla is the biggest holding in Baron's oldest and largest fund, Baron Partners Fund (BPTIX), accounting for nearly 30% of the portfolio.

"At Baron Capital, our answer is clear, loud, and unequivocal: Tesla is better with Elon. Tesla is Elon," he said in the letter.

My Take: If you watch Ron Barron's interview video, he expressed confidence in the company with EM and would buy more Tesla stock.

“If I had a chance to buy more stock in Tesla right now, I’d buy more Tesla; I can’t even put a top on how much we’re going to make in Tesla because there’s so many businesses. This robotics business is going to be unbelievable.” - Ron Barron

Someone commented that the $56 billion pay package would "dilute" the stock causing the share price to fall. Tesla board has refuted the claim saying that EM's compensation package is paid in terms of options and stocks and he needs to hold them for 5 years - allows to sell stock to pay taxes.

"The deal allows me to sell enough stock to pay the taxes. The remaining stock must be held for 5 years, so it is impossible for me to cash out and run." - Elon Musk