Longtime Tesla Holder Baillie Gifford Backs $56 Billion Musk Pay

(Bloomberg) -- One of Tesla Inc.’s longest-standing holders, Scottish asset manager Baillie Gifford, will vote in favor of Elon Musk’s $56 billion pay package, according to a person familiar with the matter.

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The asset manager supports the controversial pay award across its funds because the targets tied to it were extremely ambitious and aligned with shareholder returns when they were set in 2018, the person said, asking not to be identified discussing private information.

Baillie Gifford declined to comment.

Tesla’s shareholders endorsed Musk’s pay six years ago, but in January a Delaware Chancery Court judge struck down the plan and said investors weren’t fully informed of key details. Tesla is bringing the pay package before investors for a second time at this week’s annual general meeting.

Some large shareholders have already come out against the large pay award, and proxy advisers Institutional Shareholder Services and Glass Lewis & Co. recommended that investors reject the proposal.

Norway’s $1.7 trillion sovereign wealth fund Norges Bank Investment Management said last week it would oppose the package as it was still “concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk.”

Baillie Gifford was once Tesla’s second-largest shareholder, after Musk, and has held the stock for more than a decade. It started reducing its stake around 2020 and now holds only about 0.5% of the company across several of its funds, according to data compiled by Bloomberg.

The asset manager’s largest fund — the Scottish Mortgage Investment Trust — said in May it would support the package, but it was unclear at the time how the company would vote as a whole.

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