Scottish fund manager Baillie Gifford, a long-time shareholder of Tesla Inc (NASDAQ), is reportedly set to support Elon Musk's $56 billion pay package in an upcoming shareholder vote scheduled for June 13, according to a Bloomberg report citing unnamed sources.

Baillie Gifford's Endorsement

• Long-Standing Support: Baillie Gifford, which has been a Tesla shareholder for over a decade, is prepared to back Musk's pay package, signaling confidence in the CEO's ability to meet the ambitious targets outlined in the proposal.

• Achievement of Targets: Musk's compensation package, initially approved in 2018 but later invalidated by a Delaware judge, is contingent on Tesla achieving specific performance milestones. Baillie Gifford reportedly believes that Musk has successfully met these targets.

• No Comment: Baillie Gifford declined to comment on its stance regarding the pay package when approached by Bloomberg, but sources familiar with the matter confirmed the fund manager's support.

Mixed Responses

• Institutional Opposition: Despite Baillie Gifford's endorsement, other institutional investors, including Institutional Shareholder Services (ISS) and Norway's sovereign wealth fund Norges Bank Investment Management, have voiced opposition to the compensation package. ISS has recommended shareholders vote against it.

• Impact on Tesla's Stock: The ongoing debate over Musk's pay package has been cited as one of several factors affecting Tesla's stock. Approval of the package would be seen as a positive development, potentially alleviating concerns and distractions surrounding the company.

Moving Forward

• Resolution of Overhang: Baillie Gifford's support for Musk's pay package represents a significant development for Tesla, as it seeks to address lingering uncertainties and focus on its core business objectives. Approval of the package could help Tesla navigate challenges in the competitive EV market.

• Investor Sentiment: The outcome of the shareholder vote will be closely watched by investors and industry observers, as it may impact Tesla's strategic direction and investor sentiment in the near term.

As Tesla moves closer to resolving the controversy surrounding Elon Musk's compensation, the company faces critical decisions amid increasing competition and evolving market dynamics.

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