Benzinga - by Anan Ashraf, Benzinga Editor.
Venture capitalist Naval Ravikant stated on Sunday that he would sell his Tesla, Inc (NASDAQ:TSLA) stock if Elon Musk’s $56 billion compensation package is not approved, and buy more if it is passed.
What Happened: Ravikant took to X to announce that he is a Tesla stockholder and will vote in favor of Musk’s rescinded pay package. Musk's 2018 pay package was rescinded by the Delaware Court of Chancery earlier this year, deeming it “an unfathomable sum.” Tesla’s board is now attempting to reinstate the rescinded pay package with another shareholder vote, the results of which will be declared at the company’s annual shareholder meeting on June 13.
On Sunday, Ravikant described the invalidation of Musk’s pay package as “politically motivated.”
“A politically motivated judge invalidated a private deal ex-post facto,” he wrote on X.
A politically motivated judge invalidated a private deal ex-post facto.I bought Tesla stock and am voting for Elon's pay package.
If it's rejected, I'll sell. If it's approved, I'll buy more.
— Naval (@naval) June 9, 2024
The venture capitalist believes that Tesla will enable vehicle autonomy in the future as promised by Musk. “Tesla won't be remembered for electric cars as much as it'll be remembered for autonomy,” Ravikant said in April.
Ravikant, best known as the founder of AngelList — a platform aimed at connecting startups with angel investors — is also the founder of AirChat, an audio-based platform unlike traditional social networks, including Musk’s X, which rely heavily on text and images.
Why It Matters: Ravikant is not the only big name supporting Musk’s pay package. On Saturday, Musk stated that roughly 90% of retail shareholders who had voted thus far, voted in favor of his package and also for changing Tesla’s state of incorporation from Delaware to Texas. Billionaire investor and CEO of Baron Capital, Ron Baron, has also expressed strong support for Musk's substantial $56 billion compensation package.
However, proxy advisory firms Glass Lewis and Institutional Shareholder Services (ISS) have advised Tesla shareholders to vote against Musk’s pay package, calling it “excessive.”
Morgan Stanley analyst Adam Jonas expects the upcoming shareholder vote on Musk's pay package to determine the long-term strategic direction of the company and drive significant volatility in Tesla shares.
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Photo via TechCrunch on Flickr
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