Tesla investor Scottish Mortgage to back Musk's $56 billion pay package

FILE PHOTO: Elon Musk, chief executive officer of SpaceX and Tesla, speaks to the media during the launch of SpaceX's Starlink internet service in Indonesia at a sub district community health center in Denpasar, Bali, May 19, 2024. REUTERS/Johannes P. Christo/File Photo

(Reuters) - Tesla investor Scottish Mortgage Investment trust said on Thursday it plans to continue backing CEO Elon Musk's $56 billion pay package at its annual shareholder meeting next month.

Last month, the EV maker asked shareholders to reaffirm their approval for Musk's record-breaking compensation after a Delaware judge rejected the package in January.

Scottish Mortgage had agreed to the package Tesla set in 2018 and after agreeing to the deal, the firm believes the amount should be paid out, Tom Slater, manager at the investment trust said.

Musk's pay package, the largest in corporate America, has no salary or cash bonus and sets rewards based on Tesla's market value rising to as much as $650 billion over the next 10 years from 2018.

The automotive giant’s market value stood at $574 billion as of Wednesday’s closing price, having already touched the $1 trillion market cap figure in 2021.

Tesla's chair, Robyn Denholm has reportedly been campaigning and meeting with shareholders to secure their vote for the approval of Musk's pay deal.

Scottish Mortgage, managed by Baillie Gifford, is yet to decide on Musk's move to incorporate Tesla in Texas, the investment trust told the Financial Times, which first reported the news first.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Tasim Zahid)