In a surprising turn of events, billionaire investor Ron Baron has publicly backed Tesla CEO Elon Musk's controversial compensation package just one week ahead of the company's shareholder meeting. Baron, the chairman and CEO of Baron Capital, whose funds own Tesla stock, believes that Musk is the ultimate key to the success and growth of the electric vehicle (EV) giant.

Baron's decision to endorse Musk's pay package comes as no surprise considering the lucrative returns he has garnered from his Tesla investment. In an open letter, Baron emphasized that without Musk's unwavering determination and uncompromising standards, Tesla would not have achieved its current position. He went on to claim that Musk is the "ultimate key man of key man risk," underscoring the crucial role he plays in the company's future prospects.

Highlighting the financial gains associated with Tesla, Baron referenced a note from March, revealing that his investment firm made an impressive $5.5 billion from an initial investment of $400 million in 2014-2016. Despite recent setbacks for Tesla, Baron remains firmly in Musk's camp, emphasizing his unwavering support for the CEO.

However, there are concerns surrounding the potential impact of the upcoming shareholder vote on Tesla's stock. Morgan Stanley conducted an informal poll of their institutional clients, revealing that many believe the approval of Musk's pay package would have a positive effect on the stock. Conversely, a rejection of the pay package could result in significant negative repercussions in the near term.

As the shareholder meeting approaches, the focus now shifts to the potential volatility and uncertainty surrounding Tesla's stock. While Baron's endorsement adds weight to Musk's bid for a larger compensation, the outcome of the vote remains uncertain. Shareholders will ultimately decide whether to protect and grow their investment by approving Musk's compensation contract.

The attention now turns to the significant decision that lies ahead and the potential ramifications for Tesla. With Baron's support, Musk may be able to navigate through this contentious issue and continue to lead the company towards its ambitious goals in the EV industry.