On August 25, 2025, Tesla made headlines once again—not for a new car launch or a technological breakthrough, but for a boardroom decision that’s ignited fierce debate among investors, academics, and the business world at large. The electric vehicle giant granted CEO Elon Musk a staggering $29 billion in company stock, a move that’s drawn both admiration and skepticism. According to Barron’s and Mint, this eye-popping compensation package may come with unintended consequences that extend far beyond Musk’s already astronomical net worth.
Let’s set the stage: before this latest stock grant, Musk already owned roughly 13% of Tesla, an ownership stake valued at about $120 billion at the time. For most people, that would be more than enough incentive to keep their eyes on the prize. Yet, the Tesla board saw fit to sweeten the pot with an additional $29 billion in shares—a sum that would make even the most seasoned Wall Street veteran do a double take.
But here’s where things get interesting. While the traditional rationale for such massive stock awards is to align CEO interests with those of shareholders, some leading thinkers say this approach may be fundamentally flawed—especially when the recipient is already among the richest people on the planet. Gautam Mukunda, a lecturer at the Yale School of Management and author of Indispensable: When Leaders Really Matter, told Mint that the logic simply doesn’t hold up under scrutiny. "If billions more are needed to motivate CEOs who already own huge chunks of their companies, the entire premise of incentive compensation collapses," Mukunda said.
Mukunda’s research, cited in both Barron’s and Mint, suggests that not only do mega stock awards fail to boost CEO performance, but they may also encourage behaviors that are ultimately harmful to both the company and its shareholders. The culprit? CEO narcissism—a trait that, according to a growing body of academic literature, can have serious negative repercussions for corporate performance.
To be clear, Mukunda isn’t calling Musk a narcissist. Instead, he’s pointing to a phenomenon that’s been studied extensively in the world of management research: the tendency for outsized rewards to fuel self-aggrandizement and status-seeking among CEOs. "What you don’t want to do," Mukunda explained to Mint, "is take a CEO who is slightly more narcissistic than average and then add more fuel to the fire by granting a mega stock award." He added, "Musk clearly seeks attention for himself in a way that is exceptional among CEOs. For example, very few CEOs have a cameo in Iron Man 2."
Researchers have developed some creative ways to measure CEO narcissism, looking at everything from the size of a CEO’s photograph in annual reports to the prominence of their signature or their use of first-person pronouns in interviews. While it’s unclear exactly how Musk would score on these metrics, his public persona and penchant for the spotlight are hard to ignore.
But why does CEO narcissism matter? According to studies cited by both Barron’s and Mint, narcissistic leaders can drive companies to extremes—sometimes achieving spectacular successes, but just as often courting disaster. One study found that CEO narcissism "engenders extreme and fluctuating organizational performance." That description seems tailor-made for Musk’s tenure at Tesla, which has seen both breathtaking triumphs—such as pioneering the electric vehicle market—and high-profile stumbles, like the much-maligned rollout of the Cybertruck.
The research doesn’t stop there. Another study highlighted by Barron’s found that "firms led by narcissistic CEOs experience lower financial productivity in the form of profitability and operating cash flows." Yet another concluded that "CEO narcissism is associated with worse credit ratings." The message is clear: while bold, charismatic leaders can sometimes move mountains, unchecked ego and excessive compensation can just as easily undermine a company’s long-term prospects.
It’s not just about fairness or waste, either—though those concerns are hardly trivial. The debate over CEO pay has raged for decades, with critics questioning whether it’s reasonable or just to shower a single executive with such lavish rewards. But the latest research points to a third, potentially more troubling issue: mega pay packages may actually harm the very companies they’re supposed to help.
As Barron’s noted, Musk’s record at Tesla has been nothing if not volatile. The company has soared to new heights, revolutionizing the auto industry and making electric vehicles mainstream. But it has also faced its share of setbacks—production delays, quality concerns, and market missteps. Some analysts argue that this kind of high-stakes leadership, fueled by ever-larger stock grants, can lead to wild swings in performance and ultimately leave shareholders holding the bag.
Despite these concerns, Tesla’s investor relations department did not respond to repeated requests for comment from both Barron’s and Mint. That silence leaves many questions unanswered: How does the board justify such a massive award? What metrics, if any, are in place to ensure that Musk’s compensation is tied to real, sustainable results? And perhaps most importantly, what message does this send to other CEOs—and to the broader public—about the role of executive pay in today’s corporate landscape?
Of course, defenders of Musk’s compensation package point to his undeniable impact on Tesla’s fortunes. Without his vision and relentless drive, they argue, the company might never have achieved its current level of success. For some shareholders, the prospect of keeping Musk motivated and at the helm is worth almost any price. But as the academic evidence mounts, others are beginning to wonder whether there’s such a thing as too much incentive—even for a leader as singular as Musk.
One thing is certain: the debate over CEO pay is far from settled. As more companies grapple with how to reward their top executives without courting disaster, the lessons from Tesla’s latest stock grant will be watched closely by boards, investors, and policymakers alike. After all, in the world of corporate leadership, the line between genius and hubris can be razor-thin.
For now, Tesla’s $29 billion bet on Musk stands as a bold—and controversial—statement about the value of leadership and the risks of unchecked ambition. Whether it pays off in the long run remains to be seen, but one thing’s for sure: the world will be watching.
