Tesla, the trailblazing electric vehicle giant led by CEO Elon Musk, has once again found itself at the center of debate—this time not for its technological prowess, but for the staggering scale and implications of its executive compensation and evolving business strategies. As August 2025 draws to a close, industry experts and investors are closely scrutinizing the company’s latest moves, both in the boardroom and on the showroom floor, and asking what these shifts mean for Tesla’s future.
According to Global Economic, Tesla’s board recently approved a monumental stock-based compensation package for Musk, valued at $29 billion (about 40 trillion won). This decision has ignited a fresh wave of discussion among business scholars, investors, and governance experts, not only about the sheer size of the payout but also about the long-term risks such packages might pose to the company’s stability and performance.
Gautam Mukunda, a lecturer at Yale School of Management and author of Indispensable: When Leaders Really Matter, has been particularly vocal about the potential downsides of such outsized rewards. In an interview with Global Economic, Mukunda argued, “Granting a massive equity award to a CEO who already owns a substantial amount of stock encourages behavior that could ultimately harm the company and its shareholders.” He challenged the common wisdom that ever-larger pay packages motivate CEOs to deliver better results, especially when the recipient is already one of the company’s largest shareholders. “If making that much money isn’t enough to motivate someone to do their best, adding $29 billion more won’t make a difference,” Mukunda said. “At that point, the very premise of performance-based pay collapses.”
As of the board’s decision, Musk already controlled about 13% of Tesla’s shares—worth a staggering $120 billion (roughly 167 trillion won). The new compensation plan only further cements his influence over the company, raising concerns that Tesla’s fate is becoming increasingly intertwined with the personality and whims of its charismatic leader. Tesla declined to comment when contacted for a response.
But what’s really at stake here? Mukunda and other scholars have pointed to a growing body of research linking CEO narcissism to erratic corporate performance and even declining financial health. Academics have developed creative ways to measure executive narcissism—everything from the size of a CEO’s portrait in the annual report to the frequency of first-person pronouns in interviews. While Mukunda was careful to note he wasn’t singling Musk out for personal criticism, he did observe, “It’s clear that he seeks an unusual amount of attention for a CEO. For example, there are very few CEOs who have made cameo appearances in movies like ‘Iron Man 2.’”
Why does this matter to investors and the broader market? According to research cited by Global Economic, companies led by highly narcissistic CEOs often experience greater swings in performance—sometimes spectacular successes, but also dramatic failures. Tesla’s own history is a case in point, with headline-grabbing innovations like the Cybertruck and Model Y, but also periods of disappointing sales and missed targets. Studies have also shown that firms with such leaders tend to have weaker profitability and cash flow, along with lower credit ratings. The upshot: the very qualities that make a CEO a media sensation may also introduce long-term instability and risk to the business.
This debate over Musk’s latest pay package is shifting the focus of executive compensation discussions. Where the conversation once revolved around fairness or resource allocation, experts are now asking whether such pay structures could actually undermine the long-term health of the organization itself. As one analyst put it, “The risk is that Musk the individual becomes synonymous with Tesla the company, making the firm’s value and stability increasingly dependent on one person’s actions.”
Meanwhile, Tesla is grappling with a very different kind of challenge in the U.S. market: slowing sales and mounting inventory. As reported by CBT News, Tesla has taken the unusual step of introducing a zero-interest lease program for certified pre-owned (CPO) vehicles in California and Texas. The move, which offers monthly payments starting at $215 and minimal upfront costs, comes as the company faces a 13% drop in U.S. sales during the first half of 2025. Compounding the pressure, General Motors has seen its own electric vehicle sales surge by 111% over the same period, intensifying the competitive landscape.
The timing of Tesla’s new CPO lease program is no coincidence. Federal tax credits for new electric vehicles ($7,500) and used EVs ($4,000) are set to expire at the end of September 2025, prompting a rush of buyers hoping to lock in the last available subsidies. According to industry data cited by CBT News, U.S. used car sales climbed 7% in July, with Tesla’s inventory levels rising to cover 43 days of sales—a sign that the company is eager to clear out aging stock before demand potentially falls off a cliff once the credits disappear.
Tesla has also expanded its CPO warranty options, allowing buyers to choose between 24-month (up to 10,000 miles per year) and 12-month (up to 15,000 miles per year) coverage. These flexible terms are designed to make electric vehicles more accessible and appealing to cost-conscious consumers. Still, some analysts warn that once the tax credits end, EV sales could drop sharply, forcing Tesla to rely even more on creative financing and promotional deals to keep its factories humming.
It’s not the first time Tesla has turned to financial incentives to boost sales. In May, the company ran a successful promotion in Norway, offering zero-interest financing and free fast-charging—a campaign that led to a 213% jump in new registrations. In China, Tesla has also used interest-free installment plans to compete with local electric vehicle makers.
So, where does all this leave Tesla? On one hand, the company’s leadership structure and Musk’s vision remain central to its identity and global ambitions. As Global Economic noted, “Tesla’s leadership and CEO’s role are critical for the company to maintain its position and growth.” The company’s market capitalization has soared, with recent figures pegging it at around 290 trillion won, and Musk’s family maintaining a significant stake. Yet, the very concentration of power and influence in one individual brings new risks—especially as the company navigates a volatile market and intensifying competition.
For investors, employees, and fans alike, the coming months will test whether Tesla’s bold bets—both in the boardroom and on the road—will fuel another chapter of growth or expose deeper vulnerabilities. At a time when the electric vehicle industry is evolving faster than ever, the stakes for Tesla—and for Musk—have never been higher.
