Tesla CEO Musk's $29B Pay Package: Can the Stock Afford It?

Tesla's $29 billion stock grant to CEO Elon Musk is under scrutiny, with critics arguing it may become an expensive overhang for investors. The deal ties Musk's wealth to Tesla's performance, but critics argue it adds little incentive since he already owns a large stake in the company. Research suggests oversized grants can encourage risky behavior and weigh on future growth potential, raising doubts about whether Tesla stock can afford Musk's pay package.

Tesla's decision to grant CEO Elon Musk a $29 billion stock package has sparked controversy and raised questions about the long-term implications for the company and its investors. The grant, announced in early August, ties Musk's wealth to Tesla's performance, but critics argue it adds little incentive since he already owns a significant stake in the company.

The move has been criticized by the SOC Investment Group, which has formally requested Nasdaq to investigate the grant. The shareholder group alleges that the Tesla board bypassed Nasdaq's rules by not putting the "2025 CEO Interim Award" to a shareholder vote [2]. The group contends that the award should have been put to a vote, as Nasdaq rules require such approval for major changes to executive pay plans.

Research suggests that oversized grants can encourage risky behavior and weigh on future growth potential. Critics argue that Tesla stock may struggle to support Musk's pay package, raising doubts about the company's ability to afford the grant in the long run. Moreover, the grant could potentially diminish Tesla's long-term potential if it leads to risky decisions or detracts from the company's overall growth strategy.

The acquisition of Verint Systems by Thoma Bravo for $2 billion, announced on August 25, 2025, highlights the broader trend of market consolidation in the customer engagement solutions sector [4]. This consolidation could have implications for Tesla's ability to innovate and compete in the market, as it faces increasing pressure to deliver on its growth potential.

In conclusion, Tesla's $29 billion stock grant to Elon Musk is under scrutiny, with critics arguing it may become an expensive overhang for investors. The deal ties Musk's wealth to Tesla's performance, but critics argue it adds little incentive since he already owns a large stake in the company. Research suggests oversized grants can encourage risky behavior and weigh on future growth potential, raising doubts about whether Tesla stock can afford Musk's pay package.

References:
[1] https://www.barrons.com/articles/teslas-29-billion-stock-grant-to-musk-could-be-costly-in-the-long-run-1f16d391
[2] https://timesofindia.indiatimes.com/technology/tech-news/tesla-investors-urge-nasdaq-to-probe-elon-musks-29-billion-stock-award-amid-serious-concerns-over-/articleshow/123484737.cms
[3] https://fortune.com/2025/08/21/wealth-inequality-ceo-worker-pay-gap-low-wage-employers/
[4] https://www.ainvest.com/news/verint-systems-acquired-thoma-bravo-2-billion-deal-2508/