Tesla raises its bets on elong shot Musk

Company boards are meant to be the shareholder's best defence against management. They keep CEOs focused on profits and shareholder value. Typically, a CEO should be losing the trust of their board if sales are falling, the competition is gaining the upper hand, and the brand is losing value due to ill-advised political engagement - pretty much the things Tesla is feeling the brunt of. But the carmaker's board has, instead, put conventional management wisdom on its head by offering Elon Musk $29 bn in shares to be more attentive to his job. Never mind that the courts have struck down an earlier, even more generous package Tesla had offered its CEO.

Interestingly, investors seem to approve the move. The Tesla stock climbed on the announcement after having lost about a quarter of its value this year. The EV-maker has created enormous shareholder value with Musk at the helm, and investors see him as key to unlocking even more value. Admittedly, driverless cars are so far the most lucrative of Musk's preoccupations - the other ones being colonising space with reusable rockets, and implanting chips inside the human brain. But the question remains open whether piling on legally-challenged incentives is the right way to go about focusing the mind of the world's richest man. A slide in the value of Musk's shareholding in Tesla would serve the same purpose. It constitutes a big part of his net worth, and allows him to chase objectives like defending democracy through the acquisition of Twitter. The political and business objectives of that deal remain unclear.

Musk is an extraordinary innovator. He is, however, not the only innovator out there. And not all his innovations have made money. Tesla's shareholders can't be entirely faulted for playing it safe.