It's not unusual for upper management to have discretion and a budget. Forget side projects -- work with him to find an important and interesting thing you won't micromanage at all.
Perhaps importantly: maybe "lead" roles no longer have any meaning, but if you are determining the engineering schedule months in advance, in enough detail for him to know it won't be interesting to work on, he could be frustrated by the micromanagement (whether it is real or only perceived is something I cannot know).
Perhaps importantly: maybe "lead" roles no longer have any meaning, but if you are determining the engineering schedule months in advance, in enough detail for him to know it won't be interesting to work on, he could be frustrated by the micromanagement (whether it is real or only perceived is something I cannot know).