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Tesla chief financial officer Zach Kirkhorn stepped down after 13 years at the electric-vehicle maker, a surprise shakeup that raises new questions about succession in the top ranks of Elon Musk’s company.
Kirkhorn, one of just four executive officers and a prominent voice for the company with shareholders, resigned from his duties on August 4, the company said in a regulatory filing. He’ll continue to serve in an unspecified capacity through the end of the year “to support a seamless transition.”
Zach Kirkhorn has been at Tesla for 13 years and played a leading role in growing the company.
Chief accounting officer Vaibhav Taneja took on the CFO role in addition to his current duties, Tesla said. Taneja, 45, held several positions at the EV maker before becoming accounting chief in 2019. He previously worked at PricewaterhouseCoopers in India and the US.
Kirkhorn owned 197,540 shares as of last month, according to data compiled by Bloomberg, a holding valued at about $US49 million. He recently sold about $US1 million of shares. He is believed to hold stock options worth millions more.
Tesla shares turned negative on the news in early trading. They pared a drop of as much as 4.4 per cent to close 1 per cent lower. The stock price has more than doubled so far this year. The company has a market capitalisation of $US797 billion ($1.2 trillion).
Kirkhorn’s departure comes as Tesla builds a new factory in Mexico and prepares to bring its Cybertruck pickup to market as it fends off rivals in the increasingly crowded EV market. Tesla has lowered prices across its lineup to maintain its position atop the electric-car industry.
“He’s done a 13-year tour of duty working for Elon, which is like working 50 years for anyone else,” said Gene Munster, managing partner of Deepwater Asset Management. “The fact that he’s sticking around until the end of the year bodes well for the transition.”
Still, the departure of Kirkhorn, who was considered a top contender to succeed Musk as chief executive officer, renews uncertainty over leadership at Tesla. It also instantly raises the profile of Taneja, who wasn’t among the 16 executives invited on stage with Musk at an investor meeting in March.
Kirkhorn joined Tesla in 2010 as a senior financial analyst and was promoted five times, most recently to CFO in early 2019 at the age of 34. Before he took over, Tesla had a long history of losses and occasionally burned more than $US1 billion of cash per quarter. The company has been consistently profitable since then and repaid about $US10 billion of debt in the last three years, helping it secure investment-grade ratings. It also joined the S&P 500 Index in December 2020.
Kirkhorn, a graduate of the University of Pennsylvania, worked under his predecessors as CFO, Deepak Ahuja and Jason Wheeler. He spoke at length on Tesla’s quarterly earnings calls and was well-regarded by investors for reining in costs. He regularly talked about how recurring revenue from software would play an increasing role going forward.
“Zach did a great job expanding margins,” said Munster. “Usually when companies scale up production, their margins come under pressure. He threaded the needle, and that’s a hard thing to do.”
The exit raises new questions about the succession plan in the top ranks of Elon Musk’s company.Credit: AP
“Being a part of this company is a special experience and I’m extremely proud of the work we’ve done together,” Kirkhorn wrote on LinkedIn. “I also want to thank Elon for his leadership and optimism, which has inspired so many people.”
Kirkhorn was a calm, steady presence on earnings calls, in stark contrast to Musk’s infamous bombast.
Ark Investment Management CEO & chief investment officer Cathie Wood said in an interview with Bloomberg Television that she will miss Kirkhorn’s presence but that Taneja is well-suited to take on the CFO job.
“We will miss him but his successor has been at Tesla right underneath him since 2018,” Wood said of Kirkhorn and Taneja. “He trained his successor well.”
‘He’s done a 13-year tour of duty working for Elon, which is like working 50 years for anyone else.’
Tesla is the largest individual contributor to Ark’s flagship Ark Innovation ETF. It accounts for almost 11 per cent of the net asset value of the fund, according to data compiled by Bloomberg.
The executive added “Master of Coin” to his job title in early 2021, about a month after Tesla disclosed it had made a $US1.5 billion investment in Bitcoin. The tongue-in-cheek title was given at the same time Musk became “Technoking of Tesla.”
The company’s filing Monday did not mention “Master of Coin” as one of Taneja’s roles as new CFO.
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