Tesla in turmoil: Executives bail and stock plunges
Top executives are leaving Tesla, and investors are getting nervous.
Shares of Tesla (TSLA) fell as much as 10% in morning trading after the company disclosed that its chief accounting officer resigned less than a month after he assumed the job. And Bloomberg reported that its chief people officer, Gaby Toledano, is not returning to the company after taking a leave. Tesla did not respond to questions about that report.
The departures add to investor concern about a company in tumult. CEO Elon Musk devised and then quickly canceled a plan to take the company private. A podcast appearance Thursday night featuring whiskey, a joint and a Samurai sword was only the latest example of Musk’s eccentric behavior.
Tesla stock has lost a third of its value since August 7, the day Musk announced the go-private plan.
Executives get out
Dave Morton, a former chief financial officer at Seagate (STX), had joined Tesla on August 6 as chief accounting officer. That was the day before Musk announced his plans to take the company private via tweet.
The company said that Morton gave notice and left the company Tuesday.
“Since I joined Tesla on August 6th, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations,” said a statement from Morton released by the company in a filing with the Securities and Exchange Commission. “As a result, this caused me to reconsider my future.
“I want to be clear that I believe strongly in Tesla, its mission, and its future prospects, and I have no disagreements with Tesla’s leadership or its financial reporting,” he added.
Toledano ran the human relations department and was one of the top executives at the company, reporting directly to Musk. She joined Tesla only 16 months ago.
She has an impressive resume: She served 10 years on the executive team at Electronic Arts (EA), which followed a job leading human resources at Siebel Systems and time at Microsoft (MSFT) and Oracle (ORCL). She sits on the boards of four tech companies.
Musk talked in a New York Times interview last month about the stress that Tesla is putting on him personally as he works 120 hours a week, sleeping at the factory, cut off from family and friends. Numerous experts have suggested the company’s board needs to be taking steps to make sure he doesn’t burn out. Several analysts have argued the company needs to hire a chief operating officer to help management the company and bring stability to its day-to-day operations.
The turnover among top executives should concern investors who wanted more stability at Tesla, said John Wilson, head of research and corporate governance at Cornerstone Capital Group. He called the executive departures another red flag.
“He’s a visionary … but his job is to be catalyst, the inspiration, not necessarily the person to make it happen day after day after day,” Wilson said. “His brilliance can’t shine if he doesn’t have that bench of executive strength.”
In addition to Morton and Toledano, the company has recently lost a number of other top executives, including Doug Field, who left his job as Tesla senior vice president of engineering in July and returned to Apple (AAPL) where he had previously worked. Field was one of the top five executives at Tesla.
Field left after Musk took over his duties overseeing manufacturing. Tesla has struggled to hit production targets for its new cars.
Tesla also lost Eric Branderiz, Morton’s predecessor as chief accounting officer, in March. Branderiz left for “personal reasons” after just 17 months in the job.
