Shares in electric carmarker dropped 6% on Friday after two executives quit
Tesla makes staff promotions to limit turmoil after share collapse
Tesla chief executive Elon Musk made a series of executive promotions to fill the gap left by senior management resignations on Friday, as shares in the electric car maker tanked and criticism of its founder’s controversial behaviour continued.
Tesla shares crashed 6 per cent by close of day on Friday – its lowest level in five months – and its bonds traded at record lows, when two of its senior executives quit after Mr Musk smoked marijuana on a live web show with US comedian Joe Rogan on Thursday night.
The drug is legal in California, where Mr Musk was at the time and where Tesla has its headquarters.
The company’s head of accounting, Dave Morton, and head of human resources, Gaby Toledano, announced they were leaving the company. Mr Morton – who joined only one month ago – said he was resigning because “the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations”.
Mr Morton said he still believes strongly in Tesla’s “mission and future prospects” and has “no disagreements with Tesla’s leadership or its financial reporting”.
Tesla is already embroiled in controversy over a tweet published by Mr Musk last month, in which he said he had the funding to take the company private for $420 a share. US regulator the Securities and Exchange Commission (SEC) is investigating whether the tweets may have violated US securities law, according to a report in August by Fox Business Network, citing sources.
Mr Musk later backed off from his privatisation plan, saying Tesla was better off as a public company. The company's shares fell 4 per cent on reports of the SEC’s investigation. They had risen by 11 per cent shortly after Mr Musk’s original tweet.
Later in August, Sarah O’Brien, Tesla’s vice-president of communications, resigned after nearly two years with the company – a departure that had reportedly been planned for several months and preceded the drama over the tweets.
On Friday night, Mr Musk attempted to minimise the chaos surrounding his company after its shares sank, by making a series of internal promotions to address the resignations of Mr Morton and Ms Toledano and the departure of Ms O’Brien, which had been scheduled for that day.
Jerome Guillen, who was responsible for overseeing Tesla’s engineering and sales operations, was elevated to the new position of president of automotive operations, while Kevin Kassekert, who had been vice-president of infrastructure development, was appointed as vice-president of people and places, replacing Ms Toledano, who told Bloomberg on Friday she would not return from a leave of absence.
Dave Arnold became senior director of global communications, taking over from Ms O’Brien, while Mr Morton’s position as chief accounting officer, was left unfilled.
Mr Musk spent two and half hours on Joe Rogan’s streamed podcast on Thursday night discussing a range of topics including artificial intelligence and social media.