Tesla CFO Zach Kirkhorn's departure: The driving factor.

author: FutureCar Staff    

Over the past few weeks, there have been several changes in CFO positions at major companies. The latest news comes from Tesla, where Zachary Kirkhorn, the CFO and "master of coin," has stepped down. This announcement came as a surprise to many, with tech analyst Dan Ives describing it as a "big surprise to the Street." However, unlike other companies that have not named a permanent successor for the CFO role, Tesla has appointed Vaibhav Taneja as CFO in addition to his current role as chief accounting officer. The company stated in an SEC filing that Tesla has experienced significant expansion and growth during Kirkhorn's tenure. Kirkhorn will remain at the company until the end of the year to support the transition.

The document announcing Kirkhorn's departure did not provide any reasons for his decision. In a LinkedIn post, Kirkhorn expressed his pride in being a part of Tesla and thanked the employees and Elon Musk for their leadership and inspiration. Interestingly, the Wall Street Journal recently reported that Kirkhorn was being considered as Musk's successor for the CEO position. This raises the question of why he has chosen to leave now. There are three theories on why Kirkhorn is moving on.

The first theory suggests that Kirkhorn believes the heavy lifting at Tesla has been done. When he joined the company in 2010, Tesla was valued at $50 billion. Today, it is worth $773 billion. Under Kirkhorn's leadership as CFO, Tesla has achieved profitability and repaid a significant amount of debt, securing investment-grade ratings. This theory suggests that Kirkhorn may be seeking new challenges and opportunities elsewhere, possibly as a CEO in 2024.

Despite Kirkhorn's departure being seen as a blow in the near term, analysts believe that Tesla has a strong bench and will be able to navigate this transition effectively. The company has experienced a historic turnaround in the last five years, and Kirkhorn played a key role in that. However, his departure does not diminish the progress Tesla has made.

In other news, a new analysis by S&P Global Market Intelligence reveals that private equity portfolio companies in the U.S. may see the highest number of annual bankruptcy filings since 2010. In the first half of this year, 338 U.S. companies filed for bankruptcy protection, including 54 companies with private equity or venture capital backing. If the current pace continues, private equity portfolio companies are projected to reach 108 bankruptcies by the end of 2023, surpassing the total number of bankruptcies in 2020.

On a more positive note, a report by Mercer shows that the estimated aggregate funding level of pension plans sponsored by S&P 1500 companies increased by 2% in July 2023. This increase is attributed to growth in equity markets and an increase in discount rates. The estimated aggregate surplus of these pension plans also rose by $34 billion compared to the previous month.

There have also been recent changes in CFO positions at other companies. Tarek Robbiati, the CFO at Hewlett Packard Enterprise, has resigned to accept the CEO role at RingCentral, Inc. Jeremy Cox, the SVP, corporate controller, and chief tax officer, will serve as interim CFO while the company searches for a permanent replacement. Additionally, Jochen Goetz, the CFO at Daimler Truck Holding AG, tragically passed away in an accident. Goetz had been with the company for over 36 years and was responsible for finance and controlling.

In a statement regarding their employees' work arrangements, Zoom Video Communications announced a structured hybrid approach. Employees living within 50 miles of a Zoom office are required to work there at least two days a week to facilitate team interaction.

FutureCar Staff