Tesla CFO Zach Kirkhorn's departure: The driving force?

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【Summary】Tesla's CFO Zach Kirkhorn has stepped down from his position, with Vaibhav Taneja appointed as the new CFO. The reasons for Kirkhorn's departure are unclear, but one theory suggests that he may be seeking a CEO position elsewhere. Kirkhorn is credited with leading Tesla's financial turnaround and helping the company achieve profitability. However, his departure is seen as a blow in the short term, although Tesla is said to have a strong bench of talent.

FutureCar Staff Aug 15, 2023 5:12 PM PT

Tesla CFO Zach Kirkhorn's departure: The driving force?

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 as of August 4. This announcement has surprised many, including tech analyst Dan Ives from Wedbush Securities. 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. According to a filing with the SEC, Tesla praised Kirkhorn for his contributions to the company's expansion and growth. Kirkhorn will remain at Tesla until the end of the year to support the transition.

The reasons for Kirkhorn's departure were not discussed in the filing. However, in a LinkedIn post, Kirkhorn expressed his pride in being part of Tesla and thanked the employees and Elon Musk for their leadership. Interestingly, the Wall Street Journal recently reported that Kirkhorn was being considered as a potential successor to Musk for the CEO position. This raises questions about 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, and today it is worth $773 billion. Under Kirkhorn's leadership as CFO, Tesla has achieved profitability, repaid billions of dollars in debt, and secured investment-grade ratings. Some believe that Kirkhorn may now be looking for a CEO position elsewhere in 2024. While his departure is a blow in the near term, Tesla has a strong bench of talent.

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, the number of bankruptcies by private equity portfolio companies is projected to exceed the total for 2020 and reach the highest level since at least 2010.

According to a report by Mercer, the estimated funding level of pension plans sponsored by S&P 1500 companies increased by 2% in July 2023. This increase was attributed to growth in equity markets and discount rates. As of July 31, the estimated aggregate surplus of these pension plans reached $119 billion, up from $85 billion at the end of June.

In executive news, Tarek Robbiati, the CFO at Hewlett Packard Enterprise, has resigned from the company to accept the CEO role at RingCentral, Inc. Jeremy Cox, the SVP, corporate controller, and chief tax officer, will serve as interim CFO while HPE searches for a new CFO. Jochen Goetz, the CFO at Daimler Truck Holding AG, tragically passed away in an accident at the age of 52. Goetz had been with the company for over 36 years and was responsible for finance and controlling.

Finally, Zoom Video Communications has announced a new policy requiring employees living within 50 miles of a Zoom office to work there at least two days a week. A spokesperson for Zoom stated that they believe a structured hybrid approach, where employees interact with their teams on-site, is most effective.