Tesla, Inc. TSLA announced the resignation of company veteran Zachary Kirkhorn as CFO in early August and at that time, neither the company nor the executive clarified the reason for the departure.
Following the filing of Tesla’s third-quarter earnings report on Form 10-Q with the SEC, a fund manager said Kirkhorn may have been fired, based on “one nugget” from a regulatory filing.
What Happened: The 10-Q report contained a severance agreement between Tesla and Kirkhorn dated Aug. 4, 2023, which happens to be the separation date, said Future Fund Managing Partner and Tesla investor Gary Black.
The formal disclosure and wording of the severance agreement, “makes it highly likely Zach was terminated rather than resigned,” Black said.
The fund manager noted that the severance agreement contained severance benefits, which are largely a continuation of salary and benefits and vesting of equity, through Kirkhorn’s “exit date,” which was omitted.
His obligations to receive the severance benefits, included release of all claims, confidentiality agreement, non-solicitation of TSLA employees for an undisclosed amount of time, and importantly no non-compete, he added.
In a post on X, Black said, “Severance packages are for when C-suite execs get fired, not for resignations.”
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Why It’s Important: Replying to a question from a follower regarding the potential reason for the “likely” firing, Black said it could have been due to disagreement on the pricing philosophy.
Tesla has been aggressively cutting prices since the start of 2023 to chase volume. This has led to continued margin erosion and precipitated a double miss in the third quarter.
“But with Elon [Musk] it could have been anything,” the fund manager added.
In premarket trading on Tuesday, Tesla stock rose 2.78% to $217.98, according to Benzinga Pro data.
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