Tesla CEO Elon Musk’s seasonal group calls with all his investors are often unpredictable, nerve-wrecking events. And that’s not always due to Tesla’s financial performance.
Last May, for instance, Musk publicly shamed an analyst on a quarterly call by declining to answer what he described as “boring bonehead questions.” The casual comment sent Tesla shares plunging six percent almost immediately, in spite of the company’s strong sales figures. And in the following earnings call three months later, Musk offered the insulted analyst a public apology, which subsequently led to an unexpected surge in Tesla stock price.
At Tesla’s latest quarterly call Wednesday afternoon, things were going smoothly at first. Financial results from the last three months of 2018 fell within the range of Wall Street’s projections, and the company’s balance sheet looked healthy enough to cover a major upcoming debt payment that had worried analysts for weeks. That was until Musk caught everybody off guard in the final minutes with a surprising announcement that Tesla’s longtime CFO Deepak Ahuja was to be replaced by a little known 34-year-old employee named Zach.
Turns out that would be Zach Kirkhorn, a finance director who has worked at Tesla since 2010. According to his LinkedIn profile, Kirkhorn worked at Microsoft and the consulting firm McKinsey & Company before joining up with Musk. And per his brief self-introduction on Wednesday’s call, he’s also been deeply involved in several major projects at Tesla, including the development of the Roadster, Model S and X, the newest Model 3 and Tesla’s renewable energy business.
“Zach’s incredibly talented, has made a huge contribution to Tesla over the years, and obviously very well known to the whole team and has the respect of the whole team,” Musk said.
But investors didn’t react well to Musk’s unwarned C-suite shake-up. Tesla shares fell almost five percent in the after-trading hours on Wednesday, much of that happening in the minutes after the CFO announcement.
Some close Tesla observers felt they’d been intentionally left out of the conversation. “We see [Ahuja’s] departure as a significant loss of institutional knowledge, and note that Kirkhorn is a first-time public company CFO,” an analyst at AB Bernstein wrote in a note, according to CNBC.
“While the call had some positives around cash (largely due to under spending on capex and opex), those were overshadowed by the announcement of departure of the CFO and the absence of an experienced Silicon Valley (much less automotive experienced like ex-CFO Ahuja) vet to replace him,” was Goldman Sachs’ official take, CNBC reported.
The departure of Ahuja, the 56-year-old auto industry veteran who joined Tesla in 2008 from Ford Motor Co., was the latest and the most high-profile change inside Tesla’s leadership. In the past two years, more than 50 senior executives have left the company, including department heads in engineering, accounting, human resource and even Musk’s general counsel Todd Maron, who resigned last month.