After Tesla Buyout, SolarCity Sheds Workers, Cuts CEO Salary to $1
Major operational cost-cutting for Elon Musk’s newest toy, SolarCity, the largest solar panel installer in America.
In a blog post earlier this month, SolarCity Corp. announced it would combine with Tesla Motors in a $2.6 billion all-stock buyout. The deal makes sense. Tesla CEO Elon Musk already held a 22 percent stake in SolarCity, the largest rooftop solar installer in America. Also, the latter firm’s co-founders, Lyndon and Peter Rive, are Musk’s cousins. The two companies want to create "the world's only vertically integrated sustainable energy company." Solar shingles on your roof, storing energy to charge the car in your garage, driving to buy more solar shingles.
But, first, there are going to be some changes.
In a Security and Exchange Commission filing this week, SolarCity outlined its upcoming corporate “realignment” strategy. That includes cuts to operating costs, and layoffs to the company’s 15,000-person strong workforce. While the number of employees made redundant remains unknown, SolarCity says it expects to pay out up to $5 million in severance. Lyndon and Peter Rive will also cut their personal salaries from a combined $525,000 to $1 per year each, in what analysts describe as “a symbolic move.”
(Per Bloomberg, Lyndon earned $98.3 million in non-cash compensation last year; Peter earned $65.5 million.)
SolarCity is not profitable, and carries $3.35 billion in debt. Recently, the company has been struggling in the face of slowing demand. Last week, SolarCity announced it expects to install 170 megawatts of panels during the current quarter. That’s down from 201 megawatts in the second quarter, a 15 percent drop.