Tag Archives: Executives
(Reuters) – Tesla Inc Chief Executive Elon Musk was filmed smoking marijuana and wielding a sword on a webcast, just hours before the automaker said its recently-appointed accounting chief would leave, the latest in a string of unusual behavior and executive departures that have stunned investors.
Shares of the electric carmaker tumbled more than 6 percent on Friday to $ 263.24, with investors on edge after a tumultuous August during which Musk proposed and then abruptly pulled the plug on a go-private deal.
Chief Accounting Officer Dave Morton resigned after just one month in the job because of discomfort with the attention on the company and pace of work during that time, Tesla said in a filing on Friday. It later said that Chief People Officer Gaby Toledano would not return from a leave of absence, just over a year after joining.
Later on Friday, Tesla named a new president of automotive operations, promoting eight-year Tesla employee and former Daimler truck exec Jerome Guillen into the role overseeing all automotive operations and reporting to Musk.
That move, described in a company blog with several other promotions as a result of board and management discussions, gives Musk a seasoned auto industry veteran to lean on at a time when some investors have called for a new chief operating officer. Shares barely moved after hours, when the promotions were announced.
Morton and Toledano, whose departures come shortly after the U.S. Securities and Exchange Commission opened an inquiry into Musk’s aborted privatization plan, join dozens of senior executives who have left Tesla.
“Since I joined Tesla on August 6th, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations. As a result, this caused me to reconsider my future,” Morton said in the filing.
Late on Thursday, Musk was filmed drinking whiskey, briefly smoking marijuana and wielding a Samurai sword during a 2-1/2-hour live Web show with comedian Joe Rogan that swiftly spread across social media.
Taking a puff from a joint, which Rogan said was a blend of tobacco and marijuana and legal in California, Musk said he “almost never” smoked.
“I’m not a regular smoker of weed,” Musk said. “I don’t actually notice any effect … I don’t find that it is very good for productivity.”
It was the latest in a string of unconventional behavior by the billionaire South African native who is also CEO of rocket startup SpaceX.
Even before Musk’s surprise Aug. 7 tweet that he had funding “secured” for a go-private deal, Tesla had been under scrutiny from investors, analysts and short-sellers as it works to hit production targets and slow its cash burn.
Morton, who is walking away from a $ 350,000 base salary and a $ 10 million new-hire stock grant that would vest over four years, said he believed “strongly” in Tesla and that he had no disagreements with the company’s leadership or its financial reporting.
Analysts on Friday reiterated their call for Tesla to bring in another senior leader.
“We have been calling for a co-CEO or COO to assist to codifying the leadership structure and in so doing, the culture at Tesla,” said James Albertine, analyst at brokerage Consumer Edge, speaking before the promotions were announced.
“We think this is further evidence that the time is now for management and the board to address these issues.”
SOBERING EFFECT ON INVESTORS
Tesla’s $ 1.8 billion junk bond maturing in August 2025 plunged as much as 4 cents on the dollar to below 82 cents, a record low, in Friday trading, pushing the yield above 8.8 percent.
Coupled with an upfront cost of 21 percent of insured value, it now costs an investor around $ 280,000 to insure $ 1 million of Tesla debt for a year.
With Tesla’s stock falling to its lowest level since April, short sellers added 810,000 shares to their positions, bringing the total as of Thursday to about 32.6 million shares, according to S3 Partners, a financial technology and analytics firm.
Tesla has told investors it expects to turn a profit in the second half of this year, a forecast the company’s head of investor relations, Martin Viecha, reiterated at a conference earlier this week sponsored by RBC Capital Markets, RBC analyst Joseph Spak wrote in a note on Thursday.
Viecha also restated Tesla’s forecast that it will build 50,000 to 55,000 of its Model 3 sedans in the current quarter, and indicated the company’s working capital will improve as production increases, Spak wrote.
Prominent short-seller Andrew Left has sued Tesla and Musk, saying in his proposed class-action complaint on Thursday that Musk’s issuance of materially false and misleading information related to his abandoned plan harmed both short-sellers and those hoping the stock would rise.
Reporting by Nivedita Balu and Ismail Shakil in Bengaluru, additional reporting by Noel Randewich in San Francisco, Joe White in Detroit and Dan Burns in New York; Writing by Meredith Mazzilli; Editing by Matthew Lewis and Rosalba O’Brien
NEW YORK/HONG KONG (Reuters) – China’s embattled ZTE Corp (0763.HK) has received a temporary reprieve from the U.S. government to conduct business needed to maintain existing networks and equipment as it works toward the lifting of a U.S. supplier ban.
ZTE (000063.SZ), which makes smartphones and networking gear, was forced to cease major operations in April after the United States slapped it with a supplier ban, saying it broke an agreement to discipline executives who conspired to evade U.S. sanctions on Iran and North Korea.
The authorization seen by Reuters from the U.S. Commerce Department’s Bureau of Industry and Services runs from July 2 until Aug. 1.
It allows China’s No.2 telecommunications equipment maker to continue operating existing networks and equipment and provide handset customer support for contracts signed before April 15. It also permits limited transfer of funds to or from ZTE.
On Tuesday, ZTE also announced the departure of 1 senior executive in a stock exchange filing, while a source who saw an internal memo told Reuters seven others were removed. As part of its settlement agreement reached in June with U.S. authorities, ZTE had promised to radically overhaul its management.
The company also agreed to pay a $ 1 billion penalty and put $ 400 million in an escrow account as part of the deal to resume business with U.S. suppliers – which provide almost a third of the components used in ZTE’s equipment.
ZTE said in exchange filings late on Tuesday that Xu Weiyan, a shareholders’ representative supervisor in the company’s supervisory committee, has resigned due to personal commitments with immediate effect and no longer holds any position in the company.
An insider source told Reuters a memo was sent out on Tuesday announcing the removal of seven other executives, without providing a reason. They included vice presidents Wang Keyou, Xie Jiepeng and Ma Jie, who were in charge of the legal, finance and supply chain departments, respectively.
Reuters could not immediately contact them for comment. The source declined to be identified due to the sensitivity of the matter.
As part of the deal to lift the supplier ban, ZTE had agreed to remove all members of its leadership at or above the senior vice president level, along with any executives associated with the wrongdoing within 30 days.
It is not immediately clear whether the eight departures on Tuesday were related to ZTE’s compliance violation.
ZTE announced a new board last week in a radical management shakeup. Li Zixue was appointed the new chairman while the previous board led by Chairman Yin Yimin resigned with immediate effect.
Despite the agreement reached almost a month ago, the ban is yet to be lifted amid strong opposition among some U.S. politicians. ZTE has made the $ 1 billion payment but has yet to deposit the $ 400 million in escrow, according to sources.
The uncertainty over the ban amid intensifying U.S.-China trade tensions has hammered ZTE shares, which have cratered around 60 percent since trading resumed last month following a two-month hiatus, wiping out more than $ 11 billion of the company’s market valuation.
ZTE’s Hong Kong shares were down 0.5 percent on Wednesday, while its Shenzhen shares were up more than 4 percent.
Jefferies on Monday upgraded ZTE to a “buy” rating from “underperform”. Its analyst, Edison Lee, said in a note on Tuesday that the temporary reprieve was “a very positive indication that ZTE is on track to a full lifting of the export ban”.
A representative for ZTE declined to comment. The U.S. Department of Commerce did not respond to requests for comment.
Reporting by Karen Freifeld, Anirban Paul and Sijia Jiang; Writing by Tim Ahmann; Editing by Leslie Adler and Marguerita Choy
MUNICH (Reuters) – Facebook executives are fanning out across Europe this week to address the social media giant’s slow response to abuses on its platform, seeking to avoid further legislation along the lines of a new hate speech law in Germany it says goes too far.
Facebook’s communications and public policy chief used an annual meeting in Munich of some of Europe and Silicon Valley’s tech elite to apologize for failing to do more, earlier, to fight hate speech and foreign influence campaigns on Facebook.
“We have to demonstrate we can bring people together and build stronger communities,” the executive, Elliot Schrage, said of the world’s biggest information-sharing platform, which has more than 2 billion monthly users.
“We have over-invested in building new experiences and under-invested in preventing abuses,” he said in a keynote speech at the DLD Munich conference on Sunday.
In the United States, lawmakers have criticized Facebook for failing to stop Russian operatives using its platform to meddle in the 2016 presidential elections, while Britain’s parliament is looking again at the role such manipulation may have played in Britain’s Brexit vote to leave the European Union.
A German law that took effect at the start of the year requires social networks such as Facebook, Google and Twitter to remove online hate speech or face heavy fines. (reut.rs/2rm6AI2)
“It sets forth the right idea for the relation between government and the private sector but it also goes farther than … we think it should go,” Schrage said of the law.
”At the same time the law places the responsibility on us to be judge and jury and enforcer determining what is legally compliant and not. I think that is a bad idea.
“The challenge is how to define where the violation has been or not,” he said.
By contrast, Schrage praised the approach of the European Union in demanding that internet companies adhere to a code of conduct and respond quickly to requests to take down illegal content rather than being required to make those decisions themselves.
“That’s an example of how we can work with governments to be more responsive to their concerns,” Schrage said of the EU.
The EU has put internet companies on notice that it will legislate if they don’t do a better job self-policing their services for extremist propaganda, hate speech and other abuses. (reut.rs/2DmXGeU)
NO WILD WEST
Far from being a “Wild West of content”, Schrage argued, Facebook’s policies on policing content are far more in line with Europe’s strict boundaries governing hate speech than the anything-goes reputation it has coming from Silicon Valley.
“We are often criticised for being an American company. But our policies with respect to speech and expression are much closer to how the standards have evolved in Europe than they are in the United States,” Schrage said.
“We do not permit hate speech, we do not permit incitement. There is a tremendous amount of content we remove regularly. When we see content related to terrorism, to hate speech, to incitement, we reach out to law enforcement,” he said.
But several tech leaders in the audience said Facebook had long ignored what are effectively editorial responsibilities for policing abusive content on its platform.
Schrage said Facebook now employed thousands of people to monitor content and to work more closely with law enforcement, while automated algorithms detect and delete 99 percent of Islamic State and al Qaeda content before any Facebook users ever see it.
Paul-Bernhard Kallen, chief executive of Hubert Burda Media, one of Germany’s largest publishers, said Facebook has avoided responsibility for moderating content on its platform.
“From my perspective, Facebook is a media company. One way or the other, Facebook should accept it,” Kallen said of taking more control over content or facing regulatory demands to do so.
Facebook Chief Operating Officer Sheryl Sandberg is meeting policymakers in Paris and Brussels, while Schrage is touring Germany. Later this week they will converge on Davos, the annual policy gathering of world politicians, business chiefs, bankers and celebrities taking place in the Swiss Alps.
Facebook founder and chief executive Mark Zuckerberg, who has declared earlier this year that his 2018 goal is to “fix” Facebook, is staying home (reut.rs/2F2w8g6).
Reporting by Eric Auchard and Douglas Busvine in Munich; Editing by Adrian Croft