Elon Musk Asked A Top Tesla Executive To Forfeit Unvested Equity Awards And He Promptly Quit: Report

Zinger Key Points
  • Tesla's Elon Musk was worried that some of the employees were making more money than their contributions deserved.
  • Musk reportedly asked one of his once high-profile executive to give up on unvested equity awards.

Multiple reports and testimonies have painted Tesla, Inc. TSLA CEO Elon Musk as a tough taskmaster and an exacting leader. A Wall Street Journal report on Friday discussed the events that led up to the departure of one of the key deputies of the billionaire in 2021.

What Happened: Jerome Guillen, who was with Tesla for about a decade and rose in the ranks to become the leader overseeing the company’s car division, quit in June 2021.

While he was with Tesla, the French auto industry executive was rewarded with equity grants, and by the end of 2020, his unvested equity in Tesla was valued at about $600 million, the Journal said, citing data from an Equilar Inc. analysis. As cracks appeared in the relationship between Musk and Guillen, the former asked him to forfeit some of his unvested equity, WSJ said, citing people familiar with the matter. Shortly after this, the executive quit.

See also: Elon Musk's 'Golden Child' Tesla At Crossroads, Rivian Flags Spending Cut, Lucid Strikes Funding Deals And More: Week's Biggest EV Stories

Musk Concerned About Overpaying: Although what happened in the interim hasn’t been disclosed publicly, the Tesla CEO was worried that some employees are making more money from the company than their contributions merited, the report said.

Tesla executives are compensated predominantly with stock awards. Several controversies at the company over the years have their roots traced back to employee stock options, WSJ noted. This included Musk’s dispute with Tesla co-founder Martin Eberhard, who sued Musk and the company in 2009 over revoking 250,000 stock options he owned.

About 40 former Tesla employees had once sued the company for wrongfully disallowing them to vest stock options.

In Guillen’s case, he joined Tesla in 2010 from the then-Daimler AG, which is now part of Mercedes-Benz Group AG MBGAF. He reportedly made important contributions when Tesla was struggling with the production of the Model 3 vehicle in 2018. In recognition of his role amid the crisis, he was promoted to president, overseeing the automotive division.

The relationship between Musk and Guillen soured, especially amid COVID-19, when the Fremont factory went into lockdown. The billionaire was unhappy with the speed at which Tesla was prepping to restart production, the report said. By the spring of 2021, Guillen was demoted to overseeing efforts to produce a semitrailer truck and was asked to forfeit his unvested equity. He reportedly refused to do so and then quit.

Read also: How Did Elon Musk Make His Money

Originally published on Nov. 13, 2022.

Market News and Data brought to you by Benzinga APIs
Posted In: NewsMediaelectric vehiclesElon MuskICYMI
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!