SolarCity Slashing Costs, Including CEO Pay
SolarCity Corp. on Wednesday said it would cut operating costs, including slashing its chief executive's salary, to bring expenses in line with its reduced solar installation outlook.
The company said Chief Executive Officer Lyndon Rive and his brother, Chief Technology Officer Peter Rive, had asked to have their annual salaries reduced to $1 from $275,000, as part of the company's cost-cutting plans.
Earlier this month, San Mateo, Calif.-based Solar City said it accepted Tesla Motors Inc.'s $2.6 billion buyout offer.
The compensation committee of the company's board of directors agreed to reduce the salaries, SolarCity said in a regulatory filing.
"It's a symbolic gesture, but it's appropriate," Raymond James analyst Pavel Molchanov said.
The Rives' move comes a week after Chief Executive Officer Tom Werner of rival solar company SunPower Corp., said he would reduce his salary and bonus to $1 for the rest of the year as part of a broader restructuring.
SolarCity will incur restructuring charges of about $3 million to $5 million, mostly in the second half of this year. Most of the spending will be on severance benefits.
SolarCity did not immediately respond to requests for further details on the restructuring plan.
Earlier this month, SolarCity cut its 2016 installation forecast for the second time, citing lower residential bookings in the first half. The company said late last year that it would slow its pace of growth to focus on generating cash. Investors have punished the company's stock, sending it down 60 percent since December.
In a separate filing, SolarCity said it planned to issue $124 million in bonds. The bonds carry a 6.5 percent interest rate, higher than any of SolarCity's previous offerings, and also have a longer maturity rate of 18 months.
(By Nichola Groom; Additional reporting by Sai Sachin R in Bengaluru; Editing by David Gregorio)