- Company to take charge of up to $5 million for severance costs
- SolarCity agreed this month to be acquired by Tesla Motors
SolarCity Corp. co-founders Lyndon Rive and Peter Rive agreed to cut their salaries as the biggest U.S. rooftop solar company fires an unspecified number of workers to adapt to slowing demand.
The Rive brothers, cousins to billionaire Elon Musk, will get $1 a year, down from $275,000 each, according to a company filing. San Mateo, California-based SolarCity is also taking a charge of $3 million to $5 million for severance costs, mostly in the second half.
The moves are part of an effort to “realign” expenses, according to the filing, and come as SolarCity pursues shareholder approval to be sold to Musk’s Tesla Motors Inc. for about $2.6 billion. The solar company said last week it expects to install 170 megawatts of panels in the current quarter, down from 201 megawatts in the second quarter. It posted another unprofitable quarter and said its debt had increased to $3.35 billion.
The salary cuts are “a symbolic move, an appropriate one in my view, but still mostly symbolism,” Pavel Molchanov, an analyst at Raymond James Financial Inc., said in an e-mailed response to questions Thursday. “The layoffs are not at all surprising.”
In addition to their salaries, Chief Executive Officer Lyndon, 39, earned $98.3 million in non-cash compensation last year, and Chief Technology Officer Peter, 42, earned $65.5 million in non-cash pay, according to data compiled by Bloomberg.
They join SunPower Corp. CEO Tom Werner, who last week accepted the legal minimum salary of $1 a year. The second-biggest U.S. solar panel producer is cutting about 15 percent of its workforce and closing a factory in the Philippines in response to slower growth in the solar industry.