Earlier this month, SolarCity’s board of directors accepted Tesla’s $2.6 billion acquisition offer. The deal is still subject to SEC review, but otherwise, the agreement will be brought to a Shareholders vote at some point after September 14, 2016 and if all goes well, the merger should close during the fourth quarter.
Now SolarCity announced some restructuring ahead of the Tesla merger. The company will have layoffs and the co-founders, CEO Lyndon Rive and CTO Peter Rive, are giving up their salaries.
The company made the announcement in a SEC filing released today after market close. They said that the measures are “initiatives to realign the Company’s operating expenses to match the Company’s reduced guidance for Megawatts Installed.”
They didn’t disclose the number of people to be let go, but they said that the “restructuring charges” will represent “$3 million to $5 million” and they will consist “primarily of severance benefits”.
While the company is citing its reduced guidance as the reason for the layoffs, it was expected that some roles would overlap by combining Tesla and SolarCity.
Additionally, the company reduced the annual salaries of CEO Lyndon Rive and CTO Peter Rive from $275,000 to $1 per year for their services, which was apparently done at their request and it is effective as of August 16, 2016.
The Rive brothers still own tens of millions worth of SolarCity shares and they have stock compensation plans.
At Tesla, CEO Elon Musk also only accepts a salary of $1 per year, but he also has a generous stock compensation plan.