Both the co-founders of SolarCity have requested to slash their salaries on account of cost control measures
It seems that Chairman Elon Musk is really concerned about bringing a change in SolarCity Corp(NASDAQ:SCTY), along with two of his cousins. This is why both Lyndon Rive and Peter Rive have decided that if SolarCity is to post profits, they will be the ones who begin efforts for it.
Both the brothers requested their salaries to be reduced from $275000 to $1, which the compensation committee accepted rightfully. The recent move is an effort towards the cost cutting measures that will be undertaken by the company, so as to minimize its losses and turn into profits in the most optimal scenario.
The Country Caller has discussed the recent quarter’s financial results of the company, in which we said that control measures are important if the company is to survive in the future. The reported operating costs for the recent quarter stood at $265.4 million, from $175.8 million a year ago. That being said, it seems that billionaire Elon Musk has also realized that its high time to fix up issues in the company. Change coming from the top is a good sign as probability of success increases with such acts.
While such gestures by the management shall be beneficial for SolarCity, it may also help to create a positive sentiment among shareholders of Tesla Motors. The general perception is that the recent deal is not considered fruitful, provided how both the companies are running into losses and SolarCity would only add up to Tesla’s financial burden. Such measures by the top management may just send a message that Mr. Musk is determined to bring a transition in the renewal energy company too.
So far, we have not seen a positive response by investors on this development, as both Tesla and SolarCity reported a net decrease in yesterday’s session. Let’s see if we can see a positive response in today’s session