Meet Tesla's McKinsey-groomed, newly minted millennial CFO

SAN FRANCISCO -- Zach Kirkhorn landed his first job out of school with McKinsey & Co. and joined Tesla Inc. while still in his mid-20s. He’s now about to take over a finance department that’s been through months of tumult.

Kirkhorn, 34, will become CFO of the electric-car maker after a few months more grooming by his predecessor, Deepak Ahuja. CEO Elon Musk revealed the shakeup in the closing minutes of Tesla’s earnings called Wednesday, and the surprise announcement sent the shares tumbling as much as 5.9 percent on after-hours trading. The move even surprised one of Tesla's most bullish analysts, raising new questions about the company's senior management. 

Tesla saw a wave of executive departures in 2018 that hit the finance team particularly hard. Chief Accounting Officer Dave Morton resigned in September after less than a month. Justin McAnear, vice president of worldwide finance, left in October.

Ahuja, 56, retired in 2015 but returned in 2017 when his successor, Jason Wheeler, announced he’d quit after just 15 months. He plans to go back into retirement after a few months and continue to serve as a senior adviser, probably for several years, according to Musk.

In a tweet, the billionaire thanked the retiring executive and wished him happiness.

The CEO joked on the call that he didn’t think the few years Kirkhorn spent at Harvard Business School were necessary (he earned his MBA in 2013). While he’ll rank among the youngest CFOs at major U.S. companies, he has a few years on David Knopf, who took over the role for Kraft Heinz Co. at 29 in 2017.

“Zach’s incredibly talented and has made a huge contribution to Tesla over the years,” Musk said, adding that his new CFO was “a very well-known quantity to the whole team and has the respect of the whole team.”

Tesla shares ended 3.8 percent higher on Wednesday, gaining the most in three weeks. Those gains reversed in extended trading after the earnings and CFO announcements. The stock was down 5.1 percent to $293 early Thursday in New York.

While the company came up short of analysts’ estimates for fourth-quarter profit, it posted $910 million in free cash flow. Musk also assured investors Tesla will be able to “comfortably” pay off a $920 million convertible bond maturing in March.

“I feel we’re starting 2019 with a very strong financial foundation,” Kirkhorn said. “We have enough cash to continue launching new programs and developing new technologies, and we’re able to service upcoming debt obligations with our forecasted cash flows.”

Baird analyst Ben Kallo, one of the most bullish stock analysts covering Tesla who projects the stock will reach $465 a share, said he was surprised by the CFO change.

"The CFO transition took us by surprise, though we believe Deepak’s retirement reflects the grueling pace at TSLA and is not indicative of expected future financial performance," he wrote in a report emailed early Thursday. "Deepak will remain with TSLA for several months as Zach Kirkhorn transitions to the role."

Said Michael Dean, an analyst with Bloomberg Intelligence: "The CFO’s surprise retirement just adds to a wave" of recent departures.

Automotive News contributed to this report.