GM robotaxi and autonomous vehicle subsidiary Cruise, facing a mounting series of challenges, announced restrictions to the equity program it offers its employees.
As Reuters reported, CEO Kyle Vogt informed the company’s personnel via email that the equity program would be suspended beginning with the fourth quarter (Q4) of 2023.  Two days later, Vogt apologized to the company’s staff about the situation, and said that a new tender offer would be offered for employees to sell a certain amount of shares in a limited-time opportunity, after employees voiced concerns over tax obligations.
Kyle Vogt then resigned as Cruise CEO.
The equity program previously enabled employees to cash out shares they received part of their compensation. The General offered an equity buyback every quarter during which it would repurchase shares if the holders desired. The shares are not traded on the public stock exchanges, so selling them back to GM is currently the only way for their holders to profit from owning them.
With the Q4 buyback suspended, Cruise workers had no way to cash out shares already in their possession, and some employees were now left with up to $100,000 worth of shares in limbo. However, the company partly reversed course, providing some restricted stock unit liquidity to mitigate potential tax obligations.
Vogt noted that recent problems encountered by his company have “pushed out our commercialization and revenue generation timelines” into the future. Investors are starting to express doubt over the viability of GM’s self-driving vehicle division, which has lost $8 billion since its 2017 inception and has only approximately $1.7 billion left to fund ongoing operations.
Cruise has also completely stopped its driverless tax service at all U.S. locations. The halt now includes rides with a human “safety driver” in the vehicle. The service described the operational cessation as an “orderly pause,” stating it intends to “rebuild public trust while we undergo a full safety review.”
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Comments
Only winner here is MARY BARRA. She got her huge bonus payout even after doing a terrible job on all new future businesses
That 100K could go to zero.
Sad .