On Thursday, Cruise abruptly ended a program allowing employees and alumni to sell company stock back to its corporate parent, General Motors. Both current and former workers were informed in a company-wide email sent around 9 a.m. Pacific Time.
As part of their total compensation, Cruise employees would receive some cash salary and also would receive another portion as company stock. Each quarter, stockholders had the option to sell shares back to GM.
The so-called “Recurring Liquidity Opportunity,” or RLO, was implemented in the wake of the departure of Cruise’s previous CEO. Former Cruise employees have told Forbes that they understood that it was meant to shore up company morale in 2022 and demonstrate to the company’s workforce that GM backed Cruise so much that it was willing to be a regular private buyer of the stock.
“This is leaving many of us in the lurch for expected equity capital,” a former Cruise employee, who said they have significant holdings in Cruise stock, told Forbes. “Right now, my shares are worthless.”
“Active employees are getting the worse deal,” they added. “It’s leaving them with a tax burden that they can’t pay off because they can’t sell their equity.”
Cruise confirmed that the RLO has ended but declined to answer questions about what that means for employees.
Got a tip about Cruise? Reach Cyrus Farivar via text / Signal / WhatsApp at +1-341-758-0888 or email [email protected].
“GM and Cruise are working together on what competitive compensation packages at Cruise will look like going forward,” Aaron Mclear, a Cruise spokesperson, emailed Forbes.
The discontinuation of Cruise’s RLO program comes amid an ongoing crisis at the company. On October 2, a Cruise car hit and dragged a San Francisco pedestrian who had been struck earlier by another car. The incident led to the California DMV yanking Cruise’s operating permit in its home state and largest market, stating that its vehicles are “not safe for the public’s operation” and pose “an unreasonable risk to the public.” Days later, the company voluntarily shut down its entire fleet nationwide, halting deployments in Arizona and Texas. Earlier this month, according to audio leaked to Forbes from an all-hands meeting, CEO Kyle Vogt confirmed that staff layoffs were coming.
Cruise’s board of directors held a regularly-scheduled meeting at the company’s San Francisco headquarters this past Monday. Following that meeting, the company put out a series of announcements indicating that it would “further steps to enhance safety and transparency,” including hiring a new executive and expanding its outside investigation into the circumstances of its fateful October 2 incident.
In an emailed statement sent by GM spokesperson Faryl Ury, the company said it “believe[s] strongly in Cruise’s mission.”
“Safety has to be our top priority, and we fully support the actions that Cruise leadership is taking to ensure that it is putting safety first and building trust and credibility with government partners, regulators, and the broader community,” she wrote. “Our commitment to Cruise with the goal of commercialization remains steadfast.”
MORE FROM FORBES
Read the full article here
