Tesla cofounder's advice to managers facing ultimatums from their engineers? 'March them to the door'

• Tesla cofounder Martin Eberhard said that engineers in the past had demanded more money or stock during critical moments.
• "If you have an employee do that to you, frog march them to the door," he told YouTuber Kim Java.
• Eberhard said that he wishes he were "more careful" about who he hired.

Tesla cofounder Martin Eberhard wishes he'd canned engineers who'd given him compensation ultimatums during crunch time.

Having led Tesla through its early creation and the prototyping of the Roadster, Eberhard is ingrained in the electric vehicle company's history. He famously had a falling out with current CEO Elon Musk, later suing and settling a lawsuit related to the EV maker's founding story.

On her YouTube show, Kim Java asked Eberhard what advice he'd give to his younger self.

Eberhard described a different kind of tension — describing times in which an unnamed engineer would seek to exercise leverage at a critical moment — and said that he would be "more careful" about who he hired.

"There's been a couple times in my career, both at Tesla and at NuvoMedia, where a key engineer of mine approached me at a time where it's absolutely critical schedule, critical program has to get working, and basically blackmailed me," Eberhard said.

Before his Tesla tenure, Eberhard cofounded and led NuvoMedia in the late 1990s. The company created the Rocket eBook, one of the early e-readers. In 2000, NuvoMedia and its Rocketbook were purchased by the now-defunct Gemstar-TV Guide for $187 million.

According to Eberhard, these engineers at Tesla and NuvoMedia said, "If you don't give me more stock and more money, I'm going to walk."

"My advice to anybody who's in that situation, if you have an employee do that to you, frog march them to the door," he said.

Eberhard said there should be no exceptions: "That's the end. I don't care how important they are to your program, they go. I didn't, I caved."

The Tesla cofounder's advice highlights the tensions that can arise between executives and employees over compensation negotiations, and the role expertise and leverage often play in them.

Eberhard's hardline view of how to handle such talks shows that employees choosing to draw a line in the sand and threaten to quit shouldn't be surprised if an executive decides to part ways instead.

When Eberhard left Tesla in 2007, he owned less than 5% of the company's stock. In 2023, he told Business Insider in an interview that he sold much of his stock early, which "in hindsight was maybe not the ideal thing to do, but that's what I did."

On Java's show, Eberhard said that he held "not a lot, but some" Tesla stock. "I'm not a bajillionaire, but I'm fine," he said.

After jumping between vehicle companies for over a decade post-Tesla, Eberhard is now retired. He seems to be liking it: Eberhard's LinkedIn job title is currently "Enjoying Life."