- Nikola Corporation (NASDAQ: NKLA) founder Trevor Milton announced he is stepping down as executive chairman and board member of the company
Last night, Nikola Corporation (NASDAQ: NKLA) founder Trevor Milton announced he is stepping down as executive chairman and board member of the company. Here is what Milton wrote in a letter to the board:
“During the last few weeks, Nikola’s shareholders and partners have rallied around Nikola and our employees and I can’t thank them enough for that. The company is in amazing hands, and the executive team is well-equipped to lead the company into the future. When you build a team as a leader, you have to remember that you are the least important person. You have to hire smarter people than yourself and remember that the company’s mission is greater than you are. I’m proud that what started out in my basement with just a couple employees became a headquarters filled with over 400 diverse families.
I asked the Board of Directors to let me step aside from my roles as Executive Chairman and a member of the Nikola Board of Directors. The focus should be on the company and its world-changing mission, not me. I intend to defend myself against false allegations leveled against me by outside detractors.
I know many of you have put a lot of your energy into supporting Nikola and I hope you follow me in continuing to do so. I will be cheering from the sidelines with you now. The company is incredible, the mission is too important and the future willing and ready for your support.
I want to thank the incredible people from around the world that followed me and supported our cause to leave this earth a little better than we found it. You are 1.00784 in a million and true champions. I will continue to spread love everywhere I go and hope you do as well — for blessed are the peacemakers.
Your greatest fan,
Trevor Milton”
About a couple of weeks ago, activist short-seller Hindenberg Research published an extensive report claiming Nikola’s claims around its operations were false. And Hindenberg raised about 53 questions for the company.
Several days later, Nikola issued a release saying that Hindenberg Research’s report was “false and defamatory.” Now the SEC is examining Hindenberg’s claims and Nikola said it is working with the SEC to fully cooperate with the inquiry. The Justice Department is also involved in the inquiry.
Upon Milton’s resignation, Hindenberg Research wrote a tweet saying: “We think this is just the beginning.”
Nikola said that Milton will be making himself “reasonably available to provide consulting services” and will assist Nikola as “reasonably requested” by the board through the end of 2020.
In an 8-K filing, it was also revealed that Milton agreed to relinquish 100% of the 4.859 million performance-based stock units granted on August 21 and the right to enter into a two-year consulting agreement with an annual fee of $10 million. Over 3 years (Standstill Period), Milton also agreed to not buy over 19 million shares of the company’s outstanding common stock; propose or effect any extraordinary transaction with respect to the company; solicit any proxy for election or removal of directors to the board, seek representation on the board; or submit any stockholder proposal.
And Milton also agreed to vote his shares of the company’s common stock in favor of the slate of directors recommended by the Board at any meeting of the stockholders of the Company and against the election of any nominee for a director not recommended and nominated by the Board for election at such meeting.
On September 20, 2020, the Nikola Board elected Stephen Girsky, a member of the Board, as Chairman of the Board.
Disclosure: I own a small number of Nikola shares in my portfolio
