Former Nikola CEO Trevor Milton is pushing back against the Board of Directors’ recent decision to reject his five director nominees, a move that could signal a potential showdown between the embattled company’s founder and its current leadership.
Milton had nominated Cole Cannon, Derek Johnson, Hans Peterson, Paul Southam, and Dave Sparks, known for his HeavyD YouTube channel, to join Nikola’s Board of Directors. However, the current Board swiftly rejected these nominations, citing concerns over the nominees’ lack of experience in public companies and their perceived lack of relevant skills.
See also: Nikola Rejects Director Nominees Backed by Trevor Milton
“The director nominees have no public company experience, add no skills or experience to the board, and indisputably lack the depth of experience that the current Nikola board members bring to the Company. Additionally, it is the Company’s belief that the director nominees lack the expertise or knowledge needed to navigate the complexities of a zero-emissions trucking and energy infrastructure business,” Nikola’s current Board stated.
In response, M&M Residual, LLC, an entity connected to Milton, along with its affiliates, argued that Milton’s nominees should be given a fair consideration. The shareholder group, which owns approximately 4.5% of Nikola stock, believes that Milton’s selections could help the company address its challenges and create value for shareholders.
“Since taking over as Chair in 2020, CEO Steve Girsky and his Board have overseen a staggering and consistent decline in Nikola’s stock from $30+ per share to a delisting Nasdaq price of less than seventy cents per share… For approximately four years now, the Board has overseen operational underperformance, value destructive acquisitions, the breakdown of the Iveco Group-Nikola partnership, the loss of meaningful European market share and the sale of key assets while taking on debt. These actions (among other concerning missteps surrounding safety and disclosures) have resulted in the destruction of nearly 100% of stockholder value,” the shareholder group highlighted.
See also: Nikola Appoints Carla Tully, Energy and Infrastructure Expert, to Board of Directors
The group also claimed that it had been approached by numerous stockholders who shared their concerns about Nikola’s current leadership. M&M Residual, LLC, and its affiliates asserted that Milton’s nominees have already begun working on an operational strategy to enhance the company’s performance.
“Our Group has been approached by numerous stockholders who want to see CEO Steve Girsky and his Board replaced with high-integrity individuals. This is a reasonable request, especially considering Nikola recently disclosed that substantial doubt exists regarding its ability to continue as a going concern through the next 12 months… In stark contrast to the current Board, our independent slate includes proven founders and executives who collectively possess the operational, supply chain, and electric vehicle experience that we believe will be required to initiate a value-enhancing turnaround at Nikola. Our five-member slate has already begun working on an operating strategy that considers the interests of stockholders, employees, partners, and customers,” the shareholder group stated.
The battle between Milton and Nikola’s Board of Directors underscores the challenges facing the company as it seeks to regain investor confidence and navigate the rapidly evolving electric vehicle industry. With both sides digging in their heels, the future direction of Nikola remains uncertain.
