[ad_1]
Lordstown Motors has hired a new CEO, Daniel Ninivaggi, just two months after its former CEO and founder resigned after misleading investors. Ninivaggi comes from the automotive industry and recently completed a seven-year term as a member of the board of directors of Hertz, where he helped oversee the very public bankruptcy and restructuring of the car rental company.
This experience could be useful. Lordstown Motors needs someone at the helm who can lead the business through the adversity that lies ahead – including, primarily, surviving past the start of 2022, when the startup says it will expects to deliver its first electric vans and when it also runs out of money unless it finds new funding. But Lordstown Motors’ struggles since its SPAC merger at the end of 2020 have also unfolded under an intense spotlight, something Ninivaggi seems to have gained some experience with at Hertz.
Hertz was in crisis mode during the first months of the COVID-19 pandemic, in large part because it had borrowed heavily against its fleet of cars. As the markets went down, the company’s lenders got nervous and started thinking about seizing these cars in order to get back what they were owed. In response, Hertz filed for bankruptcy.
That’s when the real quirk began. Hertz has become the darling of the burgeoning population of retail traders, including those who have been IPOed by apps like Robinhood as well as those who spend their time obsessed with the information shared in the sub-reddit r / WallStreetBets. People were buying Hertz shares left and right after bankruptcy, even though there was almost no chance that the shares they were trading were worth anything when the company was finally restructured.
In other words, Hertz was a storehouse of memes before this term became part of our common lexicon. And the company tried to profit from it by trying to sell even Following shares straight to these enthusiastic retail traders, though a judge quickly cut them off.
As all of this was going on, Hertz’s largest shareholder cut the bait and pulled out: billionaire Carl Icahn sold his company’s stake in Hertz in mid-2020. But Ninivaggi – one of Icahn’s former executives – remained on Hertz’s board. The company finally came out of bankruptcy this year and, to the surprise of many, regular retail shareholders actually got something in return after all.
Ninivaggi has other automotive experience beyond Hertz, primarily in companies that are deeply rooted in the supply chain. Whether or not Lordstown Motors is drawn to that either, or Ninivaggi’s experience with Hertz’s roller coaster year, the cash-strapped startup is paying generously to run the show. He will earn an annual salary of $ 750,000 and is eligible for an annual bonus of nearly $ 1 million, according to a filing with the Securities and Exchange Commission (SEC), and received a package of shares from the company with a current value of approximately $ 4.6 million.
In return, he will have to help the startup put its electric van into production, raise more money (including monitoring the company’s plan to rent space in its factory), then compete in one more field. in addition to crowded with electric vans. trucks. All this while facing the Justice Department and SEC investigations that were started by the misdeeds of his predecessor.
[ad_2]
Source link