Nikola Rejects Dissident Board Nominees Proposed by Founder's Entity

Nikola stated on Friday that it has turned down the five "dissident" nominees to its eight-member board of directors, put forward by M&M Residual LLC, the entity of the hydrogen- and electric-truck maker's founder, 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," Nikola’s board said in a statement.

"Milton is separated from the Company entirely and has had zero involvement in Nikola’s day-to-day operations since September of 2020; however, Nikola continues to suffer harm created by Mr. Milton’s business decisions from over three years ago in his role as founder and executive chairman," Nikola added.

Nikola pointed out that Milton's M&M Residual holds 51.05 million Nikola shares NKLA, +1.59%, representing 4.4% of the outstanding shares, making Milton the third-largest shareholder, according to FactSet data.

Nikola’s stock, which has closed below the key $1 level since Dec. 5, saw a 0.6% rise in premarket trading. It has plummeted 70.7% over the past 12 months through Thursday, and dropped 96.5% since the end of September 2020.

The company also highlighted Milton’s criminal convictions, stating that he has been convicted of one count of securities fraud and two counts of wire fraud, receiving a 48-month prison sentence on January 17, 2024.

Despite an arbitration ruling against Milton in October 2023, Nikola mentioned that he was found liable and ordered to pay $165 million to the company, but the judgment remains unpaid.

Nikola reiterated its confidence in its current board, describing them as a "diverse group" of experts in their respective fields, ranging from trucking, energy technology startups, to customer service.

"In short, the hydrogen ecosystem is a series of complex systems that require complex answers," the company said. "Nikola’s board of directors has the expertise and experience necessary for the Company’s success, and our team stands firmly behind them."

Source: EVMagz

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