Lordstown Motors taps Hertz board member to right the ship
Lordstown Motors has hired a new CEO, Daniel Ninivaggi, just two months after its previous chief executive and founder resigned after misleading investors. Ninivaggi comes from an automotive background and recently wrapped up a seven-year stint as a member of Hertz’s board of directors, where he helped oversee the rental car company’s very public bankruptcy and restructuring.
That experience could come in handy. Lordstown Motors needs someone at the helm who can steer the company through the adversity that lies ahead — including, mainly, surviving past early 2022, which is when the startup says it expects to deliver its first electric pickup trucks and when it will also run out of money unless it finds new funding. But Lordstown Motors’ struggles since its late 2020 SPAC merger have also played out under an intense spotlight, something that Ninivaggi appears to have gained some experience with at Hertz.
Hertz was in crisis mode during the early months of the COVID-19 pandemic, in large part because it had borrowed heavily against its fleet of cars. As the markets dipped, the company’s lenders got jittery and started thinking about seizing those cars in order to recoup what they were owed. In response, Hertz filed for bankruptcy.
That’s when the real weirdness started. Hertz became a darling of the booming population of retail traders, including those who had been introduced to the stock market by apps like Robinhood as well as those who spend their time obsessing over information shared in the r/WallStreetBets subreddit. People were buying Hertz stock left and right, post-bankruptcy, despite there being almost no chance that the shares they were trading would be worth anything when the company was eventually restructured.
In other words, Hertz was a meme stock before that term became part of our shared lexicon. And the company tried to take advantage of this by attempting to sell even more shares directly to those eager retail traders, though a judge quickly cut them off.
As all this was happening, Hertz’s largest shareholder cut bait and backed 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 eventually emerged from 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, mostly at companies that are deep in the supply chain. Whether or not Lordstown Motors was more attracted to that, or to Ninivaggi’s experience with Hertz’s rollercoaster year, the cash-strapped startup is paying handsomely to have him run the show. He’ll make an annual salary of $750,000 and is eligible for a yearly bonus of nearly $1 million, according to a filing with the Securities and Exchange Commission (SEC), and was given a company stock package currently worth around $4.6 million.
In return, he’ll have to help the startup get its electric pickup truck into production, raise more money (including following up on the company’s plan to rent out space at its factory), and then compete in an increasingly crowded field of electric pickup trucks. All this while facing down investigations from the Department of Justice and SEC that were kicked off by his predecessor’s misdeeds.
Lordstown Motors has hired a new CEO, Daniel Ninivaggi, just two months after its previous chief executive and founder resigned after misleading investors. Ninivaggi comes from an automotive background and recently wrapped up a seven-year stint as a member of Hertz’s board of directors, where he helped oversee the rental…
Recent Posts
- Dell leak details next-gen Windows on Arm chips, 29-hour laptops, and more
- Canon’s flagship EOS R1 is finally official, and it will have never-before-seen power
- Tado adds Matter to new smart heating range
- Google now offers ‘web’ search — and an AI opt-out button
- Ayn’s new gaming handheld looks like a PSP, and it might just fill the hole in your heart left by Sony’s best portable
Archives
- May 2024
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- December 2011