Lordstown Motors, which former President Donald Trump loved, has been on the fritz for weeks now, and it said last week that it wasn’t sure if it would keep on as a “going concern.” It said Monday that its CEO and CFO had resigned.
Lordstown also said on Monday that it was still transitioning to the “commercial production phase of its business,” which seems a little bold because that is the part that seems most dubious.
To that end, Lordstown Motors Lead Independent Director Angela Strand has been appointed Executive Chairwoman of the Company, and will oversee the organization’s transition until a permanent CEO is identified, and Becky Roof, will serve as Interim Chief Financial Officer. Steve Burns has resigned as Chief Executive Officer and from the Company’s Board of Directors, and Chief Financial Officer Julio Rodriguez has also resigned. All changes are effective immediately and the Company has engaged an executive search firm to identify a permanent CEO and CFO.
On behalf of the Board of Directors, David Hamamoto stated, “Lordstown Motors has achieved significant milestones on the path to developing the first and best full-size all-electric pickup truck, the Lordstown Endurance. We thank Steve Burns for his passion and commitment to the company. As we transition to the commercial stage of our business – with planned commencement of limited production in late-September – we have to put in place a seasoned management team with deep experience leading and operating publicly-listed OEM companies. We have complete confidence in Angela and Becky, and our expanded leadership team, to effectively guide the company during this interim period.”
Lordstown’s stock nosedived after the news, down about 20 percent as of this writing, which is predictable though also understandable, as the news coming out of Lordstown has been consistently bad for a while.
Of course, both the outgoing and incoming leadership are well-compensated. From a filing with the Securities and Exchange Commission dated Sunday (emphasis mine):
In connection with Ms. Roof’s appointment as the Company’s Interim Chief Financial Officer, the Company entered into an Agreement for Interim Management Services (the “Management Services Agreement”) with AP Services, LLC, a subsidiary of AlixPartners. The Management Services Agreement provides that Ms. Roof will serve as the Company’s Interim Chief Financial Officer at a rate of approximately $1,200 per hour, and also calls for the engagement of other AlixPartners staff as requested by the Company at various rates set forth therein.
In connection with the separations of Mr. Burns and Mr. Rodriguez, the Company and each of Mr. Burns and Mr. Rodriguez entered into Separation and Release Agreements. Mr. Burns’ Separation and Release Agreement provides for continued base salary payments for a period of 18 months in the aggregate amount of $750,000. Mr. Rodriguez’ Separation and Release Agreement provides for continued base salary payments for a period of six months in the aggregate amount of $200,000 and continued vesting of certain outstanding stock options with an exercise price per share equal to $1.79 that are scheduled to vest in November 2021.
Nice work if you can get it, I guess.