Nikola Rejects Board Nominees From Founder Milton
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Nikola Corp. rejected a slate of nominees for its board of directors proposed by an entity it said was controlled by founder Trevor Milton, arguing none were fit for the role.
Milton, sentenced to four years in prison Dec. 18, nominated a slate of five directors for Nikola’s eight-member board: Cole Cannon, Derek Johnson, Hans Peterson, Paul Southam and Dave Sparks.
The five men were nominated by Milton-controlled M&M Residual, the company said.
Nikola said the “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.”
“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,” it added.
The two highest-profile nominees are Sparks and Cannon.
Sparks was previously involved in promoting Nikola’s abandoned Milton-era Badger hydrogen fuel cell electric vehicle pickup project and owns custom truck builder Sparks Motors, online engine and truck marketplace DieselSellerz and truck maintenance shop Sparks Motor Garage.
But Sparks is more commonly known by his “Heavy D” reality television and social media personality. He is half of the Diesel Brothers, whose eponymous reality TV show ran for eight seasons on Discovery Channel.
Describing himself as an entrepreneur, Sparks also has a YouTube channel with 3.55 million subscribers whose introductory paragraph reads: “Do you wanna see the real side and personal lives of Heavy D and Diesel Dave from Diesel Brothers and experience some of the wildest vehicles, stunts, and pranks the world has ever seen? … if your answer is no, go follow Dr Phil, if your answer is yes … hit that SUBSCRIBE button now!”
Cannon, meanwhile, is a lawyer and real estate developer with the Instagram handle “cole_the_law_father,” representing clients in Arizona, California and his home state of Utah. Cannon’s LinkedIn profile details his “Specialties” as “cleaning up corporate messes.”
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The founder of Cannon Law Group, Cannon’s biography on the law firm’s website says that he “loves business first and the law second. The law is a means to achieve his clients’ business needs,” and “Mr. Cannon enjoys outrageous adventures with his lovely wife and six kids. … Mr. Cannon’s mantra can well be summarized by the following adage: ‘Live like you’ll die tomorrow, learn like you’ll live forever.’”
Sparks and his fellow reality television personality David “Diesel Dave” Kiley — the other half of the Diesel Brothers — were represented by Cannon in a violation of clean air standards court case they lost, according to court documents.
Kiley and Sparks also lost a trademark infringement court case in the U.S. District Court for the Southern District of New York in September and now owe Italian fashion brand Diesel $11.8 million.
The board currently comprises CEO Steve Girsky, a former General Motors executive; former Nextel CEO and Chief Financial Officer Steve Shindler; ex-Hub Group and Schneider National executive John Vesco; Detroit Manufacturing Systems CEO Bruce Smith; and Mary Petrovich, operating executive at private equity behemoth The Carlyle Group.
Also, hydrogen production developer Fortescue Future Industries’ top North American executive Andrew Vesey; ex-TravelCenters of America CEO Jonathan Pertchik; and, engineering group Robert Bosch North America President Michael Mansuetti.
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Nikola also sought to stress that Milton, currently appealing his sentence, had had his time and was no longer part of the company’s story. “Milton is separated from the company entirely and has had zero involvement in Nikola’s day-to-day operations since September of 2020,” it said.
However, this is the second time in the past 12 months that Milton, who owns 4.4% of Nikola, has sought to change the company’s direction. In June, Milton called for new leadership at the company.
At the time, Nikola said Milton was violating agreements inked upon his exit from the company.
“He agreed to vote in favor of the directors nominated by the board and not to solicit others to vote against any director or other proposal,” it said.
Since his exit, Milton was charged with securities and wire fraud by federal prosecutors in July 2021, charges he was convicted of in October 2022.
Milton was also on the losing side in an arbitration case brought by Nikola. He currently owes the company $165 million plus interest, which it said it is “vigorously seeking all legal avenues to recover monies owed to the company by Mr. Milton.”
In the meantime, Nikola will report fourth-quarter and full-year earnings Feb. 22.
Phoenix-based Nikola saw its cash on hand dwindle in recent quarters, but, after a change in Delaware corporation law, it was able to raise $124.5 million in August through the sale of convertible notes that will aid its liquidity.
