Lordstown Motors Shores Up Executive Team with Stock Distribution
LORDSTOWN, Ohio – Electric-vehicle manufacturer Lordstown Motors Corp. has firmed up its new executive team by distributing 1.7 million shares of Class A common stock to its top officers – incentives the company says are important to retaining key people needed to turn the company around.
The EV startup also has engaged turn-around consulting firm AP Services LLC, a subsidiary of AlixPartners LLP, to manage the business affairs of the company on an interim basis.
According to documents filed June 15 with the U.S. Securities and Exchange Commission, most of the stock distributions occurred June 13, the same day the company’s two top executives, CEO Steve Burns and Chief Financial Officer Julio Rodriguez, resigned.
Lordstown Motors named Angela Strand as executive chairwoman to replace Burns until a new CEO could be found. Becky Roof was named interim chief financial officer, and Jane Ritson-Parsons was appointed chief operating officer.
This morning the company announced that John R. Whitcomb has been named vice president, global commercial operations, effective June 21. Most recently he served as managing director, global automotive and mobility at Ernst & Young LLP. Previously he was director, global retail & sales technology at General Motors.
In the newly created role, Whitcomb will develop the strategic business model for Lordstown Motors’ sales and service footprint, “working alongside the team to establish a national sales network,” the company said.
The management changes were in the works days before the resignations of Burns and Rodriguez were announced Monday, documents show. Exhibits attached to June 13 regulatory filing include an agreement between Lordstown Motors and AP Services that was negotiated on June 8.
Roof, Lordstown Motors’ new interim CFO, has been a managing director at AP Services’ parent, AlixPartners, since 2000. Under the agreement, Roof is to be paid $1,200 per hour and perform several duties. They include strengthening the company’s core competencies in finance, developing a revised business plan and short-term operating plan, managing the flow of information to attract potential investors and assisting in resolving an investigation underway by the SEC.
Roof previously served as interim CFO of the Eastman Kodak Co., Hudson’s Bay Co., Aceto Corp., and Anchor Glass Corp. She also served as interim global controller for LyondellBasell Industries, the third-largest chemical company in the world.
The stock compensation packages are “in connection with the changes to the company’s executive management team and to retain and further engage the management team during this transition period,” states the June 13 regulatory filing.
Lordstown Motors President Rich Schmidt, who has vast experience in the electric-vehicle industry, including several years in management at Tesla, received 500,000 shares of derivative security options that are convertible at $11.41 per share. His options fully vest in three years, according to documents, provided he remains with the company and its stock trades at more than $20 per share for at least 30 consecutive days.
Schmidt also owns 9,366 shares of non-derivative Class A common stock in the company.
He sold more than $6.3 million worth of company stock between Dec. 11, 2020, and Feb. 3, 2021, records show.
Four other executives, Thomas Canepa, general counsel; chief production officer Shane Brown; vice president of engineering Darren Post; and Chuan Vo, vice president of propulsion, each received 200,000 restricted stock units. These units will be vested in three equal annual installments for three years contingent with their employment with the company.
Records show that Vo unloaded more than $3.1 million in company stock between December 14, 2020 and Feb. 2, 2021; Brown cashed in shares totaling $458,315 on Feb. 4, 2021, and Post sold off $272,100 worth of stock on Feb. 8, 2021.
Strand was awarded 50,000 restricted units that vests at the end of her term as executive chairwoman.
Regulatory filings also show that Ritson-Parsons would be awarded 350,000 restricted stock units that will be vested in three installments annually over three years.
Share prices of Lordstown Motors, which trades under the ticker symbol RIDE, extended their gains on Wednesday, one day after executives said that production goals for its new all-electric pickup, the Endurance, remain on track.
At the close of trading Wednesday, shares were up 4.5%, rising to $10.78.
Even before the management shakeup, confidence in Lordstown Motors was shaken last week when the company said in a regulatory filing that it might not have enough cash to stay in business through 2022.
During a virtual panel discussion Tuesday hosted by the Automotive Press Association, Schmidt said that Lordstown Motors has enough orders to cover 15,000 vehicles through May 2022. He said that the first Endurance would roll of the assembly line in late September 2021. Future production targets would depend on demand, available capital and how fast the company decides to grow.
Strand said at the presentation that she and the company’s new executive team are prepared to take on the challenge.
“I am very comfortable with change and understand the necessity of change to grow and mature an organization,” she said. “Our board and leadership team are deeply committed to that purpose.”
Pictured: Lordstown Motors new executive team includes Angela Strand, executive chairwoman, Becky Roof, interim chief financial officer, and Jane Ritson-Parsons, chief operating officer.
Copyright 2021 The Business Journal, Youngstown, Ohio.