Trevor Milton CEO of Nikola
Massimo Pinca | Reuters
Nikola has cut founder, Trevor Milton, out of all decision making or consulting at the electric truck company following his resignation last week and subsequent allegations of sexual misconduct.
The former executive chairman, who holds more than 91 million shares in the company, is being treated like any other shareholder, executives told CNBC.
Milton, who remains the company’s largest shareholder, relinquished his seat on Nikola’s board and resigned as executive chairman following fraud allegations by short seller Hindenburg Research reportedly leading to federal inquiries about whether he and the firm misled investors. Milton and the company have rebutted many of the claims in the report.
Nikola Executive Chairman Steve Girsky and CEO Mark Russell attempted to distance themselves and the company from Milton on Wednesday. They also downplayed Milton’s role as an unpaid consultant with the company through the end of the year, per the terms of his resignation.
“He’s no longer an employee, he’s no longer a board member, and so he’s the same as another shareholder at this point,” Russell told CNBC during a phone interview. When asked about Milton consulting with the company, which was “on an ad hoc basis,” according to his exit package, Russell responded, “Same as another shareholder.”
Girsky confirmed Milton also is “not involved in any board discussions.”
Hindenburg Research’s report accused Milton of making false statements about the company’s technology to attract investors and partnerships with other automakers. Milton and the company have rebutted many of the claims in the report.
Milton, 38, also now faces allegations of sexual assault. Two women have filed such complaints with Utah authorities against Milton. Both allegations were more than 15 years old but separately involved a cousin and an office assistant when both women were 15 years old.
Milton’s resignation has been detrimental to the company’s stock. Shares of Nikola are down about 40% from Sept. 18 – the last closing price before his departure.
The company previously disclosed Milton as “the source of many, if not most, of the ideas and execution driving Nikola,” citing, “If Mr. Milton were to discontinue his service to us due to death, disability or any other reason, we would be significantly disadvantaged.”
Despite the hit to Nikola’s shares, many analysts have said Milton’s departure is positive for the company as it will allow it to better focus on executing its plans of releasing battery-electric and fuel cell semitrucks. However, Wedbush downgraded the stock last week to underperform from neutral.
Shares of Nikola popped by more than 17% in afternoon trading on Wednesday after the company reconfirmed its business plans and production targets.