Lordstown may not survive to see the end of 2022. Its finances are in tatters, and its ability to produce vehicles has been severely compromised. Its trouble started last year. Inexplicably, Chief Executive Officer Daniel Ninivaggi (who took the job in August) made $5,564,048, according to the company’s proxy.
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Lordstown likely will be a penny stock soon. It trades at $1.57. That is down from a 52-week high to $15.80 and an all-time high of over $30.
The number of vehicles Lordstown plans to produce this year is frighteningly small. The company says it could be 550 of its Endurance model. The company had $204 cash on its balance sheet at the end of the last quarter. Revenue for the quarter was zero. The loss for the period was $89 million.
As the company looked forward, it warned of “the need to raise substantial additional capital” and the risk it can “continue ongoing operations and remain a going concern.”
What made Ninivaggi worth $5,564,048? The board could say it was because he took a risky job. That is cold comfort for the company’s investors and the employees whose jobs are on the line.
The question of high CEO pay has been a concern of investors for years. The average pay of an S&P 500 company was about $13 million last year. And all these are large companies that dwarf Lordstown in size.
What is certain about Lordstown is that Ninivaggi will leave a rich man. The people who work there and the investors may receive nothing.
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