Nikola Corp. said Friday that it has rejected the five "dissident" nominees to its eight-member board of directors - nominees proposed by M&M Residual LLC, the entity of the founder of the hydrogen- and electric-truck maker Trevor Milton.
Nikola shares gained 2.8% on the news.
"The director 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," Nikola's board said in a statement.
Milton's M&M Residual owns 51.05 million Nikola shares $(NKLA)$, or 4.4% of the shares outstanding. That makes Milton the company's third-largest shareholder, according to FactSet data.
"Mr. Milton is separated from the Company entirely and has had zero involvement in Nikola's day-to-day operations since September of 2020; however, Nikola continues to suffer harm created by Mr. Milton's business decisions from over three years ago in his role as rounder and executive chairman," Nikola said.
Nikola's stock, which has closed below the key $1 level since Dec. 5, rose 0.6% in premarket trading. It has plunged 70.7% over the past 12 months through Thursday, and plummeted 96.5% since the end of September 2020.
The company noted that Milton has been criminally convicted of one count of securities fraud and two counts of wire fraud. On Jan. 17, 2024, he was sentenced to 48 months in prison.
While Milton was found liable in October 2023 in an arbitration with the company, and ordered to pay $165 million to the company, Nikola said the judgment remains unpaid.
Nikola said its current board comprises a "diverse group" of experts in their field, which range from trucking, energy technology startups and customer service.
"In short, the hydrogen ecosystem is a series of complex systems that require complex answers," the company said. "Nikola's board of directors has the expertise and experience necessary for the Company's success, and our team stands firmly behind them."