Mr. Burns’ tenure at Workhorse was decidedly mixed. Workhorse has lost money for years and its annual sales never exceeded $ 10 million when Mr. Burns ran the company. One of his initiatives was the offer to deliver delivery vehicles to the US Postal Service. While the company was a finalist, it lost to another bidder in February.
According to Equilar, a company that analyzes corporate compensation, Workhorse paid Mr. Burns $ 1.24 million from 2015 to 2018. He likely forfeited his stock options at Workhorse by stepping down in 2019, but the company has given him an advisory agreement with stock options worth $ 10.7 million from Equilar.
What really drove Mr. Burns and Lordstown was the merger with DiamondPeak.
Aided by some of the directors of New York-based investment firm Silverpeak, DiamondPeak raised $ 250 million from investors when it went public in March 2019, roughly a year before special-purpose acquisition firms became the hottest company on Wall Street. Upon filing securities, DiamondPeak said it was likely to acquire a real estate business, which made sense since it was run by David Hamamoto, a former Goldman Sachs banker who specialized in the industry.
DiamondPeak chose Lordstown after Mr. Hamamoto was introduced to Mr. Burns by Goldman bankers in June. The deal prospectus states that Goldman knew Mr. Burns through a previous investment banking relationship with him at Workhorse.
Both sides were eager. Lordstown and his backers needed more money, and DiamondPeak had time to complete a merger in order to meet the terms of its initial public offering.
The merger included a $ 500 million reinvestment from BlackRock, Fidelity Investments, Wellington Management and others.
DiamondPeak’s shares, later renamed Lordstown Motors, were already picking up steam before the merger was complete. Some of DiamondPeak’s sponsors were registered in a prospectus late last year to enable them, along with other investors in the financing agreement, to sell some of their stake in the combined company. Included in the prospectus were some of the bankers from investment bank Brown Gibbons Lang and lawyers from BakerHostler, a Cleveland-based law firm that reviewed the funding package. Overall, Insider sales since the end of December were $ 11 million.