Mr. Burns’ tenure at Workhorse was decidedly mixed. Workhorse lost money for years, and his annual sales never exceeded $ 10 million when Mr. Burns ran the company. One of its initiatives was to provide delivery vehicles to the US Postal Service. While the company was a finalist, it lost to another bidder in February.
Workhorse paid Mr. Burns $ 1.24 million from 2015 to 2018, according to Equilar, a company that analyzes corporate compensation. He likely gave up his stock options at Workhorse by resigning in 2019, but the company gave him a consulting deal with stock options that Equilar valued at $ 10.7 million. .
What really propelled Mr. Burns and Lordstown was the merger with DiamondPeak.
Backed by some of the executives at New York-based investment firm Silverpeak, DiamondPeak raised $ 250 million from investors when it went public in March 2019, about a year before special purpose acquisition companies don’t become the hottest thing on Wall Street. In securities filings, DiamondPeak said it would likely acquire a real estate business, which made sense as it was run by David Hamamoto, a former Goldman Sachs banker who specializes in this industry.
DiamondPeak decided to buy Lordstown after Mr. Hamamoto was introduced to Mr. Burns in June by Goldman bankers. The prospectus for the deal indicated that Goldman had known Mr. Burns due to a previous investment banking relationship with him at Workhorse.
Both sides were impatient. Lordstown and his backers needed more money, and DiamondPeak was on a deadline to complete a merger in order to comply with the terms of its initial public offering.
The merger included a new $ 500 million investment from BlackRock, Fidelity Investments, Wellington Management and others.
Shares of DiamondPeak, later renamed Lordstown Motors, took off even before the merger closed. Some of DiamondPeak’s sponsors were registered in a prospectus at the end of last year to allow them to sell some of their shares in the merged company, as well as other investors as part of the financing transaction. The prospectus included some of the bankers at Brown Gibbons Lang, an investment bank, and attorneys from BakerHostetler, a Cleveland-based law firm that reviewed the financing. In total, insider sales have totaled $ 11 million since the end of December.