Nikola Corp. (NASDAQ: NKLA) founder Trevor Milton is out of the management loop at the startup electric truck maker, but he is playing a recent 40% runup in Nikola stock to make good on his pledge to reward early employees.

Milton has cashed out 3.8 million of 6 million founders’ stock options he promised to give to early employees, according to Securities and Exchange Commission (SEC) filings reviewed by FreightWaves.

Those options cost $1.06 per share to acquire. They have sold for various amounts in a range of transactions, all reported by Milton under SEC rules because the options were awarded to him. The largest sale of 1.2 million options came last December 1, the first day that a lockup preventing Milton from selling shares expired.

Optioning out

In total, Milton disposed of more than 3.7 million founders’ options during December 2020. He executed 14 trades selling 179,689 shares between March 15 and May 27, Nine of the recent trades were for just 250 shares. The most recent trade was 10,000 options on May 27.

About 2.2 million options remain of the 6 million he promised to employees, according to May 11 SEC filing.

Enriching employees to whom Milton promised a taste of company success dates to a December 2017 Christmas party at his home in Utah before Nikola established its headquarters in Phoenix.

Milton himself has sold about 11 million shares. The most recent sale of 3.5 million shares on March 31 brought in $49 million before taxes.

Milton still owns about 79 million shares of Nikola stock, or 20.1% of the outstanding shares. Including shares he owns with current CEO Mark Russell, Milton’s holdings account for about 30% of outstanding shares.

Back to billionaire status

Milton, who once approached deca-billionaire status, or a net worth of $10 billion, saw his Nikola holdings fall below $1 billion in April. The stock’s rebound has returned him to billionaire status. Based on Friday’s closing price of $16.99, Milton’s stake was worth about $1.3 billion.

When he left the company as executive chairman in September 2020, Milton agreed to vote his shares according to the desires of the board of directors and do nothing to seek to regain the board seat he gave up or support anyone for a board seat other than board recommendations.

Those assurances earned Milton a speedup of vesting in 600,000 additional shares.

The stock sales contrast the recent pledge by the company’s top leaders to work for a $1 a year salary through 2023 in exchange for potentially huge stock awards if the company hits share price milestones of $25, $40 and $55 by June 2023. 

Milton, meanwhile, is keeping a low profile as he awaits the outcome of SEC and Justice Department investigations into false statements touting Nikola’s technological prowess and its ability to make hydrogen for its planned for cell trucks at a price on par with diesel fuel.

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Click for more FreightWaves articles by Alan Adler.