Top Lawyer Takes $1 Salary at Fast-Rising Trucking Startup

June 18, 2020, 7:08 PM

Nikola Corp.’s chief legal officer Britton Worthen is putting his money in the hybrid truck and hydrogen fuel cell and battery maker’s future.

The Phoenix-based company made waves earlier this month when it hit public markets for the first time upon the completion of a $3.3 billion reverse merger with special-purpose acquisition vehicle VectoIQ Acquisition Corp. The deal created a public company whose initial market capitalization hit nearly $31 billion—it’s now at $23 billion—to surpass automotive industry giants like Ford Motor Co., even though Nikola had no revenue.

Now, Worthen, who has served as Nikola’s general counsel for nearly five years, is taking a $1 salary—down from $250,000 in 2019—in return for company stock valued at $3 million, according to an amended employment agreement included in a June 3 securities filing by Nikola. Such stock awards take years to vest and are pegged to Nikola’s financial performance.

Worthen is one of several top Nikola executives trading cash for equity, a familiar transaction in the startup world. He declined to discuss his compensation, citing company policy.

Taking the Leap

Worthen was hired by Nikola in late 2015, back when the company founded by commercial trucking and transportation executive Trevor Milton was known as Nikola Motor Co. Milton, now a 38-year-old executive chairman at the Nasdaq-traded Nikola, has watched his net worth soar to roughly $7.5 billion following the company’s successful stock market debut.

That’s a long way from what Worthen expected when he first spoke with Milton about joining his fellow Utah native at a trucking startup being built in the Arizona desert.

Worthen, then a corporate partner at Phoenix-based boutique Beus Gilbert McGroder PLLC, had done work in private practice for Milton, whom he called a “high-energy, entrepreneurial guy.” He spoke with Bloomberg Law prior to a Bloomberg News report Wednesday looking at Milton’s December 2016 statements about a Nikola semi-truck prototype.

Leaving the firm for a company that Milton started in his basement was a risky decision, Worthen said.

“It was pretty early days, but I thought, ‘If this thing works out, I have to be a part of this,’” said Worthen, who had never worked in-house before. “Zero emissions in trucking seemed to make sense. The opportunity just looked too incredible to pass up and it’s been a wild ride ever since.”

Tough Competition

Nikola, like Tesla Inc., the fast-growing electric car manufacturer to which it often draws comparisons, takes its name from inventor Nikola Tesla. Despite an ongoing rivalry—the two companies have sparred in court over patents—and his desire for Nikola to “stand on our own two feet,” Worthen praised Tesla.

“They’ve changed the conversation as to how people look at zero-emission vehicles and the possibility of them actually working,” Worthen said. “Look at all of the big automakers still playing catch up.”

Worthen credits Nikola’s success to its management, which last year got a new president and CEO in Mark Russell, a former Kirkland & Ellis LLP associate who left the practice of law to embark on a business career that saw him, most recently, serve as president and chief operating officer for Columbus, Ohio-based metal fabrication and steel processor Worthington Industries Inc.

Russell received nearly $6.56 million in total compensation from Nikola last year, with the bulk of that pay package comprised of stock options, according to securities filings by the company. Bloomberg data values Russell’s Nikola stock holdings at $2.62 billion.

“The fact that he’s an attorney is extremely helpful,” said Worthen of Russell’s legal background. “He doesn’t want to act as a lawyer for the company, but when he and I have a conversation he gets it.”

Worthen said Nikola’s legal group has seven employees, five of them lawyers like himself, as well as a paralegal and an assistant. He expects to grow the in-house team, all of whom are based in Phoenix, by at least three other lawyers in the coming months.

Key Advisers

Nikola’s merger agreement with VectoIQ was finalized in early March, just before the coronavirus outbreak created complications for U.S. businesses and their legal departments. Worthen said the deal could’ve easily collapsed had it not been completed prior to the Covid-19 pandemic.

Worthen said Stanley Pierson, head of the emerging growth and venture capital group at Pillsbury Winthrop Shaw Pittman in Palo Alto, Calif., serves as Nikola’s primary corporate and securities counsel. Pierson took the lead for Nikola on its reverse merger with VectoIQ, which was advised by Greenberg Traurig LLP, and he and Pillsbury Winthrop have counseled on private fundraisings by the company.

Other firms, such as Worthen’s former shop Beus Gilbert and Phoenix-based Snell & Wilmer LLP, both of whom have represented the company in its battles with Tesla, have handled litigation. TechLaw Ventures, an intellectual property boutique based in suburban Salt Lake City, where Nikola was initially headquartered until it relocated to Phoenix in 2018, does trademark work.

Worthen said Nikola is pleased to be based in Phoenix, citing the city’s proximity to California and a deep talent pool of engineers supplied by Arizona State University. Phoenix is also a hub for large transportation operators that serve as potential customers for the electric- and hydrogen-powered trucks that Nikola sells to clients like beer giant Anheuser-Busch Cos. LLC.

Nikola has also received tax breaks from Arizona’s government, led by Republican Gov. Douglas Ducey—inducements that Worthen said were helpful in getting the company off the ground. Nikola’s goal is getting diesel-powered commercial trucks off the road, Worthen said, an endgame that would also likely drive the company’s stock price to new heights.

“In the transportation segment, commercial trucking is the second-largest polluter,” Worthen said. “We’re hoping to reduce that burden by taking a big chunk out of those greenhouse gas emissions.”

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editors responsible for this story: Melissa B. Robinson at mrobinson@bloomberglaw.com, Seth Stern at sstern@bloomberglaw.com

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