Fisker, the bankrupt electric vehicle (EV) startup, is resorting to desperate measures in an attempt to stay afloat. One such measure is accepting a one-dollar salary, as reported by TechCrunch. This revelation came to light during recent bankruptcy proceedings when John DiDonato, Fisker’s restructuring officer, was asked about the salaries of company co-founders Henrik Fisker and Geeta Gupta-Fisker. DiDonato confirmed that they were still on the payroll but did not disclose their current salaries, only mentioning that they were undergoing modification and possible deferrals.
The fact that Henrik Fisker holds the title of CEO, while Geeta Gupta-Fisker serves as the CFO and COO, makes it questionable for them to continue receiving hefty executive-level salaries. This is especially true considering the company’s financial situation, which involved laying off nearly 90% of its employees, filing for bankruptcy, and facing recall issues without sufficient funds to address them.
Linda Richenderfer, a lawyer for the U.S. Trustee, raised concerns about Fisker’s capital-saving efforts and the aggressive push to sell its remaining inventory. Her line of questioning suggested that Fisker had exhausted all opportunities to free up capital. In response to the scrutiny, the Fiskers announced that they would reduce their salaries to a mere one dollar. While the gesture may be seen as goodwill, the timing raises suspicion about their previous earnings. According to a regulatory filing from 2022, the Fiskers’ listed salaries were at the California minimum wage of $62,400 per year, along with cash bonuses totaling $710,000.
Despite the financial difficulties faced by Fisker, DiDonato believes that cost-saving measures and additional cash from vehicle auctions and bank accounts can sustain the company’s bankruptcy case for a few more weeks. The approval of the inventory sale to American Lease is also crucial for Fisker’s future, but a decision on this matter is not expected until July 16.
The downfall of Fisker is significant, considering that its valuation once reached $8 billion. The company has now been delisted from the New York Stock Exchange, and used models of its only production vehicle are being sold for a mere $10,000, a stark contrast to its initial launch price of nearly $70,000.
In conclusion, Fisker’s financial crisis has led to drastic measures, including the acceptance of a one-dollar salary by its co-founders. The company’s future depends on its ability to secure funding through cost-saving measures and potential inventory sales. The downfall of Fisker serves as a cautionary tale about the challenges faced by EV startups in a highly competitive market.
