In an attempt to avoid complete financial collapse, the founder of Fisker significantly slashed his salary to finance his bankrupt company. Facing a dire financial situation, Fisker has exhausted its funds and seems to have run out of viable ideas. The electric car startup, once full of promise and innovation, is now on the brink of shutting down. Desperately trying various strategies, the company hopes that one of these measures will prove successful and prevent its closure.
According to TechCrunch, one of these desperate measures involves the founder of Fisker accepting a salary of just one US dollar (3.75 Saudi riyals). This drastic pay cut is intended to demonstrate commitment to the company’s survival. During recent bankruptcy proceedings, Fisker’s restructuring officer, John DiDonato, was asked whether the company’s co-founders, Henrik Fisker and his wife, Geeta Gupta-Fisker, were still receiving salaries. DiDonato confirmed that they were, but he couldn’t or wouldn’t disclose their exact compensation, stating only that the Fisker family’s salaries were “subject to adjustment” and might include “some deferrals.”
Henrik Fisker holds the position of CEO, while Geeta Gupta-Fisker serves as both CFO and COO. Continuing to receive high executive salaries after laying off nearly 90% of employees, filing for bankruptcy, and struggling to cover manufacturing costs for spare parts is highly problematic. Attorney Linda Reichendfer, representing the U.S. trustee, pressed DiDonato with questions. She was concerned that all potential opportunities to free up capital had been exhausted, especially since Fisker was aggressively trying to sell its remaining stock to raise funds.
Within a week, the Fisker family announced that they would reduce their pay to $1. Although the timing of this gesture of goodwill might seem suspicious, we don’t know their previous salaries. However, a 2022 regulatory filing revealed that the Fisker family’s salaries were set at California’s minimum wage of $62,400 annually, plus cash bonuses totaling $710,000 (2,662,500 Saudi riyals). This significant reduction in salary is intended to free up more funds for the struggling company.
Despite implementing cost-saving measures and generating additional funds through car auctions and interest from bank accounts, DiDonato believes Fisker can finance its bankruptcy case for only a few more weeks. Much depends on whether the stock sale to American Lease gets approved, a decision expected on July 16. If the sale goes through, it might provide a temporary lifeline for the company.
Once valued at $8 billion, Fisker has now been delisted from the New York Stock Exchange. This drastic change reflects the severe decline in the company’s fortunes. Used models of its only production vehicle, the Ocean SUV, which initially sold for about $70,000 (262,500 Saudi riyals), are now selling for just $10,000. This dramatic drop in value highlights the company’s financial instability and the challenges it faces in regaining its market position.
