Rivian, the electric vehicle startup, has introduced a new performance-based stock award program for its CEO RJ Scaringe, potentially valuing up to $5 billion based on meeting specified goals. Alongside this award, Scaringe will see his annual salary doubled to $2 million and receive a 10% stake in Rivian’s spinout, Mind Robotics.
This move comes in the wake of Tesla’s recent approval of a compensation package for CEO Elon Musk, projected to be the largest in corporate history at $1 trillion. Unlike Musk’s package, Scaringe’s compensation does not require shareholder approval.
The decision to implement this new award system follows the cancellation of a similar-sized award from 2021, attributed to the challenges in meeting the associated goals. The canceled award was tied to stock price increases, with hurdles including share price targets of $110, $150, $220, and $295. Due to Rivian’s fluctuating stock performance, it became increasingly difficult for Scaringe to achieve these milestones.
Rivian cited a ‘lack of incentive’ due to the previous award structure, prompting the compensation committee to opt for this new performance-based model to align with Scaringe’s achievements more effectively.
Source: TechCrunch