On the Dash:
- RJ Scaringe’s 10-year pay plan includes options to buy 36.5 million shares at $15.22 each, tied to stock and profit milestones.
- Rivian has adjusted its performance goals from a previous plan deemed unachievable, shifting its focus toward sustainable profitability.
- If the company meets all targets, this package could be valued at $4.6 billion, potentially generating $153 billion in shareholder value.
Rivian has approved a new decade-long compensation package for CEO RJ Scaringe, worth up to $4.6 billion, that aligns his pay with the company’s performance and future profitability goals. The plan, filed with the U.S. Securities and Exchange Commission, replaces a 2021 award that Rivian said was unlikely to be met.
Under the new structure, Scaringe will receive options to purchase up to 36.5 million shares of Rivian’s Class A stock at an exercise price of $15.22 per share, the company’s closing price on Thursday. The award, which represents roughly 3% of Rivian’s total shares, will vest if the company achieves reduced stock price milestones of $40 to $140 per share within 10 years, and meets new operating income and cash flow targets over seven years.
The approval follows a similar performance-based pay plan recently approved by Tesla shareholders for CEO Elon Musk, indicating a broader trend among automakers to link executive pay to long-term value. Compensation experts note that Rivian’s strategy aims to keep its founder while encouraging him to prioritize profitability as the company readies for the launch of its smaller, more affordable R2 SUV next year.
Rivian’s board doubled Scaringe’s base salary to $2 million, emphasizing that an independent compensation consultant helped develop this package to better align executive pay with shareholder returns. If the company meets all performance milestones, shareholders could benefit by as much as $153 billion in value, according to Rivian.
In addition to the equity award, Scaringe has been granted 1 million common units in Mind Robotics, a newly formed Rivian spinoff focused on developing industrial AI technology. The grant gives him up to a 10% economic interest once the business exceeds certain profitability thresholds. Scaringe will also serve as chairman of Mind Robotics’ board of directors, with Rivian retaining an ownership stake.
