Rivian Approves $4.6 Billion Compensation Package for CEO RJ Scaringe Following Tesla Model
Electric vehicle manufacturer Rivian has decided to grant CEO RJ Scaringe a compensation package worth up to $4.6 billion over the next decade, as announced on the 7th of this month (local time). This compensation plan follows the historic incentive structure received by Teslas CEO Elon Musk.
Rivians board of directors decision reflects that the performance-based compensation model pioneered by Tesla is becoming a new standard for fast-growing companies like Tesla and Rivian.
Rivian is known for its R1S SUV and R1T electric pickup truck, and it is set to launch its mid-size SUV R2 next year, which will compete with Teslas best-selling Model Y. The company aims to motivate its founder Scaringe to focus on long-term growth and profitability through this compensation plan.
Just the day before, Tesla shareholders approved a compensation plan for Musk that could pay him up to $1 trillion over ten years based on operational performance and market capitalization targets.
Yona Asayag, a partner at the compensation consulting firm ClearBridge Compensation Group, noted, "While Rivian hasnt directly copied Tesla, it has clearly drawn inspiration from Musks performance-based compensation structure. Various companies are looking to the Tesla model, which ties CEO compensation directly to market value growth."
According to documents submitted to the U.S. Securities and Exchange Commission (SEC), Scaringe will receive stock options to purchase up to 36.5 million shares of Rivian Class A stock at a price of $15.22 per share, which is an increase of 16 million shares compared to previous grants.
These options will only be exercisable if Rivians stock price reaches between $40 and $140 over the next ten years, and if the company achieves its operational profit and cash flow targets within seven years.
Rivians goal, set in 2021, is to reach a stock price of between $110 and $295.
Rivians board of directors decision reflects that the performance-based compensation model pioneered by Tesla is becoming a new standard for fast-growing companies like Tesla and Rivian.
Rivian is known for its R1S SUV and R1T electric pickup truck, and it is set to launch its mid-size SUV R2 next year, which will compete with Teslas best-selling Model Y. The company aims to motivate its founder Scaringe to focus on long-term growth and profitability through this compensation plan.
Just the day before, Tesla shareholders approved a compensation plan for Musk that could pay him up to $1 trillion over ten years based on operational performance and market capitalization targets.
Yona Asayag, a partner at the compensation consulting firm ClearBridge Compensation Group, noted, "While Rivian hasnt directly copied Tesla, it has clearly drawn inspiration from Musks performance-based compensation structure. Various companies are looking to the Tesla model, which ties CEO compensation directly to market value growth."
According to documents submitted to the U.S. Securities and Exchange Commission (SEC), Scaringe will receive stock options to purchase up to 36.5 million shares of Rivian Class A stock at a price of $15.22 per share, which is an increase of 16 million shares compared to previous grants.
These options will only be exercisable if Rivians stock price reaches between $40 and $140 over the next ten years, and if the company achieves its operational profit and cash flow targets within seven years.
Rivians goal, set in 2021, is to reach a stock price of between $110 and $295.
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