Rivian has recently awarded its founder and CEO RJ Scaringe with a new stock package based on performance, potentially valued at $5 billion upon meeting all specified targets, as disclosed in a recent filing.
Scaringe’s annual salary has also been raised to $2 million, and he has been granted a 10% stake in Rivian’s latest venture, Mind Robotics, as detailed in the filing.
This development comes shortly after Tesla’s shareholders approved a compensation plan for CEO Elon Musk that could reach a staggering $1 trillion, marking a significant milestone in corporate compensation history.
Unlike Musk’s remuneration package, Scaringe’s award does not require shareholder approval. The compensation committee of Rivian’s board of directors decided to cancel a previous performance award granted to Scaringe in 2021 due to the unlikelihood of meeting the set goals. The new award is part of the existing 2021 equity incentive plan.
The committee’s decision to revoke the 2021 award was influenced by the challenges Scaringe faced in reaching the specified targets, given Rivian’s fluctuating stock prices. The 2021 award included stock options tied to stock price increases, making it difficult for Scaringe to capitalize on its full potential.
In response to the lack of incentive caused by the previous award structure, Rivian’s compensation committee introduced a new performance-based stock option for Scaringe, aiming to motivate him to drive the company’s technological advancements and the launch of R2.
