Rivian CEO lands a $4.6B pay deal after Tesla sets a new trillion-dollar bar
After Tesla’s (TSLA) board approved a jaw-dropping trilliond-dollar pay package for Elon Musk, Rivian (RIVN) just rolled out a much smaller (but still staggering) deal of its own.
In a filing with the SEC, Rivian revealed that CEO RJ Scaringe could earn up to $4.6 billion over the next decade if he meets a new set of performance goals.
It’s not Musk-money, but it would still rank among the biggest CEO compensation packages ever granted.
Unlike Musk’s deal, though, Rivian’s board actually lowered some of Scaringe’s hurdles. While adding new profit and cash-flow targets, it trimmed earlier share-price milestones that executives called “unrealistic.”
The 2021 agreement, the company said, created “a lack of incentive” because the odds of hitting those numbers were near zero.
Under the revised plan, the board is now targeting a share-price range of $40 to $140 over the next 10 years, down from the prior $110 to $295 goalposts.
Rivian’s stock closed Monday at $16.41, up about 23% year-to-date.
Performance goals could be harder to hit
The company also set new operating-income and cash-flow targets, though it didn’t disclose details.
Scaringe’s 2021 plan granted options on roughly 20.4 million shares; the new one bumps that up to 36.5 million. If fully vested, his stake would rise to 3% of Rivian, up from 2%.
For comparison, Musk owns 13% of Tesla (15% voting power) and that share would jump to 25% if he nails his new milestones.
Of course, performance incentives only matter if there’s a market to sell into. With the $7,500 EV tax credit now gone in the US, demand for higher-priced electric cars could take another hit.
Rivian is betting that its lower-cost R2 SUV, due in 2026 at a starting price of $45K, will open the brand to a wider audience. Its flagship R1 lineup currently ranges from $77K to $122K.
Needham analyst Chris Pierce wrote in an August client note that the R2 “will substantially expand RIVN’s total addressable market beyond the more expensive R1 vehicle.”
Not everyone’s sold on Rivian’s runway, though. Last month, CFRA reiterated its SELL rating, warning that “RIVN’s cash-burn rates [are] highly concerning” and that the new Georgia plant “should act as an even greater drag on free cash flow.”
As part of the overhaul, Rivian’s board also raised Scaringe’s base salary to $2 million a year and said it doesn’t plan to grant additional equity awards in 2026.