Rivian's CEO RJ Scaringe has unveiled a $4.6 billion compensation plan that bears striking resemblance to Elon Musk's Tesla deal, yet the latter's playbook remains hard to replicate.
Scaringe's award package hinges on ambitious performance targets over the next decade, including lifting Rivian's stock price to $140 - a lofty goal given the current trading price of around $15. In this softening EV market, and with declining investor fervor that once buoyed Tesla, those targets appear particularly steep.
The plan doubles Scaringe's annual base salary from $1 million to $2 million and gives him the right to buy up to 22 million shares across 11 tranches if Rivian's stock hits specific price milestones. He can acquire an additional 14.5 million shares if Rivian meets profit and cash-flow targets before 2032, with exercise options available at $40 per share.
Unlike Musk's plan, Scaringe's award does not require a shareholder vote due to its issuance under an already approved 2021 incentive program. However, the company's board ultimately deemed the original performance goals unrealistic, including a target that envisioned the stock hitting $295.
The challenge facing Rivian mirrors Tesla's own difficulties in replicating its success story. Unlike Tesla, which benefited from low interest rates, abundant capital, and an early-adopter boom in EV enthusiasm, Rivian faces a much tougher landscape. Tesla's high stock price was buoyed by optimism on its non-vehicle products, such as software and robotics.
Rivian's non-EV prospects are less clear, with external partnerships being key to its success. However, the company remains financially strained, having recently missed Wall Street earnings expectations, laid off 4.5% of its workforce, settled a $250 million lawsuit over R1 price hikes, and restructured top leadership.
Unlike Musk, who enjoys a cult-like following that helps him meet ambitious targets, Scaringe lacks this advantage. Rivian faces the same nationwide cooling in EV demand, exacerbated by cuts in EV tax credits, that is weighing on every major automaker. As such, it remains to be seen whether Scaringe's compensation plan will yield the desired results or if the company will follow Tesla into a more challenging landscape.
Scaringe's award package hinges on ambitious performance targets over the next decade, including lifting Rivian's stock price to $140 - a lofty goal given the current trading price of around $15. In this softening EV market, and with declining investor fervor that once buoyed Tesla, those targets appear particularly steep.
The plan doubles Scaringe's annual base salary from $1 million to $2 million and gives him the right to buy up to 22 million shares across 11 tranches if Rivian's stock hits specific price milestones. He can acquire an additional 14.5 million shares if Rivian meets profit and cash-flow targets before 2032, with exercise options available at $40 per share.
Unlike Musk's plan, Scaringe's award does not require a shareholder vote due to its issuance under an already approved 2021 incentive program. However, the company's board ultimately deemed the original performance goals unrealistic, including a target that envisioned the stock hitting $295.
The challenge facing Rivian mirrors Tesla's own difficulties in replicating its success story. Unlike Tesla, which benefited from low interest rates, abundant capital, and an early-adopter boom in EV enthusiasm, Rivian faces a much tougher landscape. Tesla's high stock price was buoyed by optimism on its non-vehicle products, such as software and robotics.
Rivian's non-EV prospects are less clear, with external partnerships being key to its success. However, the company remains financially strained, having recently missed Wall Street earnings expectations, laid off 4.5% of its workforce, settled a $250 million lawsuit over R1 price hikes, and restructured top leadership.
Unlike Musk, who enjoys a cult-like following that helps him meet ambitious targets, Scaringe lacks this advantage. Rivian faces the same nationwide cooling in EV demand, exacerbated by cuts in EV tax credits, that is weighing on every major automaker. As such, it remains to be seen whether Scaringe's compensation plan will yield the desired results or if the company will follow Tesla into a more challenging landscape.
They're already struggling with declining investor fervor and a cooling EV market... doubling RJ's salary is just insane 
$4.6 billion is crazy talk! How are they gonna hit that $140 stock price goal? 
It's like setting the bar too high, you know? And what if it doesn't work out? 
What about those 22 million shares? Who's gonna buy them all? 
The whole thing feels so precarious. I'm keeping an eye on this one... 
I'm skeptical about Rivian's CEO RJ Scaringe getting away with this crazy $4.6 billion compensation package 
. I mean, have you seen Tesla's non-vehicle products? They've got software and robotics to fall back on when EV sales dip 
. Rivian's not as lucky - their future plans are pretty thin 
. And let's be real, they're already struggling financially 
. I'm not saying it'll be a disaster, but I think we need to keep our expectations in check 
!
RJ Scaringe thinks he can just walk in here with a $4.6 billion package and expect everything to go right? I mean, come on, stock price at $15? that's like asking someone to move the world 
. And what's with the 'lofty goal' comment? yeah, it's a lofty goal because it's unrealistic 
.
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like 140 bucks per share?! that's just crazy talk 
. But here's the thing - it feels kinda over-the-top considering Rivian's current struggles in the market 
.
. The EV market is softening and investor fervor is waning - it's gonna be tough for them to hit those targets. And yeah, Scaringe doesn't have that Musk magic 
. It's also concerning that Rivian is facing financial struggles 
. And honestly, who knows if this comp plan will even help them hit those ambitious stock price targets 
. And yeah, Tesla's success story was kinda unique with all that low interest and early EV enthusiasm 
.