Rivian Gives Rj Scaringe A New Pay Package Worth Up To $5b

Rivian has fixed its laminitis and CEO RJ Scaringe a caller performance-based banal grant that could yet beryllium worthy astir $5 cardinal if each nan underlying goals are met, according to a caller filing.

Scaringe’s net is besides being doubled to $2 cardinal per year, and he was fixed a 10% liking successful Rivian’s newest spinout Mind Robotics, nan filing shows.

The announcement comes conscionable 1 time aft Tesla shareholders voted to o.k. a compensation package for its CEO Elon Musk that could beryllium worthy $1 trillion — nan largest successful firm history.

Unlike Musk’s salary package, Scaringe’s isn’t taxable to a shareholder vote. The compensation committee connected Rivian’s committee of board has canceled a similar-sized capacity grant fixed to Scaringe successful 2021 arsenic portion of a company-wide equity inducement scheme adopted that year. The caller grant is being issued nether nan same, already-approved 2021 equity inducement plan.

The committee decided to cancel nan 2021 capacity grant successful portion because of nan “unlikeliness” that Scaringe could scope nan goals required. The 2021 grant consisted of 20,355,946 banal options that vested successful portion based connected banal value increases. Six years past nan assistance date, if Rivian’s stock value passed $110, $150, $220, and $295, Scaringe would beryllium capable to acquisition nan banal options successful corresponding tranches for conscionable $21.72.

Rivian’s banal changeable up to astir $129 pursuing its IPO successful November 2021. But it fell to astir $30 complete nan adjacent six months, and has spent nan past fewer years typically trading betwixt $10 and $20. This has made it harder for Scaringe to entree moreover portion of nan 2021 award, fto unsocial nan full worth of astir $6 billion, according to nan company. (Scaringe was awarded different 6.8 cardinal banal options that simply vest complete clip successful nan 2021 grant that were not tied to performance, and nan institution says those person not been canceled.)

In nan filing, Rivian wrote that this created a “lack of incentive.” So nan compensation committee decided to switch nan aged grant pinch this caller one.

“Following a review, and input from an independent compensation consultant, nan Compensation Committee cancelled our CEO’s 2021 Performance Grant and issued a caller capacity banal action and accrued our CEO’s guidelines salary,” Rivian said successful a connection to TechCrunch. “This caller grant is designed to clasp and incentivize RJ to execute connected nan Company’s captious adjacent shape arsenic it progresses its exertion roadmap and launches R2.”

Similar to really Tesla sounded its caller grant to Musk, Rivian besides said nan capacity assistance to Scaringe is “structured successful specified a measurement that ensures nan options only vest should nan institution present important worth to our shareholders.” The institution pointed retired that Scaringe won’t spot $1 from nan grant earlier he helps adhd $32 cardinal successful worth to Rivian, and that shareholders will spot “$153 cardinal of worth creation” if he hits each milestones.

The maximum magnitude of shares disposable to Scaringe nether caller capacity grant is 36,500,000. He has 10 years to deed milestones that unlock nan afloat amount, and if he does, he would ain an further 3% of nan company. (Scaringe presently owns astir 1% of Rivian, down from astir 2% earlier this twelvemonth aft he transferred a information of his holdings to his ex-wife arsenic portion of their divorcement settlement, arsenic TechCrunch first reported.)

A mostly of those banal options — 22 cardinal — is tied to caller banal value hurdles. Scaringe will gain 2 cardinal shares erstwhile Rivian’s banal hits $40, and past different 2 cardinal shares for each $10 summation up to a banal value of $140.

The remaining 14,500,000 banal options are locked distant until Rivian reaches definite adjusted operating income and rate travel targets. Scaringe will person to salary a onslaught value of $15.22 per stock to workout these options — a imaginable full of astir $555 million.