Rivian, the electric vehicle maker, just announced a new compensation plan for its CEO, RJ Scaringe, potentially worth up to $4.6 billion over the next decade. This pay structure is designed to motivate Scaringe by linking his earnings to the company’s performance, similar to Tesla’s pay model for Elon Musk.
Rivian aims to keep Scaringe focused on growth. As part of the plan, he has a new base salary of $2 million, doubled from the previous amount. He will also receive options to buy shares at $15.22 each, based on achieving specific financial goals and reduced stock price milestones over the next ten years. Notably, these milestones are lower than those set in a previous plan that Rivian deemed too ambitious.
This strategy comes at a crucial time. With the removal of EV tax credits, Rivian is facing challenges in sales and recently laid off about 600 employees, about 4.5% of its workforce. Market analysts suggest that while these ambitious pay packages can attract talent, they often face hurdles due to changing economic conditions.
According to Yonat Assayag from ClearBridge Compensation Group, Rivian’s plan reflects a trend where companies adopt the Tesla model of tying CEO rewards to market growth. Similar inquiries have come to her firm from other companies looking for guidance in structuring their executive pay.
Amit Batish from Equilar warns that while this structure looks appealing, not all leaders can hit these lofty targets. Rivian’s previous goals were deemed unrealistic, leading to the adjustment in the latest proposal.
In essence, Rivian’s new plan focuses not only on reward but also on adaptability, aiming to align the interests of the CEO with those of shareholders during challenging times in the EV market. This trend of performance-based compensation might reshape how companies in the tech and automotive sectors think about executive packages in the future.
For further details, you can read more about Rivian’s plans and updates in the Reuters report.
Source link
RSBI:COMPENSATION,TOPIC:RATI-TECHNOLOGY,RSBI:WORKER-RIGHTS,RATI:ADAS-AV-SAFETY,RATI:PARTNERSHIPS-MA,RATI:SUPPLY-CHAIN,RATI:SUSTAINABLE-EV-SUPPLY-CHAIN,RATI:WORKFORCE,RATI:ELECTRIFICATION-ZERO-EMMISION,TOPIC:RATI-STRATEGY,TOPIC:RATI-SUPPLY-CHAIN-MANUFACTURING,MTPIX,AUT,AUTO,BACT,BIZ,BLR,CARM,CMPNY,CYCS,DEAL1,ELEAV,JOB,MNGISS,MPAY,PUBL,PXP,TECH,TMT,WPAY,AMERS,US,NAMER,SUSTAINABLE-BUSINESS,DEST:OUSBSM,DEST:OCABSM,DEST:OUSTCM,NEWS1,TOPNWS,MTGFX,TOPCMB
