Rivian Doubles CEO Salary to $2 Million, Unveils $4.6B Package
BREAKING: Rivian has just announced a major overhaul of CEO RJ Scaringe’s compensation, doubling his salary to $2 million and introducing a performance-driven stock-option award potentially worth up to $4.6 billion. This critical move, confirmed in a recent SEC filing, aims to retain Scaringe as he leads the electric vehicle manufacturer through a pivotal growth phase.
The decision comes as Rivian prepares for the highly anticipated launch of its new R2 SUV, slated for release next year. This model is expected to lower the entry price for consumers, contrasting with Rivian’s current offerings, which start at around $90,000. Scaringe expressed the importance of scaling production to meet the company’s aspirations of producing millions of vehicles annually.
In the latest filing, Rivian’s board stated that Scaringe’s original pay package lacked sufficient incentives to keep him on board. His new compensation includes a significant increase in stock options—from 20.4 million shares to 36.5 million shares—with the first tranche becoming available at a stock price of $40, much lower than the previous threshold of $110.
As Rivian’s stock was trading at just $15.23 on Friday, this new pay structure requires an approximately 820% increase to reach the maximum potential value of Scaringe’s package. Rivian spokesperson Marina Hoffmann noted that shareholders can expect an estimated $32 billion in returns before Scaringe benefits from any of his new award. If fully realized, the package could create around $153 billion in shareholder value.
This restructuring comes shortly after Rivian announced layoffs of over 600 employees, about 4.5% of its workforce, citing the need to “profitably scale” operations as it gears up for the R2 launch. Rivian’s reported 78% year-over-year revenue increase still masked a troubling net loss of $1.1 billion for the third quarter, underscoring the urgency of Scaringe’s leadership as the company navigates a challenging market landscape.
The timing of the new pay package aligns closely with a similar move at Tesla, where CEO Elon Musk received a staggering compensation package worth up to $1 trillion pending future company milestones. Hoffmann clarified that Musk’s package did not influence Rivian’s decision-making regarding Scaringe’s compensation.
As Rivian steps into this critical phase, the market will be watching closely. The new compensation package reflects both the company’s ambitions and the pressing need for Scaringe to deliver results amid increasing competition in the electric vehicle sector.
Stay tuned for more updates as Rivian embarks on this transformative period in its history.
