Rivian has unveiled a new compensation package for its founder and CEO, RJ Scaringe, a performance-driven stock award that could ultimately pay out as much as $4.6 billion over the next decade. The automaker confirmed the plan in a regulatory filing on Friday, marking one of the largest CEO pay packages in the EV industry and drawing clear comparisons to Tesla’s approach to incentivizing Elon Musk.
Scaringe’s new award offers the ability to purchase 36.5 million shares of Rivian Class A stock at an exercise price of $15.22—about 16 million more options than his previous compensation plan allowed. But to unlock them, he must lead the company through a series of both operational and market-value milestones.
The vesting structure requires Rivian’s stock price to reach a series of targets from $40 to $140 per share over the next ten years. Additional triggers, spanning the next seven years, include achieving new operating income and cash-flow benchmarks—significant challenges for any young automaker still navigating heavy investment and scaling costs.
The structure closely resembles the model Tesla used for Elon Musk’s compensation plan. Rivian said the plan ensures rewards are tied directly to shareholder value.
“The rigorous and challenging milestones associated with this option award are structured in such a way that ensures the options only vest should the company deliver significant value to our shareholders,” the company said.
Rivian’s board elected to cancel Scaringe’s 2021 performance award after determining that the original milestones—some requiring the stock to reach $295 per share—were no longer realistic. Since peaking around $129 shortly after its IPO, Rivian’s stock has mostly traded between $10 and $20.
The new package not only resets performance expectations but also doubles Scaringe’s base salary to $2 million. In addition, he has been granted a 10% economic interest in Mind Robotics, a newly formed Rivian spinoff focused on industrial AI, where he will also serve as chairman.
If every milestone is hit, Rivian estimates shareholders could see $153 billion in value creation, while Scaringe’s payout would total up to $4.6 billion—roughly one-quarter of the company’s current market value.
