Rivian Automotive (RIVN) has revamped CEO RJ Scaringe’s pay package, potentially worth up to $4.6 billion, which is heavily tied to meeting new performance goals. The move comes as Rivian doubles down on growth, innovation, and its push into AI-powered robotics.
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Scaringe’s base salary has also doubled to $2 million per year, and he has been granted a 10% stake in Rivian’s newest spinoff, Mind Robotics, a venture focused on industrial AI applications.
Also, he has received options to purchase up to 36.5 million shares of Rivian’s Class A stock at an exercise price of $15.22 per share. These options will vest when Rivian achieves specific milestones over the next decade, including a stock price ranging from $40 to $140 and new operating income and cash flow targets over the next seven years.
This new package replaces a previous 2021 award that was tied to higher stock price targets (up to $295), which seems unachievable after the stock price fell significantly. The company determined that the previous award’s structure provided a “lack of incentive.”
Why the Big Pay Bump?
The pay raise comes as Rivian is preparing to launch its R2 SUV, a smaller, more affordable model aimed at competing directly with Tesla’s (TSLA) Model Y. The company is also expanding into adjacent markets, including robotics and micromobility, through spinouts like Mind Robotics and ALSO.
The new package is expected to help retain Scaringe and align his incentives with long-term profitability and stock performance. Unlike Tesla CEO Elon Musk’s recently approved $1 trillion pay package, Scaringe’s deal does not require shareholder approval as it falls under Rivian’s previously approved 2021 equity incentive plan.
Is RIVN Stock a Buy or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on RIVN stock based on five Buys, nine Holds, and five Sells assigned in the past three months. Further, the average RIVN price target of $13.31 per share implies 12.61% downside risk.
