Core Insights - Rivian has established a new 10-year compensation plan for CEO RJ Scaringe, potentially worth up to $4.6 billion, linking his pay to the company's future profitability and stock performance [1][4][8] Group 1: Compensation Plan Details - The new compensation plan is designed to retain the founder and ensure focus on growth and profitability, replacing a previous plan with higher stock price targets [4][6] - The new stock price target range is set between $40 and $140 per share, significantly lower than the previous range of $110 to $295 per share [4][6] - Scaringe will receive options to purchase up to 36.5 million shares of Class A stock, an increase of approximately 16 million shares from the previous plan, with an exercise price of $15.22 per share [6][8] Group 2: Financial Implications - If fully realized, Scaringe could earn around $4.6 billion, while shareholders could see total returns of approximately $153 billion [8] - Rivian's board has also doubled Scaringe's base salary to $2 million, aligning executive compensation more closely with shareholder returns [8] Group 3: Market Context - The announcement of Rivian's plan coincides with Tesla shareholders approving a $1 trillion compensation plan for Elon Musk, which is also linked to future performance and market value targets [9] - Rivian's compensation structure, while not a direct imitation of Tesla's, shows clear influences from Musk's model, as more companies adopt high-incentive plans tied to market growth [9]

Core Viewpoint - Rivian has established a new compensation plan for CEO RJ Scaringe, potentially worth up to $4.6 billion over the next decade, linking his pay to the company's future profitability and stock performance, with lower performance thresholds compared to previous plans [1][4]. Compensation Plan Details - The new plan aims to retain the founder and ensure focus on growth and profitability, replacing a previous plan that set stock price targets between $110 and $295 per share, which Rivian deemed difficult to achieve [4]. - The new stock price target range is set between $40 and $140 per share [4]. - Scaringe will receive options to purchase up to 36.5 million shares of Class A stock, an increase of approximately 16 million shares from the previous plan, with an exercise price of $15.22 per share [6]. Performance and Potential Value - The potential value of the compensation plan is contingent on performance metrics, with estimates suggesting Scaringe could earn around $4.6 billion if all targets are met, while shareholders could see total returns of approximately $153 billion [7]. - Rivian's board has also doubled Scaringe's base salary to $2 million, aligning executive compensation more closely with shareholder returns [7]. Market Context - The announcement of Rivian's new plan coincides with Tesla shareholders approving a $1 trillion compensation plan for Elon Musk, which is also linked to future performance and market value targets [8]. - Rivian's plan, while not a direct imitation, shows characteristics inspired by Musk's approach, reflecting a trend among companies to tie high incentives to potential market growth [8]. Additional Developments - Rivian has disclosed that Scaringe has been granted 1 million stock units in a newly established subsidiary, Mind Robotics, which focuses on industrial AI technology [9]. - Scaringe will chair the board of Mind Robotics and can earn up to 10% economic interest if the company exceeds specific profit thresholds [9].