Rivian’s chief executive officer, RJ Scaringe, is receiving a considerable adjustment to his compensation package, one that includes both an increased base salary and a significant performance-driven equity award valued at as much as $4.6 billion. This information, formally disclosed in a document filed with the U.S. Securities and Exchange Commission last Friday, reveals the company’s strategic decision to reconfigure its executive compensation structure in an effort to secure and motivate its leader during a pivotal transitional stage in the firm’s development as a manufacturer of electric vehicles.
According to the SEC filing, the Rivian board of directors met on Thursday and unanimously chose to terminate Scaringe’s earlier 2021 compensation agreement, replacing it with a newly structured arrangement. The company stated that this move was designed explicitly to “retain and incentivize” Scaringe as he continues to guide Rivian through what it described as the organization’s “critical next phase”—a period that is likely to determine the company’s medium- and long-term viability in the highly competitive EV sector. Under this new structure, Scaringe’s salary will rise from $1 million to $2 million annually, representing a doubling of his direct cash compensation. This increase is paired with an extensive stock option grant, giving him the right to acquire as many as 36.5 million shares of Rivian stock over time.
The revised package is considerably larger than the previous one. For comparison, Scaringe’s earlier 2021 compensation plan had offered him options to purchase about 20.4 million shares, thus the new package represents an expansion of both scale and ambition. Importantly, however, the award is not automatically accessible in full. Instead, the options will vest gradually, contingent upon the achievement of stringent performance metrics. Out of the total, approximately 22 million shares are distributed across eleven separate tranches, each corresponding to specific stock-price milestones that Rivian must meet for Scaringe to gain access. The remaining shares are tied to the company’s ability to meet defined profitability and cash-flow targets by December 31, 2032. In aggregate, the total value of this expanded compensation package could reach as much as $4.6 billion, but only under the condition that Rivian’s stock price climbs to $140 per share.
To contextualize these figures, Rivian’s stock was trading at $15.23 as of the last reported Friday. This means that for Scaringe to fully capitalize on the share-based incentives, the company’s valuation would need to experience an extraordinary increase of about 820%—a feat that underscores both the ambitious and uncertain nature of this arrangement. Marina Hoffmann, a spokesperson for Rivian, elaborated on the logic behind this compensation structure in a statement to Business Insider. She noted that Rivian shareholders would first realize approximately $32 billion in returns before Scaringe himself would earn a single dollar from the stock award, emphasizing that his personal financial gains are entirely contingent upon significant shareholder value creation. Hoffmann further explained that if Scaringe ultimately achieves the full award, Rivian’s shareholders would see a total value creation of around $153 billion—a figure that situates his reward squarely within an outcome-driven framework.
The company also acknowledged that the goals established under the earlier 2021 plan had become largely unattainable. That prior package required Rivian’s stock price to reach $110 merely for the first tranche of shares to vest, a target that, given current market conditions, now appears unrealistic. The new compensation plan, by contrast, lowers the threshold for the initial tranche to a more attainable $40 per share, reflecting an adjustment to align executive incentives with market realities while still maintaining a high-performance standard. Hoffmann characterized the former plan’s metrics as overly aspirational, describing them as “moonshot awards” conceived during the pandemic period, when valuations across the industry often reflected extraordinary optimism rather than present-day fundamentals.
Meanwhile, Rivian is preparing to enter what Scaringe himself has called one of the most consequential stages in its corporate evolution. The company is gearing up for the launch of the R2—an upcoming mid-sized SUV expected to be priced at around $45,000. This model is designed to serve as a more accessible entry point into Rivian’s premium EV lineup, expanding its potential customer base beyond the high-end market segment dominated by its flagship vehicles, which retail around $90,000. Scaringe emphasized in an earlier interview that Rivian’s long-term success depends on expanding its production scale dramatically, eventually reaching a capacity of several million vehicles per year—a goal that plainly requires diversification beyond a single high-priced product line.
In October, Rivian also disclosed layoffs affecting more than 600 employees, equivalent to roughly 4.5% of its workforce, citing both the need to achieve sustainable profitability and the operational demands associated with scaling for the R2 launch. When questioned about the timing of Scaringe’s updated compensation package, Hoffmann explained that the board’s approval reflected the CEO’s performance-driven grant in combination with positive business momentum observed during the third quarter. Indeed, Rivian recently reported a striking 78% year-over-year revenue increase for the quarter, although it still posted a net loss of $1.1 billion—highlighting both its growth trajectory and continued financial challenges.
The revised compensation announcement came just one day after Tesla shareholders approved a similarly large—though vastly more monumental—pay package for CEO Elon Musk. That plan, which could ultimately award Musk as much as $1 trillion if Tesla’s market capitalization reaches $8.5 trillion by 2035, has drawn intense media scrutiny. Nonetheless, Hoffmann stressed that Rivian’s decision to restructure Scaringe’s pay was made independently and was not influenced by the developments at Tesla. With these changes, Rivian is signaling its commitment to ambitious innovation, determined leadership, and long-term value creation—even as it navigates one of the most dynamic and volatile phases in the modern automotive industry.
Sourse: https://www.businessinsider.com/rivian-ceo-rj-scaringe-salary-compensation-pay-package-2025-11
