Rivian has introduced a substantially revised compensation structure for its founder and chief executive officer, RJ Scaringe, signaling both a renewed vote of confidence in his leadership and a strategic recalibration of the company’s long-term incentive framework. According to a recent regulatory filing, the electric vehicle manufacturer has granted Scaringe a new, performance-contingent stock award that could ultimately be valued at an estimated five billion dollars — but only if every one of the stringent performance benchmarks established in the plan is achieved. This new arrangement intertwines Scaringe’s personal financial rewards with Rivian’s corporate success far more tightly than before, reinforcing the company’s belief that future growth and shareholder value creation must be directly aligned with executive motivation.
In addition to this performance-based incentive, Scaringe’s base annual salary has been officially increased to two million dollars, effectively doubling his previous pay level. The filing further reveals that Scaringe has been granted a ten percent ownership interest in Mind Robotics, Rivian’s newest spinout venture, underscoring the firm’s intent to position its top leader at the forefront of its most innovative technological offshoots. This development was publicly disclosed only a day after Tesla shareholders voted to approve an unprecedented compensation package for CEO Elon Musk — a plan whose potential value has been estimated at up to one trillion dollars, marking the single largest executive compensation approval in corporate history. Rivian’s announcement, although substantially smaller in scale, inevitably invites comparison with Tesla’s approach, given both companies’ prominent roles in shaping the modern electric vehicle landscape.
There is, however, a core procedural difference between the two packages: Scaringe’s new compensation plan did not require shareholder approval. Instead, it was authorized directly by Rivian’s board of directors through its compensation committee. In doing so, the committee simultaneously decided to cancel a previous, equivalently sized performance award granted to Scaringe in 2021 under the same equity incentive plan that had been adopted company-wide that year. While the framework of the program remains legally valid, the earlier award was deemed unrealistic given present market conditions and Rivian’s current stock trajectory.
The board’s reassessment was driven by the perception that achieving the 2021 award’s conditions had become highly improbable. That earlier package consisted of roughly 20,355,946 stock options, each structured to vest in phases that correlated with ambitious stock price targets. Specifically, if within six years of the grant date Rivian’s share price rose successively beyond thresholds of $110, $150, $220, and $295 per share, Scaringe would be permitted to purchase corresponding tranches of stock at an exercise price of only $21.72 per share. Initially, this plan appeared promising. When Rivian’s initial public offering occurred in November 2021, the stock surged to around $129, briefly validating the possibility of reaching the first target. Yet the optimism proved short-lived: over the subsequent six months, share prices slid to approximately $30, and through the following years they have largely oscillated between $10 and $20. Such prolonged stagnation rendered the original performance award effectively unattainable, leaving Scaringe unable to realize even partial value from a package once projected to exceed six billion dollars.
According to the filing, this situation created what Rivian termed a “lack of incentive,” implying that the motivational function of the initial award had eroded. To restore that sense of alignment and drive, the compensation committee opted to withdraw the underperforming 2021 grant and replace it with the newly structured performance plan. A formal statement to TechCrunch confirmed that the decision was based on extensive review and consultation with an external, independent compensation expert. The committee asserted that the new performance stock option award, coupled with the CEO’s salary increase, is explicitly intended to anchor Scaringe’s ongoing leadership through Rivian’s critical next phase — which includes executing the company’s technology roadmap and launching the upcoming R2 model. The statement emphasized retention and accountability, highlighting that the redesigned arrangement aims to tie personal gain strictly to demonstrable corporate progress.
Rivian characterized the award’s design as purpose-built to ensure that any eventual payouts occur solely if the company delivers measurable, substantial returns to its shareholders. In concrete terms, Scaringe will not realize a single dollar from the package unless he first contributes to generating approximately thirty-two billion dollars in additional enterprise value for Rivian. Should all milestones ultimately be met, the model forecasts total shareholder value creation of roughly one hundred fifty-three billion dollars — a figure that, if reached, would signify a remarkable transformation for the relatively young automaker.
The details of the new performance arrangement are extensive. It authorizes a maximum of 36.5 million potential shares that Scaringe may acquire over a decade, contingent upon meeting clearly defined operational and market performance obstacles. If every benchmark is achieved within that ten-year timeframe, the CEO’s ownership stake in Rivian could expand by an additional three percent. To contextualize, Scaringe currently possesses about one percent of Rivian’s equity — a proportion that recently declined from roughly two percent after he transferred a portion of his holdings to his ex-wife as part of their divorce settlement, as first reported by TechCrunch. Of the total share options available under the new plan, approximately 22 million are explicitly linked to future stock price thresholds: two million shares become exercisable once Rivian’s market price reaches $40, with subsequent two-million-share tranches activating upon each $10 increment thereafter, up to a maximum target price of $140 per share.
The remaining 14.5 million stock options are tied to internally focused performance goals, specifically adjusted operating income and cash flow milestones. These metrics are designed to measure not only market valuation but also the company’s underlying financial health and operational efficiency. To exercise any of these options, Scaringe would be required to pay a strike price of $15.22 per share, translating to an aggregate cost of around $555 million should he opt to purchase all eligible shares. In essence, the award represents a sophisticated balancing act between ambition and performance accountability, linking personal financial potential with Rivian’s sustained profitability and market expansion. Through this recalibrated compensation philosophy, Rivian aims to underscore a long-term commitment to its CEO while simultaneously reinforcing the company’s strategic alignment with investor expectations and the evolving dynamics of the global electric vehicle sector.
Sourse: https://techcrunch.com/2025/11/07/rivian-gives-rj-scaringe-a-new-pay-package-worth-up-to-5b/
