Rivian board gives founder and CEO RJ Scaringe a new pay package worth as much as $4.6B

The board of Rivian has introduced a new pay package for the American automaker’s founder and CEO, RJ Scaringe, incentivizing him to stay on target and maintain growth over the next decade. If it comes to fruition, Scaringe’s revamped pay package could be one of the most robust in history.

Rivian, although a growing name in the automotive conversation, remains a relatively young brand. While it took some time (and plenty of money) to scale, Rivian finally hit its stride in R1 and EDV production at its flagship facility in Normal, IL.

Since then, the American EV automaker’s financial reports have been trending upward, most recently in its Q3 financials, which detailed an increase in deliveries, revenues, and gross profits. Through thick and thin, Rivian’s founder and CEO, RJ Scaringe, has always been at the helm.

The company was originally founded as Mainstream Motors in 2009 by Scaringe himself, an MIT grad who studied engineering and lean manufacturing. Scaringe grew up near Melbourne, Florida, where he would work on cars with his neighbor and spend much of his time outdoors hiking and exploring.

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As Scaringe grew older, he found himself driving miles into nature to hike, and became aware that he was contributing to the pollution of an environment he looked to preserve. As a result, the company was born.

Flash forward to today, and Rivian is currently selling its second-generation R1S and R1T EVs, as well as a new flagship model called the R2, which is due in the first half of 2026. Aside from helping battle climate change and provide consumers with dependable and rugged alternatives to traditional combustion pickups and SUVs, Rivian’s CEO does have to make a living, and has a pay plan in place.

However, Rivian’s board has announced a revamped plan with new and potentially more realistic milestones that could pay its founder and CEO handsomely.

Rivian CEO’s pay plan tied to stocks and financial targets

As reported by Reuters, Rivian’s board has decided to nix CEO RJ Scaringe’s current pay plan, which it said would likely not be met. Instead, Scaringe’s future as Rivian’s founder is secure through a new plan, complete with lower goals regarding share growth. The board also voted to double Scaringe’s base salary to $2 million.

According to a filing with the SEC, this new plan grants Rivian’s CEO options to purchase up to 36.5 million shares of the automaker’s Class A stock at an exercise price of $15.22 per share. Reuters notes that the purchase option involves approximately 16 million more shares than the previous grant awarded to Scaringe in 2021.

According to the new payment plan, the CEO’s award will be realized if Rivian achieves reduced stock-price milestones, which range from $40 to $140 per share over the next decade. That’s a more manageable number compared to stock milestones in the now-defunct pay package that required Rivian to reach a share price between $110 and $295 each.

Other required milestones include operating income and cash flow targets over the next seven years. If Rivian hits all the milestones in this revised package, its CEO will rake in up to $4.6 billion, while shareholders will gain $153 billion in value.

This news is quite topical as Tesla shareholders recently approved an astronomical pay package of $3 trillion for CEO Elon Musk, who, unlike Scaringe and despite what he says, is not a founder of the company he leads.

The revamped focus on growth and profits for the company, its CEO, and Rivian shareholders comes just a few weeks after Rivian announced it was laying off over 4% of its staff to lean down ahead of the R2 launch. R2 has a powerful hype train behind it, as a smaller, more affordable Rivian EV that aims to compete with the ultra-popular Tesla Model Y.