Electric pickup and SUV manufacturer Rivian has approved a new compensation package for its CEO RJ Scaringe worth up to $4.6 billion over the next decade, according to a recent regulatory filing. The move, which echoes Tesla’s $1 trillion pay package for CEO Elon Musk, ties Scaringe’s payout to the company’s stock performance and profitability goals.
A Tesla-inspired model for executive pay
Rivian said the revised pay plan is aimed at retaining its founder and ensuring focus on long-term growth and profitability. The company, known for its R1S SUV and R1T pickup, is gearing up to launch the R2 SUV in 2026 — a more affordable model designed to compete with Tesla’s Model Y crossover.
Under the new plan, Scaringe is receiving options to buy 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 if Rivian achieves a series of stock-price milestones between $40 and $140 and meets new operating income and cash flow targets over the next decade.
“While Rivian may not be a direct copycat, there are definitely Elon Musk characteristics that are similar,” said Yonat Assayag, partner at ClearBridge Compensation Group. “It’s not to keep up with Musk, but inspired by Musk’s award,” reported Reuters.
Tough targets, but huge potential rewards
The revised plan replaces a previous 2021 package that required Rivian’s share price to reach between $110 and $295, which the company deemed “unlikely to be met.” The new targets are more attainable amid Rivian’s ongoing cost-cutting drive and layoffs affecting 600 employees, or about 4.5% of its workforce.
Industry analysts say the move reflects how companies are using aggressive performance-linked pay to motivate leadership through volatile markets. “Such structures may not always work out for company leaders, many of whom struggle to hit the targets with changing policies and economic headwinds over the years,” said Amit Batish, director at Equilar, to Reuters.
Balancing incentives and shareholder returns
The new package gives Scaringe control over shares worth about 3% of Rivian, in addition to his existing 2% stake. If all milestones are met, shareholders could gain up to $153 billion in value, according to the company. Rivian’s board also doubled Scaringe’s base salary to $2 million, aligning his pay more closely with shareholder performance.
“RJ’s starting position makes this package much more reasonable than Musk’s,” said Vitaly Golomb, managing partner at Mavka Capital and a Rivian investor.
Expanding into AI with Mind Robotics
In a strategic move, Scaringe was also awarded 1 million common units in Mind Robotics, a new Rivian spinoff focusing on industrial AI technology. The CEO will chair its board and hold a 10% economic interest once profits exceed a set threshold.
Rivian said the spinoff will explore next-generation robotics and automation, reinforcing its technological ambitions beyond electric vehicles.
