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Scaringe's new pay plan linked to reduced stock price

targets

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New package also hinges on new profit, cash flow

milestones

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Rivian says aims to align CEO pay with shareholder returns

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Scaringe's base salary doubled to $2 million

(Adds details in paragraphs 9 and 10)

By Abhirup Roy and Akash Sriram

Nov 7 (Reuters) -

EV maker Rivian on Friday said it was giving its

CEO a revised pay package worth as much as $4.6 billion over the

next decade, a deal modeled on larger rival Tesla's

plan for paying CEO Elon Musk, and linked to new profit targets

and reduced share price milestones.

The overhaul highlights Rivian's push to retain its founder

and keep him focused on growth and profitability as the

automaker, known for its R1S SUVs and R1T pickups, gears up to

launch next year its smaller, more affordable R2 SUV that will

compete with Tesla's best-selling Model Y crossover.

The move comes a day after Tesla shareholders approved a

record $1 trillion pay package for CEO Elon Musk.

Under the new plan, Scaringe is receiving options to

purchase up to 36.5 million shares of Rivian's Class A stock,

about 16 million more than his previous grant, at an exercise

price of $15.22 apiece, the company said in a filing with the

U.S. Securities and Exchange Commission.

The award will vest only if Rivian achieves reduced

stock-price milestones ranging from $40 to $140 a share over 10

years, as well as new operating income and cash flow targets

over the next seven years.

The previous pay package, awarded in 2021, was linked to

Rivian's share price reaching $110 a share and went up to $295.

Rivian canceled that saying the targets tied to that grant were

unlikely to be met.

Rivian shares closed at $15.22 on Thursday. The one-year

median price target for the company stands at about $14,

according to data compiled by LSEG.

"The rigorous and challenging milestones associated with

this option award are structured in such a way that ensures the

options only vest should the company deliver significant value

to our shareholders," a Rivian spokesperson said in a

statement.

If Rivian hits all the milestones as part of the package, he

will get up to $4.6 billion, including the costs of exercising

options, Reuters' calculation showed, while Rivian said

shareholders will gain $153 billion in value.

The potential $4.6 billion payout is equal to roughly a

quarter of Rivian's $18.7 billion market value and marginally

higher than its $4.4 billion cash balance, at the end of

September.

Rivian's board also doubled Scaringe's base salary to $2

million, saying the changes were made with input from an

independent compensation consultant and were designed to better

align pay with shareholder returns.

Separately, Scaringe was granted 1 million common units in

Mind Robotics, a newly formed Rivian spinoff with external

funding developing industrial AI technology, giving him up to a

10% economic interest once the business profit exceed a certain

threshold.

Scaringe will serve as chairman of the board of directors

for Mind Robotics, and Rivian is a shareholder of the company,

it had said earlier this week.