Article on CEO compensation

[Oldsmobile_Mike]

Not sure if this has been posted before. Just sharing for the RJ reference:

"CEOs at fellow EV startups aren’t making anywhere near Rawlinson’s total compensation, either. Rivian Automotive CEO Robert Scaringe earned roughly $1 million in 2022, even though his company is now worth over $22 billion, over 50% more than Lucid Motors’ roughly $14 billion."

https://fortune.com/2023/09/05/luci...usk-criticism-performance-based-compensation/

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[Oldsmobile_Mike]

Behind paywall:


Lucid CEO’s $379 million annual pay draws criticism from billionaire Elon Musk: ‘Beware any company where leadership compensation is not linked to performance’

BYWILL DANIEL

September 5, 2023 at 12:53 PM EDT



Peter Rawlinson, CEO of Lucid is seen at The Quail, A Motorsport Gathering on August 18, 2023 in Carmel, California.



It’s rare for CEOs to rebuke their peers’ outlandish pay packages—mostly because they’d be throwing stones from glass houses—but Lucid Motors’ CEO Peter Rawlinson drew sharp criticism from his EV rival Elon Musk on Monday after earning the title of the highest paid executive in the automotive business.

“Beware any company where leadership compensation is not linked to performance,” the Tesla CEO wrote on X in response to a post about Rawlinson’s pay.

​

Rawlinson received a $379 million compensation package in 2022 for his role at the luxury EV maker Lucid, including a $575,000 base salary, $5.5 million of stock options, and an incredible $373 million in stock awards, according to a new CEO compensation survey from Automotive News and Equilar.

Notwithstanding Musk’s criticism, Rawlinson earned his huge pay package after hitting market-cap targets for Lucid early last year, SEC filings show. Lucid, like 88% of the 250 largest publicly traded U.S. firms, now uses performance-based compensation for at least some portion of its executive pay.

“One reason we see pay-for-performance models favored is they are generally viewed more favorably by the shareholders, to the extent that the achievement of financial performance is linked to value creation for the shareholders,” Noah Kaplan, a managing director at the management consulting firm FW Cook, told Fortune of the trend in March.

Still, it makes sense that Musk would believe Rawlinson’s pay was not linked to performance. After all, Lucid’s stock fell more than 82% in 2022, and the company earned total revenue of just $608.2 million. Also, when comparing Rawlinson’s pay to his peers in the automotive business, his latest compensation package appears expreme. Rawlinson’s total compensation in 2022 was 11 times greater than the $34 million earned by the second-highest-paid automotive CEO, GM’s Mary Barra, and 21 times greater than the $18.3 million Ford CEO Jim Farley made.

CEOs at fellow EV startups aren’t making anywhere near Rawlinson’s total compensation, either. Rivian Automotive CEO Robert Scaringe earned roughly $1 million in 2022, even though his company is now worth over $22 billion, over 50% more than Lucid Motors’ roughly $14 billion.

Musk, for comparison, didn’t earn any money directly from his role as Tesla CEO last year, but the billionaire has been criticized for the $23 billion bonus he received in 2021 after hitting performance targets for both earnings and stock price appreciation — a deal that was unprecedented when it was struck in 2018. And, as Tesla’s largest shareholder, Musk continues to benefit handsomely from the company’s stock price growth.

 

[mkg3]

RJ's salary may be just a $1m but what is his RSU worth?

There has been many CEOs that got a salary of $1.00 and RSUs worth millions.

 

[manitou202]

The survey is misleading because it includes stock they sold that year as part of their compensation. So in theory if Rawlinson didn't sell any stock (or exercise options) he would have only made $575k in 2022. As a comparison Elon sold $22 Billion worth of stock in 2021, but none in 2022. So they report Elons pay as zero (he takes no salary) in 2022 because he didn't sell any stock.

A better way to measure their pay is the new stock grants they are award for that year, not stock that was sold. Any stock they sell was granted in prior years and may have been worth a lot less when it was granted depending on the stock price at that time.

Here is article on RJ.

"In 2022, Scaringe received total compensation of about $1 million. Over the past three years, the Rivian CEO’s total compensation amounts to about $424 million. About $421 million of that came from the option to purchase about 27 million shares of Rivian stock, based on performance milestones.

Scaringe made more than Musk in 2022 on a salary basis, because Musk doesn’t earn a salary. In 2022, Musk’s total compensation amounted to, well, nothing, according to the company’s proxy statement.

People shouldn’t worry about the Tesla (TSLA) CEO. Most of Musk’s compensation is derived from a 2018 stock options award, which gives the option to purchase more than 300 million Tesla shares, depending on performance milestones. Based on Tesla’s recent stock price, that award is worth somewhere in the range of $70 billion."

https://www.barrons.com/articles/rivian-ceo-salary-tesla-elon-musk-evs-63adbbf8#


This doesn't justify their pay. All of them are paid excessively in my opinion.

 

[Count Orlok]

The Count laughs at the twixxer shadow ceo arguing ceo pay should be tied to performance.

 

[iansriv]

The Count laughs at the twixxer shadow ceo arguing ceo pay should be tied to performance.

Is he the "shadow CEO" or the grim reaper of X, or whatever it's called at the moment?

 

[COdogman]

Is he the "shadow CEO" or the grim reaper of X, or whatever it's called at the moment?

I call him ‘Space Karen’

 

[Donald Stanfield]

The survey is misleading because it includes stock they sold that year as part of their compensation. So in theory if Rawlinson didn't sell any stock (or exercise options) he would have only made $575k in 2022. As a comparison Elon sold $22 Billion worth of stock in 2021, but none in 2022. So they report Elons pay as zero (he takes no salary) in 2022 because he didn't sell any stock.

A better way to measure their pay is the new stock grants they are award for that year, not stock that was sold. Any stock they sell was granted in prior years and may have been worth a lot less when it was granted depending on the stock price at that time.

Here is article on RJ.

"In 2022, Scaringe received total compensation of about $1 million. Over the past three years, the Rivian CEO’s total compensation amounts to about $424 million. About $421 million of that came from the option to purchase about 27 million shares of Rivian stock, based on performance milestones.

Scaringe made more than Musk in 2022 on a salary basis, because Musk doesn’t earn a salary. In 2022, Musk’s total compensation amounted to, well, nothing, according to the company’s proxy statement.

People shouldn’t worry about the Tesla (TSLA) CEO. Most of Musk’s compensation is derived from a 2018 stock options award, which gives the option to purchase more than 300 million Tesla shares, depending on performance milestones. Based on Tesla’s recent stock price, that award is worth somewhere in the range of $70 billion."

https://www.barrons.com/articles/rivian-ceo-salary-tesla-elon-musk-evs-63adbbf8#


This doesn't justify their pay. All of them are paid excessively in my opinion.

This is the USA not some communist country. No one here needs to justify their pay.

 

[Count Orlok]

Back when the Count had a job his employer's compensation packages were by statute public knowledge. He used to tell prospective employees that if they want to understand the power struggles within his department all they need to do is look up salaries on the HR website. You see he had the golden handcuffs whereby the Count could not be easily fired so he was honest with others looking in from the outside.

 

[Zeusy Zeus]

What worries me is no insiders buying shares. All I’ve seen is selling and no buying. Usually when a company is on the rise you’ll see lots of insider buying. Doesn’t give me much confidence in management and the outlook for the stock.

 

[GaryGR]

This is the USA not some communist country. No one here needs to justify their pay.

Because CEO pay only needs to be justified to shareholders in a communist country? Strange perspective...

 

[LevelHeaded]

Because CEO pay only needs to be justified to shareholders in a communist country? Strange perspective...

Exactly. Executive pay is absolutely the within the realm of reasonable concern for shareholders, employees, potential investors, etc.

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