Rivian insiders should buy stock asap to boost employee morale

[NY_Rob]

And what happens when competitors start to smell blood and try to start poaching Rivian employees in mass?

Oh, you mean like Rivian did to Tesla.. well Tesla survived, Rivian will too I imagine.

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[uthatch]

With the exception of possibly Lucid, there isn't anyone else that Rivian is in a competitive position to poach from.

Edit: if employees feel that their vested/vesting options are going to materially increase in value if they stay with the firm, they stay. Remember, if you leave, you lose all unvested options.

Actually there are plenty of data out there that shows employee retention and happiness is more influenced by their ability to successfully do their jobs than compensation. Of course compensation does need to be commensurate with the job. Most people look at unexpected increased stock value as more of a windfall than as a motivating driver. Again, this is not my opinion, it’s based in data.

 

[DuoRivians]

Oh, you mean like Rivian did to Tesla.. well Tesla survived, Rivian will too I imagine.

Tesla has the luxury of having a deeper pool to recruit employees from, because they are more stable financially. Of course, it means working for Elon...

Tesla couldn't care less if they loss employees to Rivian.

Rivian, however, very likely isn't in the same spot. Replacing important employees for them will be harder.

 

[DuoRivians]

Actually there are plenty of data out there that shows employee retention and happiness is more influenced by their ability to successfully do their jobs than compensation. Of course compensation does need to be commensurate with the job. Most people look at unexpected increased stock value as more of a windfall than as a motivating driver. Again, this is not my opinion, it’s based in data.

Yes, the data says this for established companies. But, for high growth companies/start-ups, financial rewards matter just as much.

 

[a76marine]

Buy-backs, special dividend are basically the same thing. As someone posted earlier, RIVN should never have been $120/share at or around IPO. It was over-valued and yes, many that bought feel hard done by. Bad luck, move on.

Too many people reading Barron's or listening to Cramer/Motley Fool. Are we talking about investing in shares or the desire to own a cool car?

You're missing the point. OP is suggesting that RJ and other C-level executives, who have the option to buy/sell their personally owned shares, should make a purchase to show that RJ et al. believe the company is undervalued and will only strengthen into the future.

For reference, when I worked at a public company and received a notice that our CFO sold off millions of dollars of shares (which happened a few times, they apparently were swimming in shares) it always made me wonder if they knew something we didn't about the company's future.

 

[DuoRivians]

You're missing the point. OP is suggesting that RJ and other C-level executives, who have the option to buy/sell their personally owned shares, should make a purchase to show that RJ et al. believe the company is undervalued and will only strengthen into the future.

For reference, when I worked at a public company and received a notice that our CFO sold off millions of dollars of shares (which happened a few times, they apparently were swimming in shares) it always made me wonder if they knew something we didn't about the company's future.

Yes, exactly.

Imagine the opposite. If RJ, Claire, etc decided to *sell* shares (outside of 10b5 plan), that'll send a negative signal to employees.

Buying shares signals confidence in the company.

 

[a76marine]

Actually there are plenty of data out there that shows employee retention and happiness is more influenced by their ability to successfully do their jobs than compensation. Of course compensation does need to be commensurate with the job. Most people look at unexpected increased stock value as more of a windfall than as a motivating driver. Again, this is not my opinion, it’s based in data.

The data says that an employee with shares in the company wouldn't be at all dissuaded by the constant free-fall of the stock price?

Stock price may not matter to all, but certainly to some. Data trends and analysis can't be applied to all.

 

[uthatch]

The data says that an employee with shares in the company wouldn't be at all dissuaded by the constant free-fall of the stock price?

Stock price may not matter to all, but certainly to some. Data trends and analysis can't be applied to all.

Right, which is exactly why 1 person is not statistically significant. And Rivian does not have just 1 employee, they have thousands, making their employee base statistically significant.

 

[SDH]

You're missing the point. OP is suggesting that RJ and other C-level executives, who have the option to buy/sell their personally owned shares, should make a purchase to show that RJ et al. believe the company is undervalued and will only strengthen into the future.

For reference, when I worked at a public company and received a notice that our CFO sold off millions of dollars of shares (which happened a few times, they apparently were swimming in shares) it always made me wonder if they knew something we didn't about the company's future.

I was actually referring to someone earlier in the thread who mentioned stock buys backs rather than 'Insider' buying. I understood the OP's post.

Yes, RJ could buy a boat load of shares and the share price would pop for a day or two, then it would return to fundamentals.

 

[DuoRivians]

I was actually referring to someone earlier in the thread who mentioned stock buys backs rather than 'Insider' buying. I understood the OP's post.

Yes, RJ could buy a boat load of shares and the share price would pop for a day or two, then it would return to fundamentals.

RJ did it in May 16, 2022. It put a floor on the stock price for a while. (Until Ford sold in mass and $tsla dragged down the entire EV sector in Dec 2022).

https://www.sec.gov/Archives/edgar/data/1874178/000120919122029121/xslF345X03/doc4.xml

 

[SDH]

If you're wondering if I'm speaking my own book, no. But I am going to own a Rivian truck and SUV, and want the company to succeed.

Fear not, Rivian won't disappear. There's always someone who'll buy them up on the cheap if everything goes to Sh!t for RJ. Heck, loads of Middle East and Asian money looking for a 'clean' home.

 

[Tahoe Man]

Insider buying and selling isn't anything new, and if it worked as an reliable indicator for future long term prosperity or hardship it would have been exploited long ago.

Bottom line is Rivian needs to keep the cash burn rate low.

 

[madgrey]

Actually there are plenty of data out there that shows employee retention and happiness is more influenced by their ability to successfully do their jobs than compensation. Of course compensation does need to be commensurate with the job. Most people look at unexpected increased stock value as more of a windfall than as a motivating driver. Again, this is not my opinion, it’s based in data.

I agree.

There's a school of though that salary and compensation are "hygiene factors" - they don't serve as a source of satisfaction or motivation in the long term. Other factors like achievement, responsibility recognition are better motivators.

That being said, I've been in the position (twice) where I was a new employee with stock options watching the price go up while I waited for my opportunity to "cash in" only to see the stock drop precipitously. It's not a good feeling but I believed (in one of the companies) and stuck with it.

 

[a76marine]

Right, which is exactly why 1 person is not statistically significant. And Rivian does not have just 1 employee, they have thousands, making their employee base statistically significant.

But you have no way of knowing what the ratio is of those who care, and those who do not, among those thousands. Already in this thread you've got more like a 1:2 ratio of those who care and those who do not. This means OP's hypothesis is not disproven.

 

[DuoRivians]

But you have no way of knowing what the ratio is of those who care, and those who do not, among those thousands. Already in this thread you've got more like a 1:2 ratio of those who care and those who do not. This means OP's hypothesis is not disproven.

Other than the personal financial risk by the insiders, there's no downside for them to buy more shares to signal confidence to the company.

If an employee truly doesn't care, it won't affect them. But for those who care, it'll matter.

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