Form 4: Rivian CEO Scaringe Receives New Performance-Based Equity Award

Rivian Automotive CEO Robert J. Scaringe was granted a new 36.5 million share performance-based equity award, replacing a prior 2021 award.

Summary

• Rivian CEO Robert J. Scaringe received a new 2025 CEO Award on November 6, 2025.
• This new award replaces the previously granted 2021 CEO Performance Award, which was cancelled.
• The new award consists of stock options for 36,500,000 shares of Class A Common Stock.
• The exercise price for these new options is $15.22 per share, which was the closing price of Rivian's Class A Common Stock on November 6, 2025.
• The new options have an expiration date of November 6, 2035.
• Vesting for the new award is split: 22,000,000 shares vest based on the Class A Common Stock price exceeding various thresholds, and 14,500,000 shares vest upon Rivian achieving certain financial performance targets.
• All vesting is contingent on Mr. Scaringe's continued service as CEO.
• A time-based stock option from the 2021 award, covering 4,922,182 shares (vesting in 6 equal annual installments), remains outstanding and will continue to vest.
• The performance-based portion of the 2021 award, totaling 20,355,946 shares, was disposed of as part of this exchange.

Sentiment

Score: 7

Explanation: The granting of a new, substantial performance-based equity award for the CEO, tied to both stock price thresholds and financial targets, is a positive step towards aligning executive incentives with long-term shareholder value. However, the cancellation of a prior award and the lower exercise price of the new options could be viewed with some caution.

Positives

• The new 2025 CEO Award is heavily performance-based, aligning CEO incentives with shareholder value creation through stock price thresholds and financial targets.
• The significant number of shares (36.5 million) in the new award demonstrates a long-term commitment from the CEO.
• The new award has a longer expiration date (2035) compared to the previous award's expiration (2031 for the time-based portion), providing a longer incentive horizon.

Negatives

• The cancellation of the 2021 CEO Performance Award, which had an exercise price of $21.72, and its replacement with an award at a lower exercise price of $15.22, could be viewed as a repricing of executive compensation.

Risks

• Potential for dilution from the large number of shares (36.5 million) if the options are exercised.
• Risk that performance targets for the 2025 CEO Award may not be met, leading to no value for the CEO from these specific options.

Future Outlook

The new 2025 CEO Award is structured to incentivize long-term stock price appreciation and the achievement of specific financial performance targets, indicating management's focus on future growth and profitability for Rivian Automotive, Inc.

Management Comments

• The 2021 CEO Performance Award was cancelled in exchange for the granting of the 2025 CEO Award on November 6, 2025.
• The time-based option awarded concurrently with the 2021 CEO Performance Award remains outstanding and will continue to vest according to its terms.
• The 2025 CEO Award vests subject to the per share price of the Issuer's Class A Common Stock exceeding various thresholds, and upon the Issuer achieving certain financial performance targets, in each case subject to the Reporting Person's continued service in his current role on such vesting date.

Industry Context

This type of performance-based equity award is a common practice in the automotive and technology sectors, particularly for growth companies like Rivian, to align executive compensation with long-term shareholder value creation and strategic objectives. The shift from a prior award to a new one with updated targets is also typical as company strategies and market conditions evolve.

Corporate Governance

Related Party Transactions

• Granting of the 2025 CEO Award to Robert J. Scaringe, the Chief Executive Officer and a Director of Rivian Automotive, Inc., constitutes a related party transaction.

Stakeholder Impact

• Shareholders: Potential for increased shareholder value if the CEO's performance-based targets are met, leading to stock price appreciation. Potential dilution from the exercise of a large number of options.
• Employees: May signal a strong commitment from leadership to the company's long-term success, potentially boosting morale.
• Management: The CEO's compensation is now more directly tied to the company's stock performance and financial achievements, increasing personal incentive.

Next Steps

• Continued vesting of the remaining time-based stock option from the 2021 award.
• Achievement of stock price thresholds and financial performance targets for the 2025 CEO Award to vest.

Key Dates

Recommendation

The new performance-based compensation structure for the CEO is a positive for long-term alignment with shareholder interests, indicating a focus on future growth and profitability. However, the cancellation of a prior award and the lower exercise price of the new options introduce some ambiguity. Without further details on the specific performance targets and the rationale for the award exchange (which are likely in the referenced 8-K), a 'hold' recommendation is prudent, awaiting more comprehensive information on the company's strategic direction and financial performance.

Keywords

Rivian Automotive, RIVN, Robert J. Scaringe, CEO compensation, stock options, equity award, performance award, SEC Form 4, insider transaction, executive compensation