Rivian Automotive CEO R.J. Scaringe has recently been granted a significant raise, with his base salary now set at $1 million per year. This notable increase in pay surpasses that of Tesla CEO Elon Musk. However, when compared to the salaries of Ford Motor CEO Jim Farley and General Motors CEO Mary Barra, it becomes evident that Scaringe still falls behind. It is essential to note that while salary plays a role in CEO compensation, it is just a fraction of the total package.
According to a recent filing with the Securities and Exchange Commission, Rivian (ticker: RIVN) announced the adjustment in Scaringe’s base salary from $650,000 to $1 million per year. In 2022, Scaringe received a total compensation of approximately $1 million. Over the past three years, his overall compensation amounts to around $424 million. A significant portion of this figure, approximately $421 million, stems from the option to purchase about 27 million shares of Rivian stock based on performance milestones.
It is worth noting that Scaringe outearned Musk in terms of salary in 2022 since Musk does not receive a traditional salary. In fact, Musk’s total compensation for that year amounted to zero, according to the company’s proxy statement.
Elon Musk’s Compensation at Tesla
Elon Musk, the renowned CEO of Tesla (TSLA), has been the subject of much speculation surrounding his compensation. However, there is no need for people to worry. The majority of Musk’s compensation stems from a stock options award granted in 2018, entitling him to purchase over 300 million Tesla shares, contingent upon meeting performance milestones. With Tesla’s recent stock price, this award holds an approximate value of $70 billion.
Over the course of the past three years, Musk’s total compensation has amounted to approximately $734 million. This compensation was earned as he successfully achieved various milestones tied to the 2018 options award. Notably, most of these benchmarks have already been met, allowing Musk to exercise his options.
It is important to note that compensation structures differ between electric vehicle (EV) manufacturers and traditional automakers. Founders such as Rivian’s Scaringe and Tesla’s Musk receive a significant portion of their compensation in the form of company stock. In comparison, General Motors (GM) CEO Mary Barra’s base salary for 2022 stood at $2.1 million. However, her total awarded compensation reached a staggering $27.9 million. In the past three years alone, GM has awarded Barra approximately $79 million.
In summary, Elon Musk’s compensation at Tesla primarily consists of a lucrative stock options award. With impressive performance milestones already achieved, his compensation package clocks in at around $734 million. It is worth noting that EV industry salaries diverge from those observed in traditional automakers, with founders often receiving substantial stocks alongside their salaries. For instance, Mary Barra, the CEO of General Motors, with a base salary of $2.1 million, has netted a remarkable $79 million in total awarded compensation over the past three years.
Executive Compensation in the Auto Industry
Ford CEO Jim Farley receives a base salary of $1.7 million, with a total compensation of approximately $21 million in 2022 and a staggering $55.6 million over the past three years. These figures highlight the substantial earnings of leaders within the traditional auto industry.
When compared to their counterparts in the S&P 500 companies, the average CEO’s total compensation for 2022 amounts to around $16.7 million, as reported by the AFL-CIO.
Overall, these numbers underscore the significant financial rewards that accompany top leadership positions in the automotive sector.