DEF 14A of Rivian Automotive, Inc. / DE
Filed Apr 29, 2024 · FY20230001874178-24-000027
Nominees for Class III Director (terms to expire at the 2027 Annual Meeting)
| Jay Flatley | | | | | Age | Director Since | | | 71 | 2021 | | Director | Mr. Flatley has served as a member of our Board of Directors since May 2021. Mr. Flatley most recently served as acting Chief Executive Officer of Zymergen Inc., a biofacturing company, from August 2021 through October 2022. Mr. Flatley served as Chairman of the board of directors of Illumina, Inc., a public company focused on sequencing and array-based solutions for genetic analysis, from January 2020 to May 2021, after previously serving as Executive Chairman from July 2016 to January 2020, as Chief Executive Officer from December 2013 to July 2016 and as the President and Chief Executive Officer from October 1999 to December 2013. Prior to that, Mr. Flatley was co-founder, President, Chief Executive Officer, and a director of Molecular Dynamics, a life sciences company focused on genetic discovery and analysis, from July 1994 until its sale to Amersham Pharmacia Biotech in September 1998. Mr. Flatley currently serves as Chairman of the board of directors of Cellanome, a biotechnology company focused on developing a unique multiomics platform to measure biology, Chairman of the board of directors of the Wellcome Leap Fund, a non-profit focused on human health innovation, on the board of trustees for The Salk Institute, a non-profit focused on mentoring future generations of researchers, Chairman of the board of directors of Iridia, Inc., a private nanotechnology data storage company, and on the board of directors of Denali Therapeutics Inc., a biopharmaceutical company. Mr. Flatley has also served on the boards of directors of Coherent, Inc., a public company and provider of lasers and laser-based technologies, and Zymergen Inc. Mr. Flatley holds a B.S. and M.S. in Industrial Engineering from Stanford University and a B.A. in Economics from Claremont McKenna College. We believe Mr. Flatley’s leadership and manufacturing experience as a senior executive and director of several public companies qualifies him to serve on our Board of Directors. | |
Nominees for Class III Director (terms to expire at the 2027 Annual Meeting)
| John Krafcik | | | | | Age | Director Since | | | 62 | 2023 | | | Mr. Krafcik has served as a member of our Board of Directors since July 2023. Mr. Krafcik served as Chief Executive Officer of Waymo LLC, an autonomous driving technology company and an independent company of Google's parent company Alphabet, Inc., from September 2015 to May 2021, and served as a consultant to Waymo from May 2021 to May 2022. Prior to that, from April 2014 to September 2015, Mr. Krafcik served as President of TrueCar, Inc., a publicly traded automotive pricing and digital retailing website company, and as a director of TrueCar from February 2014 until March 2020. Prior to TrueCar, Mr. Krafcik was with Hyundai Motor America, a South Korean automaker, from March 2004 to December 2013, during which time he served as President and Chief Executive Officer from November 2008 to December 2013 and as Vice President of Product Development and Strategic Planning from March 2004 to November 2008. Prior to joining Hyundai, Mr. Krafcik was with Ford Motor Company, where he held various product development leadership positions. Mr. Krafcik currently serves on the supervisory board of Daimler Truck AG, a German commercial vehicle manufacturer. Mr. Krafcik holds a Bachelor of Science in Mechanical Engineering from Stanford University and a Masters in Management from the Sloan School of Management at the Massachusetts Institute of Technology. We believe that Mr. Krafcik’s extensive leadership and product development experience in the automotive industry qualifies him to serve on our Board of Directors. | | | Director | | |
Class I Directors (terms to expire at the 2025 Annual Meeting)
Class I Directors (terms to expire at the 2025 Annual Meeting) The current members of the Board of Directors who are Class I Directors are as follows:
Class I Directors (terms to expire at the 2025 Annual Meeting)
| Name | Age | Served as a Director Since | Position with Rivian | | Robert J. Scaringe | 41 | 2009 | Chief Executive Officer and Chairman of the Board of Directors | | Peter Krawiec | 52 | 2019 | Director | | Sanford Schwartz | 71 | 2019 | Director |
Class I Directors (terms to expire at the 2025 Annual Meeting)
The principal occupations and business experience, for at least the past five years, of each Class I Director are as follows:
Class I Directors (terms to expire at the 2025 Annual Meeting)
| Robert J. Scaringe | | | | | Age | Director Since | | | 41 | 2009 | | | Dr. Scaringe founded Rivian in June 2009 and has since served as our Chief Executive Officer and member of our Board of Directors. Dr. Scaringe was designated as the Chairman of our Board of Directors in March 2018. While serving in these roles, Dr. Scaringe has led every major milestone achieved by the Company to date, including establishing its vertically integrated technology platforms, building multi-program manufacturing capabilities and developing meaningful partnerships. Dr. Scaringe holds a B.S. from Rensselaer Polytechnic Institute and an M.S. and Ph.D. in Mechanical Engineering from the Sloan Automotive Laboratory at the Massachusetts Institute of Technology. We believe Dr. Scaringe’s operational expertise, leadership and continuity that he brings as our Founder and Chief Executive Officer, and his educational experience in the automotive industry qualifies him to serve on our Board of Directors. | | | Chief Executive Officer and Chairman of the Board of Directors | | |
Class I Directors (terms to expire at the 2025 Annual Meeting)
| 4 | Rivian 2024 Proxy Statement | |
Class I Directors (terms to expire at the 2025 Annual Meeting)
| Peter Krawiec | | | | | Age | Director Since | | | 52 | 2019 | | Director | Mr. Krawiec has served on our Board of Directors since February 2019. He has served as Senior Vice President of Worldwide Corporate and Business Development at Amazon.com, Inc., a publicly-held global technology company, since March 2021. Prior to this role, Mr. Krawiec served as Vice President of Worldwide Corporate Development at Amazon from April 2007 to March 2021 and as Director of Worldwide Corporate Development at Amazon from October 2004 to April 2007. Earlier in his career, Mr. Krawiec spent seven years working in venture capital and investment banking. Mr. Krawiec holds a B.A. in Economics from Trinity College and an M.B.A. from the Kellogg School of Management at Northwestern University. We believe Mr. Krawiec’s experience involving strategic acquisitions, investments, and partnerships in the technology industry, as well as his venture capital and investment banking background, qualifies him to serve on our Board of Directors. | |
Class I Directors (terms to expire at the 2025 Annual Meeting)
| Sanford Schwartz | | | | | Age | Director Since | | | 71 | 2019 | | Director | Mr. Schwartz has served on our Board of Directors since September 2019. Mr. Schwartz has held several roles at Cox Enterprises, Inc. and its subsidiary businesses, an automotive and media conglomerate, which he joined in 1985. Since January 2021, Mr. Schwartz has served as Chief Executive Officer of the Cox Family Office, helping to guide family investments and estate planning for the company’s shareholders. Prior to this role, he served as President and Chief Executive Officer of Cox Automotive Inc., a global automotive services and software company, from his appointment in 2014, in addition to President of Manheim, a provider of end-to-end wholesale vehicle solutions, from his appointment in 2011. Prior to this role, Mr. Schwartz served as President of Cox Media Group, a media conglomerate, in various roles including serving as the President of AutoTrader and AutoTrader Publishing from 2006 to 2008. Previously, he served as President of Cox Arizona Publishing, Executive Vice President of the Austin American-Statesman, Vice President and General Manager of The Atlanta Journal-Constitution, Executive Vice President of Cox Newspapers and Vice President of Business Development for Cox Enterprises. Mr. Schwartz is currently a member of the board of directors of A.C. Green Youth Foundation, board of trustees of Northwood University, board of advisors of Axios, and board of directors of Checkered Flag Foundation. We believe Mr. Schwartz’s extensive leadership and automotive industry experience qualifies him to serve on our Board of Directors. | |
Class I Directors (terms to expire at the 2025 Annual Meeting)
| | Rivian 2024 Proxy Statement | 5 |
Class II Directors (terms to expire at the 2026 Annual Meeting)
Class II Directors (terms to expire at the 2026 Annual Meeting) The current members of the Board of Directors who are Class II Directors are as follows:
Class II Directors (terms to expire at the 2026 Annual Meeting)
| Name | Age | Served as a Director Since | Position with Rivian | | Karen Boone | 50 | 2020 | Director | | Rose Marcario | 59 | 2021 | Director |
Class II Directors (terms to expire at the 2026 Annual Meeting)
The principal occupations and business experience, for at least the past five years, of each Class II Director are as follows:
Class II Directors (terms to expire at the 2026 Annual Meeting)
| Karen Boone | | | | | Age | Director Since | | | 50 | 2020 | | Director | Ms. Boone has served on our Board of Directors since August 2020. Ms. Boone most recently served as the President, Chief Financial and Administrative Officer of Restoration Hardware, Inc., a home furnishings company, from May 2014 to August 2018 and as Chief Financial Officer from June 2012 to May 2014. Prior to that, from 1996 to 2012, Ms. Boone held various roles at Deloitte & Touche LLP, a public accounting firm, most recently as an Audit Partner. Ms. Boone currently serves on the board of directors of Sonos, Inc., an audio products company, Peloton Interactive, Inc., a connected fitness company, and several private companies. Ms. Boone holds a B.S. in Business Economics from the University of California, Davis. We believe Ms. Boone’s extensive accounting and management experience qualifies her to serve on our Board of Directors. | |
Class II Directors (terms to expire at the 2026 Annual Meeting)
| Rose Marcario | | | | | Age | Director Since | | | 59 | 2021 | | Director | Ms. Marcario has served on our Board of Directors since January 2021. Ms. Marcario most recently served as the President and Chief Executive Officer and as a member of the board of directors of Patagonia, Inc., an outdoor apparel retailer, from May 2013 to June 2020. Prior to that, she served as the Chief Financial Officer and Chief Operating Officer of Patagonia, Inc. from 2008 to 2013. Before joining Patagonia, Ms. Marcario held several executive roles in private equity, technology, and retail industries, including as Chief Financial Officer of General Magic, which was spun-off from Apple Computer, and Vice President of Global Finance and Treasury of International Rectifier, Inc. (acquired by Infineon Technologies Americas Corp.), a semiconductor manufacturer. Ms. Marcario has served on the board of directors of several private companies, including currently serving on the board of directors of Meati, Inc., a plant-based food company. Ms. Marcario holds a BSc. in Business and Finance from the State University of New York at Albany and an M.B.A. from California State University, Dominguez Hills. We believe Ms. Marcario’s extensive management experience in the private equity, technology, and retail industries qualifies her to serve on our Board of Directors. | |
Class II Directors (terms to expire at the 2026 Annual Meeting)
| 6 | Rivian 2024 Proxy Statement | |
Class II Directors (terms to expire at the 2026 Annual Meeting)
Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm Our Audit Committee has appointed KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024. Our Board of Directors has directed that this appointment be submitted to our stockholders for ratification at the Annual Meeting. Although ratification of our appointment of KPMG LLP is not required, we value the opinions of our stockholders and believe that stockholder ratification of our appointment is a good corporate governance practice. KPMG LLP served as our independent registered public accounting firm for the fiscal year ended December 31, 2023 and has served as our independent registered public accounting firm since August 20, 2021. A representative of KPMG LLP is expected to attend the Annual Meeting and to have an opportunity to make a statement and be available to respond to appropriate questions from stockholders. In the event that the appointment of KPMG LLP is not ratified by the stockholders, the Audit Committee will consider this fact when it appoints the independent auditors for the fiscal year ending December 31, 2025. Even if the appointment of KPMG LLP is ratified, the Audit Committee retains the discretion to appoint a different independent auditor at any time if it determines that such a change is in the interest of the Company.
Our Commitment to Best Practices
| What We Do | | What We Don’t Do | | | | Retain 100% independent directors on our Compensation Committee | | No pension plans or supplemental retirement plans | | | The Compensation Committee engages an independent compensation advisor who provides no other services to the Company | | No hedging or pledging of our stock by directors or employees | | | A significant portion of compensation for NEOs is at-risk, and based on either our stock price performance or Company financial and operational goals | | No excise tax gross-ups upon a change in control | | | Annual review of NEO compensation and peer group data | | | | | Double-trigger change in control arrangements | | | | | Regularly assess the risk-reward balance of our compensation programs to mitigate undue risks | | | | | Maintain a policy to claw back any excess compensation paid following a financial restatement | | |
Overview of Factors Considered in Setting Executive Compensation
Overview of Factors Considered in Setting Executive Compensation The Compensation Committee assesses the competitiveness of each element of our executive officers’ total direct compensation against the compensation peer group, as discussed below. In developing this compensation peer group, the Compensation Committee, in collaboration with Semler Brossy, considered a number of factors, including: •Industry: ensuring we identify companies that face similar business and talent challenges (e.g., software, automobile, etc.); •Scale and complexity: ensuring market capitalization and revenue opportunities are comparable; •Business characteristics: ensuring geographic location, growth projections, valuation multiples, etc. are taken into account; and •Talent: ensuring we are competitive with high potential, high performing technology companies with which we routinely compete for talent.
Executive Compensation Peer Group
Executive Compensation Peer Group
Executive Compensation Peer Group
| •CrowdStrike •DocuSign •DoorDash •Lyft •Lucid Group, Inc. •NVIDIA Corporation •Palantir Technologies | •Pinterest •Roku •ServiceNow •Snap •Spotify Technologies •Tesla | •The Trade Desk •Uber Technologies •Workday •Zillow Group •Zoom Video |
Executive Compensation Peer Group
As an additional reference, we also review the pay levels and practices of select traditional automotive companies to ensure we have a full picture of the industry. We do not benchmark pay levels to these companies, but rather use the data as an additional input when making decisions. While we do not establish compensation levels solely based on a review of competitive data, we believe market data is a meaningful input to our compensation policies and practices in order to attract and retain qualified executive officers. When making decisions on total compensation for executive officers, the Compensation Committee also considers a number of other factors, including Company performance, each executive’s impact and criticality to our strategy and mission, relative scope of responsibility and potential, individual performance and demonstrated leadership, and internal pay equity considerations. We intend to review our peer group annually to reflect changes to our size and scale and ensure it continues to be aligned with our business and talent needs.
Key Factors in Determining Executive Compensation
•overall compensation philosophy and alignment with our business strategy; •annual and long-term incentive plans, including the degree to which incentive plans support business strategies and balance risk-taking with potential reward; •peer group pay and performance comparisons; •competitiveness of NEOs’ compensation; •changes to NEOs’ compensation levels; •design of other compensation and benefits programs, including severance and change in control arrangements; and •preparation of public filings related to executive compensation, including CD&A and accompanying tables and footnotes. Semler Brossy does not provide any services to us other than the aforementioned services provided to the Compensation Committee. The Compensation Committee assessed the independence of Semler Brossy and concluded that there are no conflicts of interest regarding the work that Semler Brossy performs for the Compensation Committee. Role of our Stockholders: At our 2023 Annual Meeting of Stockholders, our stockholders voted in a non-binding, advisory vote to approve the compensation of our NEOs. The Compensation Committee reviewed the results of this vote, and, in light of the approval by a substantial majority of our stockholders of the compensation programs described in our 2023 proxy statement (representing approximately 94.3% of the voting power of the shares represented in person or by proxy at the meeting and entitled to vote), did not implement any significant changes to our executive compensation program as a result of the vote. At our 2022 Annual Meeting of Stockholders, our stockholders also voted in a non-binding, advisory vote on the frequency with which we will hold non-binding, advisory votes to approve the compensation of our NEOs and substantially all of the votes cast (99.9%) were in favor of a frequency of every year. Accordingly, we are again holding a non-binding advisory vote to approve the compensation of our NEOs at our 2024 Annual Meeting, and currently intend to hold additional non-binding, advisory votes to approve the compensation of our NEOs annually.
Base Salary
Base Salary We use base salary to provide a fixed amount of compensation for our NEOs in exchange for their services. We generally position base salary for our NEOs at or below market levels, emphasizing instead at-risk equity compensation as the primary vehicle for delivering compensation to our NEOs. The Compensation Committee annually reviews the base salaries of our NEOs and makes adjustments as it deems necessary or appropriate based on the factors described above in “Overview of Factors Considered in Setting Executive Compensation,” including reviewing peer group compensation data for similarly situated executives. For NEOs other than the CEO, the Compensation Committee receives a performance assessment and salary adjustment recommendation from the CEO. In August 2023 the Compensation Committee reviewed the base salaries of our CEO and CFO. After review of peer group data provided by Semler Brossy, and in view of the fact that Dr. Scaringe did not receive a base salary increase in 2021 or 2022, the Compensation Committee determined to increase Dr. Scaringe’s base salary from $650,000 to $1,000,000, effective August 25, 2023. After review of the peer group data and in view of the fact that Ms. McDonough received a raise in 2022, the Compensation Committee determined not to raise Ms. McDonough’s base salary in 2023. Dr. Gruner joined Rivian as its CCO in September of 2023 and his annual base salary was established following arm’s length negotiations. The annual base salaries for our NEOs as of December 31, 2023 are set forth in the table below.
Annual Incentive Bonus
Annual Incentive Bonus Our NEOs are each eligible to receive an annual performance-based cash incentive with a target opportunity expressed as a percentage of annual base salary and payment based on our Compensation Committee’s assessment of corporate performance. For 2023, the target and maximum annual incentive bonus opportunities for our NEOs were as follows:
Annual Incentive Bonus
| Named Executive Officer | 2023 Target Bonus as % of Salary (%) | 2023 Target Bonus ($) | 2023 Maximum Bonus as % of Salary (%)(1) | 2023 Maximum Bonus ($) | | Robert J. Scaringe – Founder and CEO | 50 | 380,288 | 75 | 570,433 | | Claire McDonough – CFO | 50 | 225,000 | 75 | 337,500 | | Kjell Gruner – CCO | 50 | 66,758 | 75 | 328,846 |
Annual Incentive Bonus
(1)Under our Executive Bonus Plan, the maximum amount payable to our NEOs is equal to 150% of the amount of the target bonus. In March 2023, the Compensation Committee, with input from our management team, approved the following Company performance metrics for the annual incentive bonus program: (1) vehicle production volumes, weighted 35%; (2) unit cash cost of goods sold (“Unit Cash COGS”), weighted 30%; (3) cash operating expense (“Cash Opex”), weighted 15%; (4) progress on product development, weighted 20%. In our financial statements, cost of goods sold is reported as “Cost of Revenues” and in our quarterly earnings releases “Cash Opex” is reported as “Adjusted Operating Expenses,” respectively. In February 2024, the Compensation Committee assessed the results of performance against these metrics to determine the annual incentive bonus results. The 2023 performance goals for vehicle production volumes and Cash Opex are set forth below. We are not disclosing the performance goals for the progress on product development because the information constitutes confidential information, the disclosure of which would result in competitive harm. Our Compensation Committee established the progress on product development at levels our Compensation Committee determined would require significant effort to achieve. The primary drivers of the Company’s performance against Unit Cash COGS were higher than forecast unit bill of materials, other materials costs and conversion costs, which were impacted by lower than forecast production and delivery volumes.
Annual Incentive Bonus
| Metric/Goal | Weighting | Performance to Achieve Target | 2023 Performance | 2023 Score | | Production Volumes(1) | 35% | 55,000 | 57,232 | 111% | | Unit Cash COGS(2) | 30% | $111,000 | $120,637 | 0% | | Cash Opex(3) | 15% | $2,700 million | $2,700 million | 100% | | Progress on Product Development | 20% | Not disclosed | Not disclosed | 94% |
Annual Incentive Bonus
(1)The 2023 Score for Production Volumes was calculated based on interpolation for 2023 Performance vs Performance to Achieve Target. (2)Unit Cash COGS is a non-GAAP financial measure and is defined generally as cost of vehicle revenues less depreciation and amortization expense, stock-based compensation expense, and inventory lower of cost or net realizable value write-downs, divided by the total number of units delivered. We measure Unit Cash COGS for the fourth quarter. (3)Cash Opex is a non-GAAP financial measure and is defined generally as total operating expenses less depreciation and amortization expense and stock-based compensation expense. In consideration of both the financial and non-financial performance, the Company’s overall weighted achievement against the performance goals was determined to be approximately 73%. In February 2024, the Compensation Committee certified the achievement of the performance goals at 73% of target for an annual bonus amount of $277,611 for Dr. Scaringe, $164,250 for Ms. McDonough and $48,733 for Dr. Gruner. In lieu of cash payment of these bonus amounts, the Compensation Committee awarded each of our NEOs a number of fully vested restricted stock units determined by dividing the bonus amount earned by $11.32, which was the closing price of our Class A common stock on the day prior to the grant date and rounding up to the nearest whole unit. These fully-vested restricted stock units were granted on March 1, 2024.
Annual Incentive Bonus
| | Rivian 2024 Proxy Statement | 23 |
Sign-On Bonus
Sign-On Bonus In connection with Dr. Gruner’s commencement of employment with us, we paid Dr. Gruner a one-time sign-on bonus of $1.5 million. The size of the sign-on bonus was set following arm’s length negotiations and was intended as a make-whole to compensate Dr. Gruner for the lost bonus, equity compensation, and incentives from his previous employer that he forfeited upon his departure. In the event Dr. Gruner voluntarily resigns for other than good reason or his employment is terminated by us for cause, in each case, prior to the first anniversary of his commencement of employment with us, then he must repay to us a pro-rata portion of the sign-on bonus based on the number of months employed with us.
Long-Term Incentive Compensation
Long-Term Incentive Compensation Our equity award program is the primary vehicle used to differentiate compensation and for offering long-term incentives to our NEOs. We believe that equity awards align the interests of our NEOs with our stockholders, provide our NEOs with incentives linked to long-term performance, and foster an ownership mentality. In addition, the long-term vesting features of our equity awards support our belief in management longevity because they create retentive hold. The table below outlines the equity awards granted to our NEOs in 2023:
Long-Term Incentive Compensation
| | # of Shares Granted | | | Executive | Stock Options | Restricted Stock Units | | Robert J. Scaringe – CEO | 604,352 | 302,176 | | Claire McDonough – CFO | 201,452 | 100,726 | | Kjell Gruner – CCO | 260,984 | 434,972 |
Long-Term Incentive Compensation
In August 2023, the Compensation Committee granted our CEO 302,176 restricted stock units and an option to purchase 604,352 shares of our Class A common stock. The option has an exercise price per share of $20.07, the closing price of our Class A common stock on the grant date. After much consideration and discussion with Semler Brossy, the Compensation Committee determined to award restricted stock units and an option to our CEO in 2023 in recognition of his continued leadership and criticality to our future success. The size was calibrated based on competitive grant values for chief executive officers of our peer group companies. In August 2023, the Compensation Committee granted our CFO 100,726 restricted stock units and an option to purchase 201,452 shares of our Class A common stock. The option has an exercise price per share of $20.07, the closing price of our Class A common stock on the grant date. In October 2023, as part of his hiring package, the Compensation Committee granted our CCO 434,972 restricted stock units and an option to purchase 260,984 shares of our Class A common stock. The option has an exercise price of $16.72, the closing price of our Class A common stock on the grant date. The size of the restricted stock unit and option grants to our CFO and CCO were determined by the Compensation Committee after its review of the aggregate vested and unvested holdings of our NEOs in comparison with other senior leaders and competitive grant values for similarly situated executives at our peer group companies. The restricted stock units and options granted to our NEOs vest over four years subject to our NEO’s continued service to us.
2021 CEO Performance Award
2021 CEO Performance Award In January 2021, our Board of Directors and stockholders approved an equity award to our CEO consisting of a time-based option to purchase 6,785,315 shares of our common stock and a performance-based option to purchase up to 20,355,946 shares of our common stock (the “2021 CEO Equity Award”). Our Board of Directors, in consultation with Compensia, an independent compensation consultant, considered a number of factors in determining whether to grant the 2021 CEO Equity Award as well as the equity award’s terms and conditions. Such factors included our CEO’s then-current ownership interest in the Company, the proportion of such ownership interest that was fully vested, external market data for similarly situated executives among comparable companies, and the Company’s interest in incentivizing our CEO to deliver on the Company’s strategy and align his long-term interests with those of our stockholders. The time-based option vests in six equal installments on each of the first through sixth anniversaries of our initial public offering, which occured in November 2021 (“ IPO”), subject to continued service to us. The performance-based option vests in twelve installments contingent on the achievement of four stock price goals over a performance period that commences in January 2027 and ends in January 2031 as set forth in the table below. The four stock price goals are, on a price-per share basis (calculated based on an average over an applicable 90 consecutive trading-day period), $110, $150, $220, and $295, in each case as adjusted to reflect the impact of any stock dividends, stock splits, recapitalization or other changes in the corporate structure of the Company. Such stock prices reflect performance-based goals of approximately 5x to 13x increases in our stock price based on the fair market value of a share of our Class A common stock on the date of grant, which was $21.72.
2021 CEO Performance Award
In an effort to reward sustained performance over time, achievement of the stock price goals will be assessed on each of three assessment dates: the sixth, eighth, and nine-year and sixth month anniversaries of the grant date, with up to 1/3 of the applicable performance-based portion of the award being eligible to vest on each assessment date, or subsequent to each such assessment date if the relevant stock price goal is achieved following such assessment date and during the performance period. For the purposes of clarity, the first assessment date of the performance-based portion of the award has not yet occurred and, as such, no options underlying such portion of the award have vested, and will not begin vesting until January 19, 2027 at the earliest, which is the first potential vesting date.
Taxation of Parachute Payments and Deferred Compensation
Taxation of Parachute Payments and Deferred Compensation We do not provide, and have no obligation to provide, any executive officer, including any NEO, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Section 280G, 4999, or 409A of the IRS Code. If any of the payments or benefits provided for under the employment agreements or otherwise payable to an NEO would constitute “parachute payments” within the meaning of Section 280G of the IRS Code and could be subject to the related excise tax, the NEO would be entitled to receive either full payment of such payments and benefits or such lesser amount that would result in no portion of the payments and benefits being subject to the excise tax, whichever results in the greater amount of after-tax benefits to the NEO.
2023 Summary Compensation Table
2023 Summary Compensation Table The following table contains information about the compensation earned by each of our NEOs during our most recently completed fiscal year ended December 31, 2023.
2023 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Robert J. Scaringe Chief Executive Officer | 2023 | 759,038 | — | 6,065,409 | 7,173,658 | 277,611 | 78,364 | 14,354,080 | | | 2022 | 650,000 | — | 2,267 | — | 182,000 | 180,518 | 1,014,785 | | | 2021 | 650,000 | — | — | 421,364,482 | — | 126,197 | 422,140,679 | | Claire McDonough Chief Financial Officer | 2023 | 450,000 | — | 2,022,009 | 2,391,235 | 164,250 | 19,083 | 5,046,577 | | | 2022 | 438,462 | — | 3,055,071 | 3,373,836 | 122,769 | 19,400 | 7,009,538 | | | 2021 | 367,692 | — | — | 31,170,000 | — | 96,322 | 31,634,014 | | Kjell Gruner Chief Commercial Officer(5) | 2023 | 131,539 | 1,500,000 | 7,272,871 | 2,682,916 | 48,733 | 92,753 | 11,728,812 |
2023 Summary Compensation Table
(1)For 2023, the annual incentive bonus was paid in the form of fully vested restricted stock units and the amounts represent the amount that the aggregate grant date fair value of the restricted stock units, computed in accordance with ASC Topic 718, exceeds the amount of the annual incentive bonus award. With respect to our CEO and CFO, the amount reported also includes the grant date fair value of 302,176 restricted stock units and 100,726 restricted stock units, respectively, that were granted in August 2023, and with respect to our CCO, the amount reported also includes the grant date fair value of 434,972 restricted stock units, that were granted in October 2023, in each case, computed in accordance with ASC Topic 718. The grant date fair value of the restricted stock units is based on the closing price of our Class A common stock on the grant date, as further described in Note 11 to the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. (2)The amount reported represents the aggregate grant date fair value of stock options granted to our CEO and CFO in August 2023 and to our CCO in October 2023, in each case, computed in accordance with ASC Topic 718. The assumptions used in calculating the fair value of the stock options are set forth in Note 11 to the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. (3)The amounts represent the annual incentive bonuses earned by the NEOs for 2023. These bonuses were paid to the NEOs in the first quarter of 2024 in the form of fully vested restricted stock units. The amount by which the grant date fair value of the fully vested restricted stock units exceeded the cash amount that would have been paid is reported in the Stock Awards column. (4)The following table provides the amounts of other compensation paid to, or on behalf of, NEOs during 2023 included in the “All Other Compensation” column:
2023 Summary Compensation Table
| Name | 401(k) Matching Contributions ($) | Cell Phone Allowances ($) | Internet Allowances ($) | Gifts ($) | R1T Early Employee Adopter Program Payments ($) | Security Services ($) | Private Aircraft Travel ($) | Relocation Allowance ($) | Total ($) | | Robert J. Scaringe | — | — | — | — | 20,000 | 24,338 | 34,026 | — | 78,364 | | Claire McDonough | 6,600 | 650 | 650 | 183 | 11,000 | — | — | — | 19,083 | | Kjell Gruner | 1,385 | 200 | 200 | — | — | — | — | 90,968 | 92,753 |
2023 Summary Compensation Table
(5)Dr. Gruner was appointed as our CCO on September 1, 2023. The amount reported in the Bonus column for Dr. Gruner represents his sign-on bonus as discussed above.
2023 Summary Compensation Table
| 30 | Rivian 2024 Proxy Statement | |
Grants of Plan-Based Awards in Fiscal 2023
Grants of Plan-Based Awards in Fiscal 2023 The following table provides supplemental information relating to grants of plan-based awards made during the fiscal year ended December 31, 2023, to help explain information provided above in our 2023 Summary Compensation Table. This table presents information regarding all grants of plan-based awards occurring during the fiscal year ended December 31, 2023.
Grants of Plan-Based Awards in Fiscal 2023
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | All Other Option Awards: Number of Securities Underlying Options (#)(3) | Exercise or Base Price of Options Awards ($/Sh) | Grant Date Fair Value of Stock and Options Awards ($)(4) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | | | | | | Robert J. Scaringe | | 223,610 | 380,288 | 570,433 | | | | | | | 8/25/2023 | | | | 302,176 | | | 6,064,672 | | | 8/25/2023 | | | | | 604,352 | 20.07 | 7,173,658 | | Claire McDonough | | 132,300 | 225,000 | 337,500 | | | | | | | 8/25/2023 | | | | | 201,452 | 20.07 | 2,391,235 | | | 8/25/2023 | | | | 100,726 | | | 2,021,571 | | Kjell Gruner | | 39,254 | 66,758 | 100,137 | | | | | | | 10/20/2023 | | | | 434,972 | | | 7,272,732 | | | 10/20/2023 | | | | | 260,984 | 16.72 | 2,682,916 |
Grants of Plan-Based Awards in Fiscal 2023
(1)Represents the potential payments under our performance-based annual incentive program for fiscal year 2023. The threshold, target and maximum amounts are based on a percentage of the NEO’s fiscal year 2023 base salary. The threshold amount represents the amount payable upon achievement of a single performance target at the minimum level, and the maximum amount represents the amount payable upon achievement of each performance target at the maximum level. As described in Executive Compensation—Elements of Executive Pay and 2023 Compensation under the heading “Annual Incentive Bonus,” the Compensation Committee determined to pay annual incentive bonuses for our NEOs for fiscal year 2023 at 73% of the target bonus amount in the form of fully vested restricted stock units. (2)Subject to continued service to us, restricted stock units vest in 16 equal quarterly installments commencing on November 15, 2023. (3)Subject to continued service to us, options vest and become exercisable as to 25% of the underlying shares of Class A common stock subject to the option on each of the first four anniversaries of the grant date of the stock option. (4)The amounts represent the aggregate grant date fair value of restricted stock units and stock options granted during 2023. The assumptions used in calculating the fair value of the restricted stock units and stock options are set forth in Note 11 to the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Grants of Plan-Based Awards in Fiscal 2023
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Outstanding Equity Awards at Fiscal Year-End 2023
Outstanding Equity Awards at Fiscal Year-End 2023 The following table lists all outstanding equity awards, including unexercised options, stock that has not vested, and equity plan incentive awards held by our NEOs as of December 31, 2023.
Outstanding Equity Awards at Fiscal Year-End 2023
| | | Option Awards | | | | | Stock Awards | | | Name | Vesting Commence-ment Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | Robert J. Scaringe | (2) | 8,699,550 | — | | 2.63 | 3/15/2029 | | | | | (2) | 1,000,000 | — | | 3.36 | 7/8/2029 | | | | | 1/19/2021(3) | | | 20,355,946 | 21.72 | 1/19/2031 | | | | | 11/10/2021(4) | 2,261,771 | 4,523,544 | | 21.72 | 1/19/2031 | | | | | 11/15/2023(7) | | | | | | 302,176 | 7,089,049 | | | 8/25/2023(6) | — | 604,352 | | 20.07 | 8/25/2033 | | | | Claire McDonough | 2/1/2021(5) | 287,500 | 450,000 | | 21.72 | 1/26/2028 | | | | | 8/8/2022(6) | 39,936 | 119,810 | | 38.23 | 8/16/2032 | | | | | 8/15/2022(7) | | | | | | 54,913 | 1,288,259 | | | 11/15/2023(7) | | | | | | 100,726 | 2,363,032 | | | 8/25/2023(6) | — | 201,452 | | 20.07 | 8/25/2033 | | | | Kjell Gruner | 11/15/2023(7) | | | | | | 434,972 | 10,204,443 | | | 10/20/2023(6) | — | 260,984 | | 16.72 | 10/20/2033 | | |
Outstanding Equity Awards at Fiscal Year-End 2023
(1)Value of restricted stock units calculated by multiplying $23.46, the closing price of our Class A common stock on December 29, 2023, the last trading day in 2023, by the number of restricted stock units outstanding. (2)Fully vested. (3)Option that vests based on the achievement of stock price hurdles, as described in Executive Compensation—Elements of Executive Pay and 2023 Compensation under the heading “2021 CEO Performance Award.” (4)The option vests in six equal installments on each anniversary of the vesting commencement date, which was the date of our IPO, subject to continued service to us. (5)Option vests as to 20% of the underlying shares of Class A common stock subject to the option on each of the first five anniversaries of the vesting commencement date, subject to continued service to us. (6)Option vests as to 25% of the underlying shares of Class A common stock subject to the option on each of the first four anniversaries of the date of grant, subject to continued service to us. (7)Restricted stock units vest in 16 substantially equal quarterly installments commencing on the vesting commencement date, subject to continued service to us.
Outstanding Equity Awards at Fiscal Year-End 2023
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Option Exercises and Stock Vested in Fiscal 2023
Option Exercises and Stock Vested in Fiscal 2023 The following table provides information regarding stock awards that vested during 2023. None of our NEOs exercised stock options during 2023.
Option Exercises and Stock Vested in Fiscal 2023
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Robert J. Scaringe | 10,757 | 184,267 | | Claire McDonough | 27,224 | 486,764 | | Kjell Gruner | — | — |
Option Exercises and Stock Vested in Fiscal 2023
(1)Reflects the product of the number of shares of common stock vested multiplied by the closing price of our Class A common stock on the vesting date.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control As described above, we have entered into employment agreements with each of our NEOs. The following table quantifies the benefits payable to our NEOs upon certain terminations of employment using the assumptions set forth below.
Potential Payments Upon Termination or Change in Control
| Name | Cash Severance ($) | COBRA Premiums ($) | Equity Acceleration ($)(1) | Total Potential Payment ($)(2) | | Robert J. Scaringe | | | | | | Qualifying Termination | 1,380,288 | 17,995 | 0 | 1,398,283 | | Qualifying Termination in Connection with a CIC | 1,380,288 | 17,995 | 9,137,802 | 10,536,085 | | Claire McDonough | | | | | | Qualifying Termination | 614,250 | 20,002 | 0 | 634,252 | | Qualifying Termination in Connection with a CIC | 614,250 | 20,002 | 5,117,213 | 5,751,465 | | Kjell Gruner | | | | | | Qualifying Termination | 498,733 | 0 | 0 | 498,733 | | Qualifying Termination in Connection with a CIC | 798,733 | 0 | 11,963,475 | 12,762,208 |
Potential Payments Upon Termination or Change in Control
(1)Represents the difference between $23.46, the closing price of our Class A common stock on December 29, 2023, less any exercise price multiplied times the number of shares underlying the equity award for which vesting would be accelerated. (2)Amounts shown constitute the maximum potential payment the NEO would have received as of December 31, 2023. Amounts of the reduction pursuant to the parachute payment best pay provision, if any, would be calculated upon actual termination of employment in connection with a change in control.
Potential Payments Upon Termination or Change in Control
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Potential Payments Upon Termination or Change in Control
CEO Pay Ratio In accordance with Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of our CEO. •The median of the annual total compensation of our employees (other than our CEO) was $167,572 in 2023. •The total annual compensation of our CEO, as reported in the Summary Compensation Table, was $14,354,080 in 2023. •Based on the foregoing, the ratio of the annual total compensation of our CEO and the median of the annual total compensation of our employees was 85.7 to 1. We believe this pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. The SEC rules for identifying the median compensated employee and calculating the pay ratio allows companies to apply various methodologies and apply various assumptions and, as a result, the pay ratio we report may not be comparable to the pay ratio reported by other companies.
Determining Annual Total Compensation
| Year | Summary compensation table total for PEO(1) ($) | Compensation actually paid to PEO (1)(2) ($) | Average summary compensation table total for non-PEO named executive officers(1) ($) | Average compensation actually paid to non-PEO named executive officers (1)(3) ($) | Value of initial fixed $100 investment based on: | | Net loss ($) | Unit Cash COGS(5) ($) | | | | | | | Total shareholder return (4) ($) | Peer group total shareholder return (4) ($) | | | | 2023 | 14,354,080 | 36,328,396 | 8,387,695 | 11,530,019 | 23.29 | 83.00 | (5,432,000,000) | 120,637 | | 2022 | 1,014,785 | (1,991,817,641) | 3,796,416 | (51,055,180) | 18.30 | 65.34 | (6,752,000,000) | 166,543 | | 2021 | 422,140,679 | 2,339,784,810 | 18,107,278 | 44,605,170 | 102.94 | 94.48 | (4,688,000,000) | 296,077 |
Relationship between Compensation Actually Paid and Financial Performance Measures
Relationship between Compensation Actually Paid and Financial Performance Measures In accordance with Item 402(v) of Regulation S-K, we are providing the following charts to show the relationships between information presented in the Pay Versus Performance table above. A significant portion of our executive compensation program is comprised of equity awards, and Compensation Actually Paid was most strongly affected by our stock price performance, as reflected in the equity award valuations required by SEC rules. As illustrated in the charts below and consistent with our compensation philosophy that focuses on equity compensation to align the interests of our NEOs with the interests of our stockholders, the Compensation Actually Paid our NEOs, including our PEO, closely correlates with the value of our Class A common stock.
Relationship between Compensation Actually Paid and Financial Performance Measures
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Compensation Actually Paid Versus Company and Peer Group Total Shareholder Return
Compensation Actually Paid Versus Company and Peer Group Total Shareholder Return
Compensation Actually Paid Versus Net Loss
Compensation Actually Paid Versus Net Loss
Compensation Actually Paid Versus Net Loss
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Compensation Actually Paid Versus Unit Cash COGS
Compensation Actually Paid Versus Unit Cash COGS
Compensation Actually Paid Versus Unit Cash COGS
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Compensation Actually Paid Versus Unit Cash COGS
Equity Compensation Plan Information We currently maintain three equity compensation plans: the 2015 Long-Term Incentive Plan (the “2015 Plan,”), the 2021 Incentive Award Plan (the “2021 Plan”) and the 2021 Employee Stock Purchase Plan (the “2021 ESPP”). The following table provides information on the number of shares of our Class A common stock to be issued upon payout of outstanding awards and the number of shares remaining available for future award grants under these equity compensation plans as of December 31, 2023.
Compensation Actually Paid Versus Unit Cash COGS
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities in first column)(2) | | Equity compensation plans approved by security holders | 118,236,889 | $13.49(1) | 145,261,492 | | Equity compensation plans not approved by security holders | — | — | — | | Total | 118,236,889 | $13.49 | 145,261,492 |
Compensation Actually Paid Versus Unit Cash COGS
(1)As of December 31, 2023, the weighted average exercise price of outstanding options under the 2015 Plan and the 2021 Plan was $13.49. (2)Includes 112,767,246 shares available for future issuance under the 2021 Plan and 32,494,246 shares available for issuance under the 2021 ESPP. As of November 8, 2021, in connection with our IPO, no further grants are made under the 2015 Plan. The 2021 Plan provides for an annual increase to the number of shares available for issuance thereunder on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, by an amount equal to the lesser of (i) 5% of the aggregate number of shares of all classes of the Company’s common stock outstanding on the last day of the immediately preceding calendar year and (ii) such smaller number of shares of Class A common stock as is determined by the our Board of Directors (but no more than 730,000,000 shares may be issued upon the exercise of incentive stock options). The 2021 ESPP provides for an annual increase to the number of shares available for issuance thereunder on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, by an amount equal to the lesser of (i) 1% of the aggregate number of shares of all classes of the Company’s common stock outstanding on the last day of the immediately preceding calendar year and (ii) such smaller number of shares of Class A common stock as is determined by our Board of Directors, provided that no more than 185,000,000 shares may be issued under the 2021 ESPP. Up to a maximum of 18,335,073 shares may be purchased in the current offering period which runs through May 20, 2024 under the 2021 ESPP, based on enrollment as of December 31, 2023, which are not captured in the Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights column.
Compensation Actually Paid Versus Unit Cash COGS
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Compensation Actually Paid Versus Unit Cash COGS
Director Compensation The following table sets forth information concerning the compensation earned or paid to our non-employee directors during the fiscal year ended December 31, 2023. Dr. Scaringe is compensated as an employee for service as our Chief Executive Officer and does not receive additional compensation for his service as a member of our Board of Directors. See “Compensation of our Named Executive Officers—2023 Summary Compensation Table” for information regarding his compensation as our employee.
Compensation Actually Paid Versus Unit Cash COGS
| Name | Fees Earned or Paid in Cash ($)(1)(2) | Stock Awards ($)(2) | Total ($) | | Karen Boone | 110,000 | 287,327 | 397,327 | | Sanford Schwartz | 77,500 | 281,076 | 358,576 | | Pamela Thomas-Graham | 75,408 | 281,076 | 356,484 | | Rose Marcario | 72,500 | 280,617 | 353,117 | | Jay Flatley | 70,000 | 266,201 | 336,201 | | Peter Krawiec | 50,000 | 275,794 | 325,794 | | John Krafcik(3) | 26,155 | 391,089 | 417,244 |
Compensation Actually Paid Versus Unit Cash COGS
(1)Amounts reported for Ms. Boone, Mr. Schwartz, Ms. Thomas-Graham, Ms. Marcario, and Mr. Krawiec include the value of restricted stock units granted in lieu of cash fees at the election of each director. (2)Amounts reported represent (i) an annual award of 18,208 restricted stock units with an aggregate grant date fair value of $266,201 awarded to each of our non-employee directors (other than Mr. Krafcik) in June 2023, which restricted stock units will vest on the one-year anniversary of the grant date, subject to the director’s continued service to us, (ii) for Mr. Krafcik, an initial award in August 2023 of 10,072 restricted stock units (the “Initial Long-Term Award”) with an aggregate grant date fair value of $213,325, which were scheduled to vest in equal annual installments on the next three anniversaries of August 15, 2023 and of 8,393 restricted stock units (the “Initial Short-Term Award”) with an aggregate grant date fair value of $177,764, which were scheduled to vest on the date of the Annual Meeting, in each case, subject to his continued service to us, and (iii) the amount that the aggregate grant date fair value of the restricted stock units granted, computed in accordance with ASC Topic 718, exceeds the amount of cash fees the director otherwise would have received on July 20, 2023, which excess amount is $21,126 for Ms. Boone, $14,875 for Mr. Schwartz, $14,875 for Ms. Thomas-Graham, $14,416 for Ms. Marcario and $9,593 for Mr. Krawiec. The grant date fair value is based on the closing price of our Class A common stock on the grant date, as further described in Note 11 to the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The table below shows the aggregate number of outstanding unvested stock awards and shares subject to unexercised options held as of December 31, 2023 by each non-employee director.
Compensation Actually Paid Versus Unit Cash COGS
| Name | Number of Stock Awards Outstanding (#) | Number of Option Awards Outstanding (#) | | Karen Boone | 18,208 | 60,000 | | Sanford Schwartz | 18,208 | 60,000 | | Pamela Thomas-Graham | 18,208 | 60,000 | | Rose Marcario | 18,208 | 60,000 | | Jay Flatley | 18,208 | 60,000 | | Peter Krawiec | 18,208 | 60,000 | | John Krafcik(3) | 18,465 | — |
Compensation Actually Paid Versus Unit Cash COGS
As of December 31, 2023, our non-employee directors held the following vested but deferred restricted stock units: 17,601 for Ms. Boone; 15,046 for Mr. Schwartz; and 14,345 for Mr. Marcario. (3)Mr. Krafcik was appointed to our Board of Directors in July 2023.
Compensation Actually Paid Versus Unit Cash COGS
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Non-Employee Director Compensation Program
Non-Employee Director Compensation Program Under our non-employee director compensation program (the “Director Compensation Program”) our non-employee directors are eligible to receive cash compensation and equity awards for service on our Board of Directors and committees of our Board of Directors. Under the Director Compensation Program, our non-employee directors are eligible to receive cash compensation as follows:
Non-Employee Director Compensation Program
| Compensation Element | Per Year | | Annual Cash Retainer | •$50,000 | | Lead Independent Director Retainer | •$75,000 | | Audit Committee Retainer | •$25,000 — Chair •$12,500 — Non-Chair Member | | Compensation Committee Retainer | •$20,000 — Chair •$10,000 — Non-Chair Member | | Nominating and Governance Committee Retainer | •$15,000 — Chair •$7,500 — Non-Chair Member | | Planet and Policy Committee Retainer | •$25,000 — Chair •$7,500 — Non-Chair Member |
Non-Employee Director Compensation Program
Each non-employee director may elect to receive all of his or her annual cash retainers in the form of restricted stock units under our 2021 Plan. Elections to convert all of the annual cash retainers into restricted stock units must generally be made on or prior to December 31 of the year prior to the year in which the annual cash retainers are scheduled to be paid, or such earlier deadline as established by the Board of Directors or Compensation Committee. Each individual who first becomes a non-employee director is permitted to elect to convert the annual cash retainer payments scheduled to be paid in the same calendar year into restricted stock units, provided that the election is made prior to the date the individual becomes a non-employee director. Restricted stock units granted in lieu of the annual cash retainers are fully vested on the grant date which corresponds to the date the cash retainers would otherwise be paid, and cover a number of shares of Class A common stock calculated by dividing the amount of the cash retainers that would otherwise be paid by the average closing price of a share of Class A common stock over the calendar month preceding the grant date (which shares are delivered on the grant date unless otherwise deferred as described in the following sentence). In addition, the Director Compensation Program provides that non-employee directors may elect to defer the settlement of restricted stock units granted to them. Deferred restricted stock units will generally be settled upon the earliest of a Change in Control (as defined in the 2021 Plan), the directors separation from service with us, or the director’s death. Under the Director Compensation Program, in connection with the initial appointment or election of a non-employee director, each director is automatically granted (a) an award of restricted stock units covering a number of shares of Class A common stock calculated by dividing (i) $250,000 by (ii) the average closing price of a share of Class A common stock over the calendar month preceding the grant date which will vest in equal annual installments over three years and (b) an award of restricted stock units covering a number of shares of Class A common stock calculated by dividing (i) the product of $250,000 multiplied by a fraction, the numerator of which is the number of full months between the date the director commences service on our Board of Directors and the scheduled date of our next annual stockholder meeting, and the denominator of which is 12, by (ii) the average closing price of a share of Class A common stock over the calendar month preceding the grant date which will vest in full on the date of the next annual stockholders meeting. Additionally, on the date of each annual stockholders meeting, each non-employee director is automatically granted an award of restricted stock units covering a number of shares of Class A common stock calculated by dividing (a) $250,000 by (b) the average closing price of a share of Class A common stock over the calendar month preceding the grant date which will vest in full on the one-year anniversary of the grant date. Each initial award and annual award of restricted stock units, along with any other equity-based awards held by any non-employee director, will vest upon a Change in Control (as defined in the 2021 Plan). We also reimburse our directors for reasonable out-of-pocket expenses in connection with the performance of his or her duties as a director.
Non-Employee Director Compensation Program
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Non-Employee Director Compensation Program
Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information with respect to holdings of our Class A common stock and Class B common stock by (i) stockholders who beneficially owned more than 5% of the outstanding shares of our Class A common stock or our Class B common stock, and (ii) each of our directors (which includes all nominees), each of our named executive officers and all directors and executive officers as a group as of April 24, 2024, unless otherwise indicated. The number of shares beneficially owned by each stockholder is determined under rules issued by the SEC. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power. Applicable percentage ownership is based on 987,495,346 shares of Class A common stock and 7,825,000 shares of Class B common stock outstanding as of April 24, 2024. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of Common Stock subject to options, or other rights held by such person that are currently exercisable or will become exercisable within 60 days of April 24, 2024 are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person. Each outstanding share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain permitted transfers described in our Amended and Restated Certificate of Incorporation, including estate planning or charitable transfers where exclusive voting control with respect to the shares of Class B common stock is retained by Robert J. Scaringe, our Chief Executive Officer, and transfers to affiliates or certain other related entities of Dr. Scaringe. Once converted or transferred and converted into Class A common stock, the Class B common stock may not be reissued. All the outstanding shares of our Class B common stock will convert automatically into shares of our Class A common stock upon the date that is the earlier of (i) a date fixed by our Board of Directors that is not less than 60 days nor more than 180 days following the death or disability of our Chief Executive Officer, (ii) the five-year anniversary of the date of the closing of our IPO and (iii) the date fixed by our Board of Directors that is no less than 61 days and no more than 180 days following the date that the number of outstanding shares of Class B common stock held by our Chief Executive Officer and certain permitted transferees represents less than 30% of the shares of Class B common stock held by an affiliate of our Chief Executive Officer immediately following our IPO. Unless otherwise indicated, the address of each beneficial owner listed below is 14600 Myford Road, Irvine, California 92606. We believe, based on information provided to us, that each of the stockholders listed below has sole voting and investment power with respect to the shares beneficially owned by the stockholder unless noted otherwise, subject to community property laws where applicable.
Non-Employee Director Compensation Program
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Non-Employee Director Compensation Program
| | Shares of Class A Common Stock | | Shares of Class B Common Stock | | Common Stock Beneficially Owned(3) | Combined Voting Power(4) | | Name of Beneficial Owner | Number | Percentage(1) | Number | Percentage(2) | Percentage | Percentage | | 5% Stockholders (excluding Named Executive Officers and Directors) | | | | | | | | Amazon.com NV Investment Holdings LLC(5) | 162,086,884 | 16.4% | — | —% | 16.4% | 15.2% | | Global Oryx Company Limited(6) | 113,934,082 | 11.5% | — | —% | 11.5% | 10.6% | | Certain funds and accounts advised by T. Rowe Price Associates, Inc.(7) | 98,252,862 | 9.9% | — | —% | 9.9% | 9.2% | | The Vanguard Group(8) | 68,313,205 | 6.9% | — | —% | 6.9% | 6.4% | | BlackRock, Inc.(9) | 49,138,804 | 5.0% | — | —% | 5.0% | 4.6% | | Named Executive Officers and Directors | | | | | | | | Robert J. Scaringe(10) | 15,085,974 | 1.5% | 7,825,000 | 100% | 2.3% | 8.7% | | Claire McDonough(11) | 689,961 | * | — | —% | * | * | | Kjell Gruner(12) | 27,186 | * | — | —% | * | * | | Karen Boone(13) | 247,313 | * | — | —% | * | * | | Sanford Schwartz(14) | 202,029 | * | — | —% | * | * | | Rose Marcario(15) | 139,702 | * | — | —% | * | * | | Peter Krawiec(16) | 110,902 | * | — | —% | * | * | | Jay Flatley(17) | 179,784 | * | — | —% | * | * | | Pamela Thomas-Graham(18) | 96,279 | * | — | —% | * | * | | John Krafcik(19) | 8,393 | * | — | —% | * | * | | All current executive officers and directors as a group (10 individuals)(20) | 17,168,124 | 1.7% | 7,825,000 | 100% | 2.3% | 8.8% |
Non-Employee Director Compensation Program
* Less than one percent. (1)The number and percentage of Class A shares beneficially owned by an individual or entity includes shares of Class A common stock subject to restricted stock units, options or other rights held by such person that are currently exercisable or will become exercisable within 60 days of April 24, 2024, which are considered outstanding Class A common stock, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person. (2)The number and percentage of Class B shares beneficially owned by an individual or entity includes shares of Class B common stock subject to restricted stock units, options or other rights held by such person that are currently exercisable or will become exercisable within 60 days of April 24, 2024, which are considered outstanding Class B common stock, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person. (3)The percentage of common stock beneficially owned by an individual or entity includes shares of Class A common stock and Class B common stock subject to restricted stock units, options or other rights held by such person that are currently exercisable or will become exercisable within 60 days of April 24, 2024, which are considered outstanding common stock, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person. (4)Percentage of “Combined Voting Power” represents voting power with respect to all outstanding shares of our Class A common stock and Class B common stock, as a single class, as of April 24, 2024. The holders of our Class B common stock are entitled to 10 votes per share, and holders of our Class A common stock are entitled to one vote per share. (5)Based on a Schedule 13G filed with the SEC on February 2, 2022 and other information known to the Company. Consists of (i) 158,363,834 shares of Class A common stock and (ii) 3,723,050 shares of Class A common stock issuable upon the exercise of a warrant issued to Amazon.com NV Investment Holdings LLC (“NV Holdings”). NV Holdings is a wholly-owned subsidiary of Amazon.com, Inc., whose address is 410 Terry Avenue North, Seattle, WA 98109. Amazon reports sole voting and dispositive power over all shares beneficially owned by NV Holdings. Peter Krawiec, a member of our Board of Directors, is Senior Vice President of Worldwide Corporate and Business Development at Amazon.com, Inc. and as such could be deemed to share voting control and investment power over shares that may be deemed to be beneficially owned by the entities affiliated with NV Holdings, but disclaims beneficial ownership of such shares.
Non-Employee Director Compensation Program
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Non-Employee Director Compensation Program
(6)Based solely on a Schedule 13G filed with the SEC on November 24, 2021. Consists of (i) 106,414,600 shares of Class A common stock and (ii) 7,519,482 shares of Class A common stock underlying warrants that are exercisable at an exercise price of $5.72 per share. Global Oryx Company Limited is a subsidiary of Global Oryx Group Holding Company Limited, whose registered address is 15, Esplanade, St. Helier, JE1 1RB, Jersey. Global Oryx Group Holding Company Limited is controlled by its board of directors, which holds ultimate voting and investment power over the shares held by Global Oryx Company Limited. (7)Based solely on a Schedule 13G/A filed with the SEC on January 10, 2024. Consists of shares of Class A common stock held by funds and accounts for which T. Rowe Price Associates, Inc. (“TRPA”) serves as investment adviser or subadviser, as applicable, with power to direct investments and/or sole power to vote the securities owned by such funds and accounts (with the exception of one advisory fund that retains its own voting authority). TRPA may be deemed to be the beneficial owner of the shares held by such funds and accounts; however, TRPA expressly disclaims that it is, in fact, the beneficial owner of such securities. TRPA reports sole voting power over 45,398,371 shares of Class A common stock and sole dispositive power over 97,061,971 shares of Class A common stock. The address for TRPA is 100 East Pratt Street, Baltimore, MD 21202. (8)Based solely on a Schedule13G filed with the SEC on February 13, 2024. Consists of 68,313,205 shares of Class A common stock. The Vanguard Group lists its address as 100 Vanguard Blvd., Malvern, PA 19355, and indicates that it has shared voting power with respect to 426,300 shares of Class A common stock, sole dispositive power with respect to 66,860,327 shares of Class A common stock, and shared dispositive power with respect to 1,452,968 shares of Class A Common stock. (9)Based solely on a Schedule 13G filed with the SEC on January 31, 2024. Consists of 49,138,804 shares of Class A common stock. BlackRock, Inc. lists its address as 50 Hudson Yards, New York, NY 10001, and indicates that it has sole voting power with respect to 45,323,165 shares of Class A common stock and sole dispositive power with respect to all shares beneficially owned. (10)Consists of (i) 11,961,321 shares of Class A common stock subject to options that are exercisable within 60 days of April 24, 2024, (ii) 2,632,766 shares of Class A common stock held in a family trust, (iii) 4,595 shares of Class A common stock held by a limited liability holding company, (iv) 414,239 shares of Class A common stock held directly, (v) 73,053 restricted stock units which will vest within 60 days of April 24, 2024 and (vi) 7,825,000 shares of Class B common stock held by a limited liability holding company. Dr. Scaringe exercises sole voting and dispositive authority over all shares held by such limited liability company. Does not include (i) an additional 25,483,842 shares of Class A common stock underlying options to purchase Class A common stock not otherwise exercisable within 60 days of April 24, 2024 and (ii) an additional 264,404 restricted stock units which will not vest within 60 days of April 24, 2024. (11)Consists of (i) 95,781 shares of Class A common stock, (ii) 524,880 shares of Class A Common Stock subject to options that are exercisable within 60 days of April 24, 2024 and (iii) 69,300 restricted stock units which will vest within 60 days of April 24, 2024 held by Ms. McDonough. (12)Consists of (i) 27,186 restricted stock units which will vest within 60 days of April 24, 2024 held by Dr. Gruner. (13)Consists of (i) 57,313 shares of Class A common stock held by Ms. Boone, (ii) 130,000 shares of Class A common stock held by The Boone Family Trust dated August 6, 2015, and (iii) 60,000 shares of Class A common stock subject to options that are presently exercisable held by Ms. Boone. (14)Consists of (i) 142,029 shares of Class A common stock and (ii) 60,000 shares of Class A common stock subject to options that are exercisable within 60 days of April 24, 2024 held by Mr. Schwartz. (15)Consists of (i) 79,702 shares of Class A common stock and (ii) 60,000 shares of Class A common stock subject to options that are exercisable within 60 days of April 24, 2024 held by Ms. Marcario. (16)Consists of (i) 36,371 shares of Class A common stock held by Mr. Krawiec, (ii) 34,531 shares of Class A common stock held by Erin G. Krawiec 2019 Trust, and (iii) 40,000 shares of Class A common stock subject to options that are exercisable within 60 days of April 24, 2024 held by Mr. Krawiec. Mr. Krawiec is Senior Vice President of Worldwide Corporate and Business Development at Amazon.com, Inc. and as such could be deemed to share voting control and investment power over shares that may be deemed to be beneficially owned by the entities affiliated with Amazon.com NV Investment Holdings LLC, which are identified in footnote (5) above, but disclaims beneficial ownership of such shares. (17)Consists of (i) 119,784 shares of Class A common stock and (ii) 60,000 shares of Class A common stock subject to options that are exercisable within 60 days of April 24, 2024 held by Mr. Flatley. (18)Consists of (i) 56,279 shares of Class A common stock and (ii) 40,000 shares of Class A common stock subject to options that are exercisable within 60 days of April 24, 2024 held by Ms. Thomas-Graham. As set forth above, Ms. Thomas-Graham’s term as a Class III director ends at the 2024 Annual Meeting. (19)Consists of 8,393 restricted stock units which will vest within 60 days of April 24, 2024 held by Mr. Krafcik. (20)Consists of (i) 4,192,385 shares of Class A common stock, (ii) 12,806,201 shares of Class A common stock subject to options that are exercisable within 60 days of April 24, 2024, (iii) 169,538 restricted stock units which will vest within 60 days of April 24, 2024, respectively, and (iv) 7,825,000 shares of Class B common stock.
Non-Employee Director Compensation Program
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Non-Employee Director Compensation Program
Certain Relationships and Related Person Transactions