Elon Musk Would not Perceive CEO Pay
Elon Musk loves nothing greater than hopping on the social community he’s working to destroy and posting bizarre, uninformed nonsense — the vaguer the higher, lest he let slip an excessive amount of and reveal that the emperor is in truth not solely bare, however dumb as rocks. It’s a fragile tightrope efficiency, one which Musk is deeply unhealthy at. Normally he does this about international politics, disease spread, or his own companies, however his most up-to-date blunder comes from an space he ought to know properly: Government compensation.
On Monday, Musk tweeted — sorry, posted on X — about Lucid CEO Peter Rawlinson’s pay. In response to a tweet calling Rawlinson “the highest-paid automotive CEO in 2022,” Musk gave a dire warning to his followers: “Beware any firm the place management compensation isn’t linked to efficiency.” There’s just one downside: Rawlinson’s pay is linked to efficiency.
Lucid, like many (although not all) firms, likes to remain on the SEC’s good aspect. Its regulatory filings are available on the fee’s web site, together with what are generally known as 14A proxy statements — paperwork that lay out, amongst different disclosures, how an organization’s govt pay works. In Lucid Group’s 14A proxy statement for 2023, Rawlinson’s pay construction is clearly laid out: A base wage of $575,000, plus annual money incentives of as much as one other $575,000 primarily based on firm efficiency.
That base wage could also be increased than Musk’s famed zero-dollar base pay, however Musk’s complete compensation bundle from Tesla is exclusive — we’re not right here to match apples to the world’s richest oranges. The higher query is, how did Rawlinson flip a salary-plus-incentive payout of $1.15 million into that chart-topping $379 million quantity? There are some additional bonuses for efficiency talked about, nevertheless it appears the true cash comes from a deal made method again in 2021.
Again in March of 2021, Lucid Motors was bought out by Churchill Capital Acquisition Corp IV — a special purpose acquisition company, the recent new technique to get your startup on the Nasdaq. The newly-merged firm was renamed Lucid Group, and Rawlinson bought a fairly candy deal out of it. He has 13,834,748 items of inventory in Lucid Group that vest in levels over the course of 4 years, in addition to 16,024,411 shares of the corporate that vest in 5 tranches primarily based on firm efficiency. Particularly, these performance-based inventory vests are tied to Lucid Group’s market capitalization — its total worth on the inventory alternate. In 2022, Lucid Group hit 4 of the 5 targets for market capitalization, and Rawlinson banked 13,934,272 shares of the corporate’s inventory in return. That comes out to $95,171,077.76, primarily based on Lucid Group’s share worth on the final market day of 2022 — earlier than the wage, the opposite inventory choices, and the salary-based efficiency incentives.
So, as is so typically true, Musk is flawed. Rawlinson’s pay is instantly tied to Lucid’s efficiency, each via the salary-based incentives and the tranches of shares that launch primarily based on market capitalization. Musk would even have recognized that almost all of Rawlinson’s pay got here from inventory if he’d bothered to learn the article to which he was replying — however, alas, he doubtless doesn’t have time for little issues like that. He’s a lot too busy… suing the ADL? Oh, christ.
