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Lucid CEO Peter Rawlinson topped a survey of the most highly paid auto maker CEOs. Tesla CEO Elon Musk has an opinion about that.
Angel Garcia/Bloomberg
Tesla
CEO Elon Musk has some thoughts about CEO compensation, and he has in his crosshairs
Lucid
CEO—and former Tesla employee—Peter Rawlison.
Rawlinson tops Automotive News’ list of the highest-paid auto maker CEOs of 2022. It isn’t truly revelatory, as the compensation of top executives is already publicly disclosed.
“Beware any company where leadership compensation is not linked to performance,” tweeted Musk on Monday. Lucid didn’t return a request for comment about Musk’s tweet.
The number cited in the survey was $379 million for Rawlinson, who was at one time chief engineer of the Model S sedan, Tesla’s first production vehicle. Lucid’s proxy reports total compensation in 2022 of about $600,000 in cash and equivalents. The company preparing the survey said in an email that “methodology for that study is realized pay, so it includes the value of stock vested and options exercised during the year instead of value of equity granted during the year.”
The difference, however, is likely just timing and methodology. Lucid proxy statements report that Rawlinson has earned about $567 million over the past three years, or about $189 million a year on average, mainly due to a 2021 stock-related award worth some $566 million. In that year, Rawlinson was awarded about 14 million restricted stock units that vest over four years. He was awarded roughly 16 million additional units that vest based on achieving market capitalization milestones.
Lucid stock traded above $55 a share in 2021.
Four of the five market-cap-related tranches vested in 2022, and combined with the time-based awards, Rawlinson gained access to about 16 million shares in 2022. That’s worth about $101 million at today’s Lucid stock price of about $6.20 apiece. A year ago, those units were worth about $238 million.
Rawlinson’s base salary is relatively low, at $575,000 a year.
General Motors
(GM) CEO Mary Barra earned a $2.1 million base salary in 2022.
Base salary, however, rarely accounts for a majority of total compensation over time. Barra has earned total compensation of roughly $26 million a year on average for the past three years. The comparable number for
Ford Motor
(F) CEO Jim Farley is about $19 million a year.
Electric-vehicle CEOs seem to do better.
Rivian Automotive
(RIVN) CEO R.J. Scaringe has earned total comp of about $141 million a year on average for the past three years. Almost all of that is tied to $421 million in stock-related awards.
Musk’s total compensation over the past three years amounts to about $734 million, or almost $245 million a year. That was earned as milestones from the huge 2018 stock award were hit. The 2018 award has provided Musk with options worth some $70 billion.
Before investors point out to Musk that he has made more than Rawlinson over three years and that those in glass houses shouldn’t throw stones, Tesla stock is up more than 1,300% over the past five years, rising to about $250 from less than $18. Sales in 2018 amounted to about $21 billion in 2018, and 2023 sales are forecast to be $100 billion.
Musk also addressed his glass-house controversy recently. The Justice Department is looking into a glass house for Musk that may have resulted in, essentially, undisclosed compensation for the CEO.
“Just want to reiterate that there is no glass house (metaphors don’t count lol) built, under construction, or planned!” Musk tweeted on Sept. 1. “I’m not building any house of any kind anywhere. Period.”
Lucid stock is down about 57% over the past 12 months. The
S&P 500
and
Nasdaq Composite
are up about 15% and 22%, respectively. Slowing sales growth has weighed on investor sentiment.
Write to Al Root at allen.root@dowjones.com