Rivian CEO RJ Scaringe Should Be Fired, But Can’t Be

By Douglas A. McIntyre Published Jun 17, 11:03AM EDT

Rivian CEO RJ Scaringe Should Be Fired, But Can’t Be — © Rivian R1S at Hillsdale Shopping Center 2 (CC BY-SA 3.0) by Mliu92

Rivian (NASDAQ: RIVN | RIVN Price Prediction) has fumbled the ball at least twice recently as the company launches what it calls the “affordable” R2. Most versions of the SUV cost $55,000 to $60,000. At least that it is $20,000 or more below its current model R1S and R1T

Lease prices for the R2 range from $800 to $1,100, depending on which analysis is used to set the number. Many potential buyers think it is too high.

Just after the launch, Rivian laid off 2% of its 15,700-person workforce. Scaringe did not take a pay cut to save the company money or to show any sympathy. His new pay package is for $403 million. According to the FT, “The founder of electric-truck maker earns about 13 times more than next best-paid American auto executive”

Rivian’s stock is down 88% in the last five years, while the S&P 500 is 60% higher.

As we have often written on these pages, Rivian produced 10,236 vehicles in the first quarter of the year. It delivered 10,365. Rivian lost $416 million in Q1.

But, for those of you who don’t know how a corporate structure can be set up so that the CEO can hold their job permanently, Rivian has a dual share arrangement. There is the common stock, and then there are the Class B shares. The Class B shares have 100% voting power and control of the company. Scaringe can’t ne fired.

Several other famous companies and dozens of others have similar voting structures. These include Ford (NYSE: F), The New York Times, Alphabet (NASDAQ: GOOG), and Meta (NASDAQ: META). The notion that shareholders have a say in governance or board selection is false.

Scaringe is more clever than he is successful–at least at running Rivian.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.