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

The post Rivian CEO RJ Scaringe Should Be Fired, But Can’t Be appeared first on 24/7 Wall St..

Rivian (NASDAQ: RIVN) 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.

The post Rivian CEO RJ Scaringe Should Be Fired, But Can’t Be appeared first on 24/7 Wall St..