Photo: Lucid
Peter Rawlinson turned Atieva into Lucid and helped it build a remarkable EV. Edmunds recently pointed out some inconsistencies about the vehicle, which did not prevent the Lucid CEO from pocketing $263 million in stocks. Ironically, it was all thanks to market capitalization, something that feeds an old discussion about executives’ compensations.
In March 2021, Lucid was still Atieva. At that time, its board established a CEO Grant, which consisted of RSUs (restricted stock units) based on time (45%) and performance (55%) goals. The time-based goals may give Rawlinson 13,834,748 Lucid RSUs. All Rawlinson has to do is work for Lucid for 16 quarters (4 years) to receive them.
The performance-based goals have to do with the company’s market cap. It consists of 16,024,411 shares divided into four tranches of 3,483,568 RSUs each and a final tranch of 2,090,140 stocks. You’ll see that the final result would actually be 16,024,412, but that’s not the number the Form S-1 presents. We have no idea why.
As Bloomberg Law clarifies, Lucid started trading in July 2021. By November 2021, it reached a market cap of $91 billion, which remained high enough for six months, the requirement for Rawlinson to bag the first four tranches of his performance-based compensation.
To be more specific, Lucid’s market cap had to be above $58.75 billion for more than six months for him to receive these first four tranches. This value was established as five times what the company was worth at the time of the SPAC merger that listed it: $11.75 billion.
The $263 million we mentioned at the beginning of this text are the value of these 13,934,272 RSUs. If you add everything Rawlinson can still earn, the value is $556 million. Remember that we are talking about shares and that they can appreciate, which may make Rawlinson’s compensation even higher.
The Lucid CEO can still pocket the last tranch if the EV maker remains at more than $70.5 billion for more than six months, something that he may achieve while also getting more RSUs just by working for Lucid.
What people currently discuss is if the stock price is a fair measurement for performance or if companies should establish more objective factors, such as revenue, sales, or market share, for example. While stock prices should reflect all that, market volatility shows that is not always the case.
The performance-based goals have to do with the company’s market cap. It consists of 16,024,411 shares divided into four tranches of 3,483,568 RSUs each and a final tranch of 2,090,140 stocks. You’ll see that the final result would actually be 16,024,412, but that’s not the number the Form S-1 presents. We have no idea why.
As Bloomberg Law clarifies, Lucid started trading in July 2021. By November 2021, it reached a market cap of $91 billion, which remained high enough for six months, the requirement for Rawlinson to bag the first four tranches of his performance-based compensation.
To be more specific, Lucid’s market cap had to be above $58.75 billion for more than six months for him to receive these first four tranches. This value was established as five times what the company was worth at the time of the SPAC merger that listed it: $11.75 billion.
The $263 million we mentioned at the beginning of this text are the value of these 13,934,272 RSUs. If you add everything Rawlinson can still earn, the value is $556 million. Remember that we are talking about shares and that they can appreciate, which may make Rawlinson’s compensation even higher.
The Lucid CEO can still pocket the last tranch if the EV maker remains at more than $70.5 billion for more than six months, something that he may achieve while also getting more RSUs just by working for Lucid.
What people currently discuss is if the stock price is a fair measurement for performance or if companies should establish more objective factors, such as revenue, sales, or market share, for example. While stock prices should reflect all that, market volatility shows that is not always the case.
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