Elon Musk may be the world’s wealthiest person, but one of his competitors has claimed the title of highest-paid CEO in the automotive industry. Two days ago, news broke that Lucid Motors (NASDAQ:LCID) Peter Rawlinson currently commands the highest salary in his field, earning roughly $379 million per year.
It’s been a difficult start to the year for the luxury electric vehicle (EV) producer, which is considered to be one of Tesla’s (NASDAQ:TSLA) chief rivals. Since Rawlinson received this compensation package in 2022, LCID stock has been trending downward. And while the company seems focused on growth, Musk clearly doesn’t approve of how his competitor has opted to structure its leader’s salary.
What’s Happening With LCID Stock
It’s true that LCID stock has been struggling this week since news of Rawlinson’s salary broke. But that’s likely due to negative market momentum and not any company specific developments. TSLA stock is also down for the week, as are legal automakers Ford (NYSE:F) and General Motors (NYSE:GM). EV demand may be rising, but the looming auto workers strike isn’t good for any company in the space.
Musk seems more concerned with his hobby of taking shots at rivals over X, the platform formerly known as Twitter. When a self-proclaimed investor shared an article on Rawlinson’s salary from a Tesla blog, Musk responded with the following advisory:
Beware any company where leadership compensation is not linked to performance
— Elon Musk (@elonmusk) September 4, 2023
It is important to note, though, that Musk and Rawlinson have a history together. The Lucid CEO previously held the position of vice president and chief vehicle engineer at Tesla, where he worked directly on the Model S sedan. However, the New York Times reports that he left the company “amid rancor with Elon Musk,” whom he felt mistreated by.
Musk has since tried to claim that Rawlinson never held this position. However, a quick look around Tesla’s webpage makes it clear that he did. A company blog post from April 2010 states:
“Peter Rawlinson, Vice President and Chief Vehicle Engineer, is responsible for the technical execution and delivery of the Model S, and for leading a world-class vehicle engineering team.”
InsideEVs conducted an investigation into Musk’s claims and found further evidence to support Rawlinson’s argument that he did, in fact, hold the position of chief engineer at Tesla. While TSLA is still outperforming LCID stock, it certainly seems as though Musk still harbors some feelings of resentment toward his former employee who has become one of his chief competitors.
Why It Matters
Are Musk’s recent claims against Rawlinson accurate? Not completely. According to Fortune, “Lucid, like 88% of the 250 largest publicly traded U.S. firms, now uses performance-based compensation for at least some portion of its executive pay.”
By that logic, the Tesla CEO’s characterization of Lucid as a company is not entirely fair. Additionally, regulatory filings show that Rawlinson only received his current package after the company hit its targets for market capitalization in early 2022.
The further someone looks into this story, the more Musk appears to be targeting Rawlinson based on their history together. His comment could be partially due to the fact that Lucid is working hard to cut into Tesla’s share of the luxury EV market.
Deliveries begin this month for the Lucid Air Supreme, a highly anticipated EV created to rival the Tesla Model S Plaid. LCID stock will likely rise as anticipation builds for this new EV sensation.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
