- Nio awarded CEO William Li up to 248 million restricted share units, potentially worth about $1.17 billion, tied to ambitious performance milestones.
- The stock award is split into 10 tranches, with half requiring huge gains in market capitalization (from $30 to $120 billion) and the other half tied to net profit targets (from $1.5 to $6 billion).
- U.S.-listed shares of Nio fell over 3% in premarket trading Wednesday after the plan was revealed, echoing similar, high-stakes compensation structures at rivals Tesla and Rivian.
On Wednesday, U.S.-listed shares of Nio Inc. (NIO) fell over 3% in premarket trading after the electric vehicle maker unveiled a massive performance-based stock award for founder and CEO William Li. The board approved the grant of 248 million restricted share units (RSUs) on March 6 under a new incentive plan, according to a regulatory filing.
The multi-billion dollar package is split into ten equal tranches, with five tied directly to market capitalization milestones. Consequently, the company’s stock would need to more than triple from its recent $9.5 billion valuation to hit the first target of $30 billion. Meanwhile, the remaining five tranches require Nio to achieve annual net profit goals starting at $1.5 billion, a stark turnaround from its “GAAP net loss of 14.9 billion yuan ($2.1 billion) for 2025”.
This structure follows a broader trend in the EV sector, mirroring the ambitious template set by Tesla for CEO Elon Musk. Similarly, Rivian Automotive granted CEO R.J. Scaringe a performance-based package potentially worth up to $4.6 billion. Investor sentiment on Nio was measured as “extremely bullish” on Stocktwits amid high message volume.
Nio shares had just staged their biggest rally in a year on Tuesday, jumping over 15%. However, the stock remains up only about 12% year-to-date, outperforming Tesla and Rivian, which are down roughly 11% and 16%, respectively.
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