CEO Jagdeep Singh may get stock options worth up to US$2.3 billion
CEO Jagdeep Singh may get stock options worth up to US$2.3 billion

According to proxy advisory firm Glass Lewis, Chief Executive Officer Jagdeep Singh could receive stock options worth up to $2.3 billion under the arrangement if the company reaches specific objectives.

Shareholders of QuantumScape Corp., a solid-state battery firm that went public last year in a blank-check sale, approved a multibillion-dollar pay package for its top executive that one proxy adviser described as “staggering.”

According to proxy advisory firm Glass Lewis, Chief Executive Officer Jagdeep Singh could receive stock options worth up to $2.3 billion under the arrangement if the company reaches specific objectives. The package was approved in a preliminary vote during a webcast of QuantumScape’s annual shareholder meeting on Wednesday, and the business said a final tally will be available later.

In a recent report, Glass Lewis, which had recommended stockholders to reject the package, noted, “The disclosed monetary value cost of the grant is astonishing.” Another consulting group, Institutional Shareholder Services, was also against it.

Large pay packages are becoming more prevalent among fast-growing firms, especially since Tesla Inc.’s success released a flood of cash in the electric vehicle sector. Such agreements are similar to the one that helped Tesla CEO Elon Musk become the world’s richest person, according to Dayna Harris, a partner at executive compensation company Farient Advisors. Last year, at least 15 corporate leaders got accolades worth $100 million or more, a threefold rise from Musk’s honour in 2018.

“We passionately believe in setting demanding, difficult-to-achieve goals and then focused efforts to make them happen,” QuantumScape stated in a shareholder letter defending the package. “This is why we built this new reward on stretch objectives and provided our senior leaders the chance to partake in the upside in a way that is proportional to the challenge of attaining them.”

QuantumScape, which is backed by Volkswagen AG and Bill Gates’ venture fund, soared to a valuation of nearly $50 billion late last year on the promise of its next-generation technology, which could dramatically accelerate EV adoption by providing automakers with a safer, cheaper alternative to lithium-ion batteries. It has been under fire this year from short-sellers who are sceptical of its prospects, with shares down 72 percent as of Tuesday’s close.

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