QuantumScape Corp, a solid-state battery startup that went public last year via a blank-check deal, is about to vote on a multibillion-dollar pay package for its top executive that one proxy adviser described as “staggering.”
According to estimates by 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 certain objectives. The package will be one of the main items discussed during QuantumScape’s annual shareholder meeting on Wednesday.
In a recent study, Glass Lewis, which encouraged 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 after Tesla Inc’s success ushered in a flood of cash into the electric vehicle market. According to Dayna Harris, a partner at executive compensation company Farient Advisors, such agreements mimic the compensation deal that helped Tesla CEO Elon Musk become the world’s richest person. Last year, at least 15 business leaders won accolades worth $100 million or more, up from three when Musk earned his in 2018.
In a statement to shareholders justifying the package, QuantumScape wrote, “We strongly believe in setting demanding, difficult-to-achieve goals and then focused efforts to make them happen.” “This is why we built this new award on stretch goals and provided our top executives the opportunity to partake in the upside in a proportion that reflects the challenge of accomplishing them.”