Q4 Results/Call

[RM-S8]

I see a (quite) few envious members here with a deep entitlement chip on their shoulder.
Why.

 

[xponents]

Other than low float, low volume trading stocks, retail Robinhood investors don't move prices. Market movers and institutional trading are the ones that dictate current market share price. The current share price of LCID is what the market thinks it's currently based on the guidance that Lucid provided and other macro level factors that could affect this guidance like high interest rates, EV demand, supply chain, etc. Only things that can move the price up from what the market thinks, you need catalysts like partnership announcements, beating and increasing guidance, speculative rumors, etc. Stay in school!

All true, except robinhood traders create a significant amount of those rumors you were talking about and hype stocks up/discredit stocks to a point that others are affected by it too. A very indirect example of this was the GME squeeze, which was largely perpetuated by the “robinhood trader” stereotyped people on WSB.

 

[Genghis]

Also, I’m pretty sure they low balled the 9k production for 2024.

Well, the market didn't like that guidance as the stock went under $3 again, sigh. Hope they learned from their past 6 missed quarters that forward moving, they can meet or beat to stabilize the market price and change to positive momentum.

 

[LucidfanAZ]

I've been a Lucid shareholder since the CCIV days, I rode the $60 highs to the $2.50 lows and everything in between (with lots of buying and selling along the way). One thing that's been constant is I have yet to see a positive earnings call result. now I'm confident that time will come, but the only times Lucid stock price has increased dramatically was the Motor trend "car of the year" announcement and the PIF buyout rumor. I hope later this year its because of a "we have 10s of thousands of Gravity orders".

 

[hmp10]

What I can't rationalize is the Board's recent $6 million cash bonus award to Peter. Don't mind riding this pony for the long haul, but what kind of performance metrics results in a cash bonus in light of the reported numbers? Any insights would be appreciated.

Executive compensation often has many discrete components that are not always inter-related. The press coverage said the $6MM bonus was tied to the reveal of the Lucid Gravity. The fact that it was a cash bonus instead of something with a longer tail also suggests this was a payment tied to meeting one specific goal, not to the overall performance of the company.

As I've surmised before, I think the Saudis view Lucid as central to their aim to stake out a key position in EV technology for the long haul. And that would mean a portion of Rawlinson's incentive compensation is going to be pegged to meeting goals relating specifically to that. Overall financial performance and stock price performance will be recognized in other components of his compensation.

As CEO pay goes these days, $6MM is actually not that big a payout for meeting a goal relating to a product as critical to the company as the Gravity will be. It could even be that this bonus was rolled back a bit in light of other financial pressures on the company. Hard to know without a seat on the Board's compensation committee . . . which they keep denying me for some indecipherable reason.

 

[Haggy]

Let's see how the next quarter is. With a $69k starting price, they have to be able to sell more than 9k cars...i mean it's pretty cheap in the overall market. The only thing that could hold them back is the stigma of how overpriced Lucid used to be. Lucid seems to be doing heavy advertising though, so i'm optimistic!

What can hold them back is "What's Lucid?", "Who makes Lucid?" and seeing no dealership next to the Mercedes and BMW dealerships on the auto mall street. Too many people don't know what Lucid is. I see them on the road every time I go anywhere longer than a neighborhood trip but I suspect that most people in many other places have never seen one. Then there's the issue of knowing about it but not wanting to buy a car from a company they hadn't heard of.

There are also automotive websites actively telling people not to buy a Lucid until they switch to NACS. I'm certainly not against NACS but if Lucid started selling cars with the ports today, I wouldn't buy one unless it came with an adapter to allow me to use CCS. It's not that I prefer CCS but there are virtually no Tesla superchargers open yet, they few that are won't charge a Lucid at an acceptable speed, and the existing CCS networks have yet to add any significant number of NACS plugs. So even after Lucid switches, charging issues won't suddenly disappear.

 

[PhotoEye]

Executive compensation often has many discrete components that are not always inter-related. The press coverage said the $6MM bonus was tied to the reveal of the Lucid Gravity. The fact that it was a cash bonus instead of something with a longer tail also suggests this was a payment tied to meeting one specific goal, not to the overall performance of the company.

As I've surmised before, I think the Saudis view Lucid as central to their aim to stake out a key position in EV technology for the long haul. And that would mean a portion of Rawlinson's incentive compensation is going to be pegged to meeting goals relating specifically to that. Overall financial performance and stock price performance will be recognized in other components of his compensation.

As CEO pay goes these days, $6MM is actually not that big a payout for meeting a goal relating to a product as critical to the company as the Gravity will be. It could even be that this bonus was rolled back a bit in light of other financial pressures on the company. Hard to know without a seat on the Board's compensation committee . . . which they keep denying me for some indecipherable reason.

Thank you.
Relative to the Gravity, a question was asked during the earnings call specifically on when reservations would be opened. Unfortunately, no answer was given. So, there are many of us on the 'waiting list' standing by to place an order.
Relative to your Board seat, be patient, it will come!

 

[hmp10]

Relative to your Board seat, be patient, it will come!

Thank you. Your $3MM bonus will arrive soon thereafter . . . .

 

[xponents]

Thank you. Your $3MM bonus will arrive soon thereafter . . . .

Wait, you're joking about waiting for the board seat, right? I could imagine you doing that so I had to make sure

 

[hmp10]

Wait, you're joking about waiting for the board seat, right? I could imagine you doing that so I had to make sure

Well, I was joking. But now you've got my hopes up. Do you know someone I could call?

 

[Haggy]

Probably without Peter Lucid won’t survive? Also Tesla struggled with just model S and dismal sales for over 8 years until model 3 came out. When I bought model s in 2015, Tesla was also in same boat, stock price at around $20 ; each stack is now X15. May not be that drastic with Lucid but I guess they need time. Everyone who has seen my car has been stopping (even reversing in their track) and asking me. So people just don’t know that they exist unless they are a car buff. I love this car more than Tesla; as a driver and the pleasure. iam sure this appeals to anyone who love cars. If they love tech then they are already with Tesla.

I am too a share holder now for simple reason that I have bought their product so I must be believing in them

Tesla's numbers were far from dismal. On a model by model basis, there was one model and you'd have to compare its sales to sales of other models by other manufacturers for sedans in that price range. Tesla's numbers were quite good.

Likewise, Lucid needs to look at the overall market for sedans in the price range. With EVs alone, here are the numbers for Mercedes:

Mercedes-Benz EQS Sedan Sales Figures

Automotive Sales Data and Statistics

www.goodcarbadcar.net

If you look at the S class, it was 10,122 for last year in the US, and that's with far more name recognition and a wider sales network. It's not realistic to expect Lucid to outsell them. With any car, a model is doing well if it outsells other cars in its class by individual model, and if we broaden the scope beyond EV, it's still not a huge market. Tesla was killing it when they were up to 30,000 per year. Comparing them to Toyota making millions made no sense because Tesla didn't have a line of 12 vehicles not counting trucks.

Tesla had the advantage of no other EV competition in that segment or even mid luxury. Had the Model 3 existed back then, I might have looked into one, test driven it and decided that it met my needs. But it was a moot point because the Model S was my only choice.

Lucid is now at an effectively lower price point. Although I bought a Model S in 2014 despite it being outside of the range I would have looked at (I tended to buy what I thought I needed, not what I thought I could afford), the Pure is less than I spent in the past if you adjust for inflation. It's the equivalent of spending $30k in the 1990s, which I was doing and getting a lot less for my money. It just seems like a lot more because inflation bumped up prices in a short time for things across the board and people haven't necessarily recalibrated their view of what an expensive car is. Saying "cars are expensive" without looking at prices relative to inflation misses a lot, and people are saying that.

 

[Haggy]

Well, I was joking. But now you've got my hopes up. Do you know someone I could call?

I'm sure that a lot of us could give meaningful feedback to the Board and some of us might be genuinely of high value. I might make a valuable board member myself, but the first thing I'd do as a board member is try to get rid of the others for making the stupid decision of even considering me without a resume to back it up.

 

[WildRide47]

Actually, 6 million doesn’t go very far in marketing….

It would certainly go far enough to put some Lucid automobiles in auto shows for various cities. How can you say that would not be helpful because $6 million does not go very far? Anything that helps increase awareness of the brand is helpful. I think your remark is shortsighted.

Giving Rawlinson a bonus when Lucid starts selling more cars I am all for, because he has produced a fabulous automobile and deserves the compensation when the company sales and the stock price reflects that.

Putting it in Rawlinson's pocket at this point in time when the stock is near an all time low is bad optics.

 

[hydbob]

It would certainly go far enough to put some Lucid automobiles in auto shows for various cities. How can you say that would not be helpful because $6 million does not go very far? Anything that helps increase awareness of the brand is helpful. I think your remark is shortsighted.

Giving Rawlinson a bonus when Lucid starts selling more cars I am all for, because he has produced a fabulous automobile and deserves the compensation when the company sales and the stock price reflects that.

Putting it in Rawlinson's pocket at this point in time when the stock is near an all time low is bad optics.

You know what bad optics are? Not honoring your contractual obligations.

 

[hmp10]

How can you say that would not be helpful because $6 million does not go very far? Anything that helps increase awareness of the brand is helpful. I think your remark is shortsighted.

I was responding to a post that asked for insights about the bonus Rawlinson received. Having dealt with executive compensation packages for much of my career, I gave my views of why Rawlinson might have gotten such a bonus. I did not say I would have awarded this bonus or structured any other element of his pay a particular way had I been in position to do so.

You're taking my post well beyond where it went. Nowhere did I say that $6MM would not be helpful or does not go very far. I said that in the context of current CEO pay it's not that huge a sum. In fact, I disagree with CEO pay trends of the past several decades and think they have had deleterious unintended consequences on many companies. But having worked in the entertainment industry, the financial services industry, and been a senior managing director at one of the world's most successful hedge funds, I can tell you I've seen compensation packages in which this $6MM would be a rounding error.

 

[xponents]

I was responding to a post that asked for insights about the bonus Rawlinson received. Having dealt with executive compensation packages for much of my career, I gave my views of why Rawlinson might have gotten such a bonus. I did not say I would have awarded this bonus or structured any other element of his pay a particular way had I been in position to do so.

You're taking my post well beyond where it went. Nowhere did I say that $6MM would not be helpful or does not go very far. I said that in the context of current CEO pay it's not that huge a sum. In fact, I disagree with CEO pay trends of the past several decades and think they have had deleterious unintended consequences on many companies. But having worked in the entertainment industry, the financial services industry, and been a senior managing director at one of the world's most successful hedge funds, I can tell you I've seen compensation packages in which this $6MM would be a rounding error.

For specifically hedge funds, since comp is often tied to performance, 6 million would be a small fraction of the total compensation for the highest performers, to my knowledge. I actually think 6m is fair, especially if it was tied to Gravity's launch.

 

[WildRide47]

I was responding to a post that asked for insights about the bonus Rawlinson received. Having dealt with executive compensation packages for much of my career, I gave my views of why Rawlinson might have gotten such a bonus. I did not say I would have awarded this bonus or structured any other element of his pay a particular way had I been in position to do so.

You're taking my post well beyond where it went. Nowhere did I say that $6MM would not be helpful or does not go very far. I said that in the context of current CEO pay it's not that huge a sum. In fact, I disagree with CEO pay trends of the past several decades and think they have had deleterious unintended consequences on many companies. But having worked in the entertainment industry, the financial services industry, and been a senior managing director at one of the world's most successful hedge funds, I can tell you I've seen compensation packages in which this $6MM would be a rounding error.

I was not responding to your post hmp10. I was responding to No Gas (see his above post) who specifically stated that "actually $6 million does not go very far in marketing".

I disagreed with his remark and said it was shortsighted, as $6 million can make a difference if it enabled more Lucids to be shown at auto shows or malls.

I stand by my statement.

 

[WildRide47]

You know what bad optics are? Not honoring your contractual obligations.

You know what bad optics are? Not honoring your contractual obligations.

Contractural obligations should be honored.

That does not mean Rawlinson has to accept it.

Imagine the positive feedback in the news media that would make and as well as other CEO 's to stand up and take notice.

I actually think it would help the image of Lucid, but that is just IMO and maybe I am just dreaming pie in the sky.

 

[hydbob]

Contractural obligations should be honored.

That does not mean Rawlinson has to accept it.

Imagine the positive feedback in the news media that would make and as well as other CEO 's to stand up and take notice.

I actually think it would help the image of Lucid, but that is just IMO and maybe I am just dreaming pie in the sky.

Headline would be, "How bad is Lucid financially that Rawlinson turns down his bonus?"

 

[hmp10]

I was not responding to your post hmp10. I was responding to No Gas (see his above post) who specifically stated that "actually $6 million does not go very far in marketing".

I disagreed with his remark and said it was shortsighted, as $6 million can make a difference if it enabled more Lucids to be shown at auto shows or malls.

I stand by my statement.

I do apologize. The way the screen opened I thought you were responding to me. I obviously wasn't paying enough attention.

I agree that $6MM would go a long way for certain kinds of marketing efforts (although it wouldn't buy much in the way of Super Bowl ads).

However, compensation funding is usually not viewed as readily fungible with operations funding, and there can be good reasons for that. When a company is under stress and its key executives could become attractive targets for headhunters -- or even so exhausted that the money they've already got is enough to tempt them to just hang it up -- this might be a time you load up on their economic incentives to stay.

Also, you have to take into account the perspective of the chief stakeholders in a company and understand it may be different from your own. The Saudi PIF is the chief stakeholder in Lucid. I believe they made a long-term bet that Rawlinson is the man who can deliver what they most want: to own the leading edge technology in the EV space. Having been the heaviest hitters in an OPEC world, they seem to want to hold that post position as we transition to a world of electric transportation. They're going to put up the funds they believe it takes to motivate and keep Rawlinson. If they think marketing needs more money, they'll dig into another pocket for that. They won't take it out of Rawlinson's pocket.

As for suggesting that Rawlinson should have declined the bonus, I cannot think of a signal that would alarm the market more than if the CEO, having just unveiled a key future product, essentially said, "we're in such trouble that I feel bad about the bonus for doing this."