Quantumscape CEO Jagdeep Singh Aims For A $2.3 Billion Payoff

In a deal seen as mirroring a similar deal for Tesla founder Elon Musk a couple of years back, Shareholders of QuantumScape Corp., the solid-state battery startup that went public through a blank-check deal last year, recently approved an approximately $2.3 billion (Rs 17,486 crore) pay package for its Chief Executive Officer Jagdeep Singh. The approval is contingent on the company meeting various milestones.

Interestingly, proxy advisory firms have strongly been opposed to the deal. “The disclosed dollar value cost of the grant is staggering,” Glass Lewis, which had urged stockholders to reject the package, wrote in a recent report. Institutional Shareholder Services, another advisory firm, also opposed it.

Founded in 2010 by Jagdeep Singh, Tim Home, and Professor Fritz Prinz of Stanford University, QuantumScape’s biggest backer is auto giant Volkswagen and Bill Gates’s venture fund. On the back of a large order from VW, and what it termed a breakthrough in its next generation technology, it shot up to a valuation of almost $50 billion late last year . The premise here is a safer, cheaper alternative to lithium-ion batteries, that is big enough to alter the growth trajectory of the sector or the EV transition.

A study by Deloitte showed that the top three considerations for consumers buying an EV are price, reliability, and cost to charge. While the current lithium-ion batteries are seen as sufficiently efficient for phones and laptops, they still lack the range that would make EVs a viable alternative to internal combustion engines and trigger issues such as long charging times and weak energy density.

The claimed advantages of QuantumScape’s solid-state battery technology include higher cell energy density, lower charge time, ability to undertake more charging cycles and thereby a longer life, and improved safety.

Further, lower cost could be a game-changer, given that at 30 per cent of the total cost, battery expenses are a key driver of the vehicle costs. Lithium-ion battery costs are currently about $137 per kWh, and are expected to reach $101/kWh by 2023, according to multiple tracking agencies. QuantumScape claims it is targeting to lower battery cost by 15-20% relative to the cost of lithium-ion batteries in several years.

On a webcast of the company’s annual shareholder meeting last month, the package, comprising stock options potentially valued at $2.3 billion, passed in a preliminary vote, and the company said a final tally would be available later.

Large pay packages are becoming increasingly common among fast-growing startups, particularly after the success of Tesla Inc. unleashed a wave of cash in the electric vehicle market. Such pacts echo the compensation agreement that helped make Tesla CEO Elon Musk the world’s richest person, said Dayna Harris, a partner at executive compensation firm Farient Advisors.

Singh, who studied Computer Science at Stanford University, earned an MBA from University of California, and founded companies like Lightera Networks and AirSoft, has joined this list of handsomely compensated CEOs.