Nov 7 (Reuters) - Rivian Automotive RIVN.O on Friday replaced Chief Executive RJ Scaringe's previous compensation plan with a larger stock award that will only pay out if the electric-vehicle maker hits new profit targets along with reduced share price milestones.

The pay package would be worth over $4.55 billion including the costs of exercising options.

The overhaul highlights Rivian's push to retain its founder and keep him focused on growth and profitability as the automaker, known for its R1S SUVs and R1T pickups, gears up to launch next year its smaller, more affordable R2 SUV that will compete with Tesla's best-selling Model Y crossover.

The move comes a day after Tesla TSLA.O shareholders approved a record $1 trillion pay package for CEO Elon Musk.

Under the new plan, Scaringe is receiving options to purchase up to 36.5 million shares of Rivian's Class A stock, about 16 million more than his previous grant, at an exercise price of $15.22 apiece, the company said in a filing with the U.S. Securities and Exchange Commission.

The award will vest only if Rivian achieves reduced stock-price milestones ranging from $40 to $140 a share over 10 years, as well as new operating income and cash flow targets over the next seven years.

The previous pay package, awarded in 2021, was linked to Rivian's share price reaching $110 a share and went up to $295. That now stands canceled.

Rivian shares closed at $15.22 on Thursday. The one-year median price target for the company stands at about $14, according to data compiled by LSEG.

"The rigorous and challenging milestones associated with this option award are structured in such a way that ensures the options only vest should the company deliver significant value to our shareholders," a Rivian spokesperson said in a statement.

If Rivian hits all the milestones as part of the package, the shareholders will gain $153 billion in value, it said in the filing.

Rivian's board also doubled Scaringe's base salary to $2 million, saying the changes were made with input from an independent compensation consultant and were designed to better align pay with shareholder returns.

Separately, Scaringe was granted 1 million common units in Mind Robotics, a newly formed Rivian spinoff with external funding developing industrial AI technology, giving him up to a 10% economic interest once the business profit exceed a certain threshold.

Scaringe will serve as chairman of the board of directors for Mind Robotics, and Rivian is a shareholder of the company, it had said earlier this week.

Rivian canceled Scaringe's earlier 2021 performance award covering 20.4 million shares, saying the targets tied to that grant were unlikely to be met.

(Reporting by Abhirup Roy in San Francisco and Akash Sriram in Bengaluru; Editing by Alan Barona)

((Akash.Sriram@thomsonreuters.com; On X as @HoodieOnVeshti; +91-99017-77617))