Nio said on Tuesday that its board of directors approved a grant of 248,454,460 restricted share units to founder, chairman and chief executive officer William Li on March 6.
The grant was made under a newly adopted 2026 Share Incentive Plan, according to documents filed with the US Securities and Exchange Commission (SEC) on Tuesday.
The package, disclosed in Nio‘s quarterly earnings release and formalised through an S-8 registration statement filed the same morning, is divided into ten equal tranches of approximately 24.8 million units each.
Vesting of each tranche is contingent on Nio achieving specific performance targets relating to market capitalisation and net profits.
The exact thresholds underpinning each tranche were not disclosed by the Shanghai-headquartered EV maker.
Valuation
At the $4.72 per-share reference price Nio used to calculate SEC registration fees — the approximate market price at the time of filing — the full package would be worth approximately $1.17 billion if all ten tranches vest.
At Tuesday’s pre-market trading price of $5.19, that figure rises to approximately $1.29 billion. Neither figure represents a guaranteed payout.
The restricted share units carry no value unless and until the underlying performance conditions are met for each tranche.
Dilution
The grant represents approximately 10% of Nio‘s total ordinary shares outstanding of roughly 2.47 billion as of the end of the fourth quarter, based on the weighted average share count disclosed in Tuesday’s earnings release.
Full vesting would be materially dilutive to existing shareholders.
Voting Rights
The new RSUs will be settled in Class A ordinary shares, which carry one vote per share.
Li’s existing controlling position in Nio derives from his holdings of Class C ordinary shares, which carry eight votes per share.
His economic stake in the company has declined over time as Nio has raised capital through successive share issuances, but his Class C holdings have preserved his voting control.
As of early 2023 — the most recent period for which Nio has publicly disclosed the breakdown — Li held approximately a 10.5% economic stake but approximately 44.2% of total voting rights.
The new RSU grant, if fully vested, would increase Li’s economic interest without adding to his supervoting position.
Filing Details
The award agreement filed as Exhibit 99.2 to the first of Tuesday’s two 6-K filings names Li as grantee and sets out the general terms of the plan, but leaves the grant date, vesting commencement date and the specific performance schedule blank, indicating the formal documentation had not yet been executed as of the filing date.
The plan itself, as an employee benefit plan under the Securities Act of 1933, is incorporated by reference into the S-8 rather than filed as a standalone exhibit.
The structure tying CEO compensation to a ladder of market capitalisation and profitability milestones across ten tranches.
It follows the broad template established by Tesla‘s 2018 CEO compensation plan for Elon Musk, which subsequently became a reference point for performance-linked pay at high-growth technology companies.
The timing of the board approval is notable.
The grant was approved on March 6, four days after Nio issued a profit alert on March 2 confirming that the company expected to report a non-GAAP adjusted operating profit for the fourth quarter of 2025 — its first on that measure.
The quarterly results, reported Tuesday, confirmed a non-GAAP adjusted operating profit of 1,251.3 million yuan ($178.9 million) for the quarter.
Nio has also set an internal target of achieving full-year profitability in 2026.
Li founded Nio in November 2014 and has served as its chairman and chief executive since the company’s inception.
The founder and CEO has not previously received a performance-based equity grant of this scale.
Nio‘s stock jumped by more than 6% in Tuesday’s pre-market session after the Chinese EV maker reported its first-ever profitable quarter, beating Wall Street estimates across earnings, revenue and guidance.
