NEW YORK • Penang-born Broadcom chief executive Tan Hock Eng received US$103.2 million (S$136 million) in reported compensation last year, his biggest pay package, as the computer chipmaker prepares to make the largest acquisition in the history of technology.
Mr Tan's stock grant, valued at US$98.3 million, will vest in 2020 and 2021 at its target value if the California-based company's shares outperform at least half of the companies in the S&P 500 during the performance periods, according to a regulatory filing on Tuesday.
If the firm's stock return exceeds 90 per cent of members of the index ending in 2021, and the return is positive, Mr Tan can get a maximum of 4.5 times as many shares.
He also got US$1.1 million in salary and a US$3.71 million bonus. The firm said it does not intend to grant him any additional equity that can be earned before 2021.
It is the largest pay package Mr Tan has got in a single year. Broadcom is rewarding him for what he has done and what he might pull off - his US$121 billion hostile bid for Qualcomm, the maker of chips that power smartphones.
Before this, his largest compensation package was the US$31.9 million he received for 2013 at a Broadcom predecessor company, Avago Technologies.
Investors like Mr Tan's track record. Broadcom's share price has climbed steadily from less than US$20 in 2009 when it went public to US$249.62 now. That has helped him reap more than US$194.6 million from vested shares and option exercises over the past five years, according to data compiled by Bloomberg.
The MBA degree holder from Harvard University worked with Mr Quek Leng Chan as managing director of Hume Industries in Malaysia from 1983 to 1988, before helming a venture capital fund in Singapore from 1988 to 1992.
With Broadcom, Mr Tan has built one of the world's largest chipmakers through a string of acquisitions, slashed costs to boost profitability and is three weeks away from one more coup.
On March 6, Qualcomm shareholders will vote on whether to elect Broadcom-nominated directors and overturn the opposition of that company's board and management to the takeover offer.
Qualcomm on Tuesday unveiled a sweetened US$44 billion agreement to acquire NXP Semiconductors, its most defiant move in its defence against Broadcom's hostile bid. The new deal puts pressure on Broadcom to decide if it will stick with a stipulation in its bid that Qualcomm does not raise its offer for NXP.
It could also strengthen Qualcomm's defences because it allows its shareholders to better assess the standalone value of Qualcomm as an alternative to a deal with Broadcom.
Qualcomm shares fell 1.3 per cent to US$63.99, significantly below Broadcom's latest US$82 per share cash-and-stock offer unveiled on Feb 5, as investors saw the new NXP deal as increasing the chances of Qualcomm repelling Broadcom.
Broadcom said it was evaluating its options in response to Qualcomm's move and noted that the revised price for NXP was well beyond what Qualcomm has repeatedly characterised as "full and fair".
It called the new deal a transfer of value from Qualcomm shareholders to NXP shareholders.