Arm faces potential shareholder revolt over CEO's 'excessive' $800 million pay package — huge stock award would only be fully realised if chip designer hits $2 trillion valuation

British chip designer Arm is proposing an unprecedented $800 million performance-based pay package for CEO Rene Haas, contingent upon the company reaching a $2 trillion valuation by 2031. This extraordinary compensation plan has sparked controversy, with proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis urging shareholders to vote against it, deeming it excessive.

The package, awarded through a one-time Value Creation Plan (VCP) comprised of 425,000 Performance Share Units (PSUs), would be divided across three market-cap milestones: 25% if Arm reaches $1 trillion by March 31, 2029; 50% if it reaches $1.5 trillion by March 31, 2030; and the full payout if it reaches $2 trillion by March 31, 2031.

Haas' compensation is tied to Arm's market capitalization, calculated using a rolling-average closing share price over a 60-day period prior to each milestone. The shares' vesting periods extend beyond Haas' tenure at Arm, with the full award remaining accessible if the company surpasses a higher valuation milestone.