Arm CEO in line for billion-dollar pay package if company hits targets

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Arm, the chip design company headquartered in Cambridge but listed on the Nasdaq, has proposed a compensation package for Chief Executive Rene Haas that could exceed $1 billion if the company hits a series of escalating market capitalization targets through 2031.

Under the terms disclosed in a filing with the U.S. Securities and Exchange Commission, Haas would receive 425,000 shares — worth up to $800 million at the maximum payout — if Arm reaches a $1 trillion valuation by 2029, $1.25 trillion by 2030, and $2 trillion by the end of March 2031. Shareholders will vote on the updated remuneration policy at Arm’s annual meeting, typically held in September.

The package is structured as a “value creation plan” that Arm said “appropriately reflected the significant value creation required by market capitalisation milestones.” The company also increased the ceiling on Haas’s annual share award from 125% to 200% of salary, depending on performance.

Haas, 63, joined Arm in 2013 and was promoted to chief executive in 2022. His total remuneration for the year ending March exceeded $60 million. He was recently also named chief executive of SoftBank’s international business. SoftBank, the Japanese conglomerate, controls 86% of Arm.

Arm said in its SEC filing that the package is intended to “enable Arm to attract and retain the highest calibre talent from the global technology industry.” The company’s remuneration committee developed the package to be “competitive with US standards reflecting the location of our key competitors for executive and other talent, the listing on Nasdaq and the US-location of our chief executive officer,” according to the filing.

The proposed payouts would rank among the largest ever awarded by a British company. Arm currently has a market capitalization of $367 billion, well above the valuation of any UK-listed company. HSBC is worth £239 billion and AstraZeneca £214 billion.

Arm employs 6,500 staff, including 3,000 in the UK, and has about 500 users of its chip designs worldwide, including Apple, Samsung, Qualcomm, and Nvidia. The company recently announced plans to begin manufacturing its own chips, ending three decades in which it focused exclusively on licensing its designs to other companies.

Haas is pushing Arm from its core strategy of providing architecture for smartphone microchips into developing semiconductors for AI datacenters. He has predicted that the shift could increase the company’s revenues fivefold.

The proposal comes amid a broader trend of market-capitalization-linked executive compensation at U.S.-listed technology companies. In September, Tesla agreed a pay deal under which Chief Executive Elon Musk could become the world’s first trillionaire if the electric carmaker’s valuation rose from $1 trillion to $8.5 trillion over a decade.

Arm was founded in 1990 and was listed on the London Stock Exchange for 18 years before SoftBank acquired it for $32 billion in 2016. Hermann Hauser, who helped launch the company, called the deal “a sad day for technology in the UK.” Nvidia subsequently attempted to acquire Arm, but the deal collapsed in 2022 because of regulatory hurdles. SoftBank then moved to float the company on Nasdaq, where its valuation has since soared.

Arm declined to comment.