DEF 14A of Broadcom Inc.
Filed Feb 26, 2024 · FY20230001140361-24-009541
Executive Compensation
Executive Compensation The Board takes a thoughtful, disciplined and well-governed approach to executive compensation that is not a “one-size-fits-all” approach and reflects Broadcom’s transformation from a semiconductor company into a leading infrastructure technology company. Broadcom also operates in industries where there is fierce competition for critical talent and increasing interest in our CEO and executives due to their successful track record. To retain and motivate Hock Tan, President and CEO, and Charlie Kawwas, President, Semiconductor Solutions Group, the independent members of the Board granted Mr. Tan and the Compensation Committee granted Dr. Kawwas performance stock unit (PSU) awards in fiscal 2023 that require (i) achievement of formidable stock price performance hurdles and (ii) continued service over a five-year vesting period. Mr. Tan’s fiscal 2023 PSU award was front-loaded to cover the market-based value of both his annual cash and long-term incentive opportunities over a period of five years. Dr. Kawwas’ fiscal 2023 PSU award was also front-loaded to cover the market-based value of his annual long-term incentive opportunities over a period of five years. The annualized GAAP value of these PSU awards was in line with our compensation peer group benchmarks. During the five-year vesting period, we do not intend to grant annual equity awards to Mr. Tan and Dr. Kawwas and Mr. Tan will not be eligible to receive annual cash incentive payouts because these PSU awards were front-loaded.
Executive Compensation
These PSU awards are 100% at risk and deliver value to Mr. Tan and Dr. Kawwas only if our stockholders receive significant and sustained value appreciation. Additional disclosure on the methodology and design of these PSU awards is provided below in “Compensation Discussion and Analysis.”
DIRECTOR NOMINEES
DIRECTOR NOMINEES
DIRECTOR NOMINEES
| Name | Independent | | Diane M. Bryant | | | Gayla J. Delly | | | Kenneth Y. Hao | | | Eddy W. Hartenstein (Lead Independent Director) | | | Check Kian Low | | | Justine F. Page | | | Henry Samueli, Ph.D. (Chairman of the Board) | | | Hock E. Tan (President & CEO) | | | Harry L. You | |
DIRECTOR NOMINEES
See “Board of Directors” below for more information about the Director Nominees.
Total Stockholder Return and Return of Capital
Total Stockholder Return and Return of Capital Our total stockholder return (“TSR”) continues to significantly outperform the S&P 500 and our compensation peer group. Over the five fiscal year period through 2023, we delivered TSR of 351% and our market capitalization increased from $103.6 billion to $346.0 billion. In addition, our strong cash flow in fiscal 2022 enabled us to return an aggregate of $13.5 billion to our stockholders during fiscal 2023, consisting of $7.7 billion in cash dividends and $5.8 billion under our stock repurchase program. We also paid $1.9 billion for the elimination of shares withheld to cover employee withholding taxes due upon the vesting of net settled equity awards. Our strong free cash flow in fiscal 2023 enabled us to increase our quarterly common stock dividend to $5.25 per share in our first quarter of fiscal 2024, an increase of 14% over the quarterly dividend paid in fiscal 2023.
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION
FISCAL 2023 NAMED EXECUTIVE OFFICER COMPENSATION Our executive compensation program is designed to reward our executive officers for growing and sustaining stockholder value consistent with our strategic plan, align the interests of our executive officers with the interests of our stockholders, and attract, motivate and retain critical talent in a highly competitive talent market. Consistent with the philosophy and objectives of our executive compensation program, 96% of our Chief Executive Officer’s (“CEO”) and 94% of our other named executive officers’ (“NEOs”) average target total direct compensation in fiscal 2023 is comprised of variable compensation with a majority tied to stock price, as shown in the charts below. The short-term incentives and the long-term incentives in the form of performance stock unit (“PSU”) awards granted to our NEOs in fiscal 2023 were subject to challenging and rigorous goals to achieve record financial results and significantly increase stockholder value. See “Compensation Discussion and Analysis — Elements of Fiscal 2023 Executive Compensation Program — Long-Term Incentive Compensation” below for more information about the equity awards granted to our NEOs in fiscal 2023.
BOARD COMMITTEES
BOARD COMMITTEES Our Board has the following committees: Audit Committee, Compensation Committee, NESG Committee and Executive Committee. The Audit Committee, the Compensation Committee and the NESG Committee each operate under a charter that satisfies the applicable rules of the SEC and the Nasdaq Stock Market (“Nasdaq”) listing standards. The charters for all four committees are available in the “Investor Center — Corporate Governance — Documents” section of our website. Stockholders may also request a copy from Investor Relations, Broadcom Inc., 3421 Hillview Avenue, Palo Alto, California 94304.
BOARD COMMITTEES
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BOARD COMMITTEES
The current members and chairs of the committees are provided below.
BOARD COMMITTEES
| | Committees | | | | | Name | Audit | Compensation | NESG | Executive | | Diane M. Bryant | | | | | | Gayla J. Delly | | | | | | Raul J. Fernandez | | | | | | Kenneth Y. Hao(1) | | | | | | Eddy W. Hartenstein (Lead Independent Director) | | | | | | Check Kian Low | | | | | | Justine F. Page | | | | | | Henry Samueli, Ph.D. (Chairman of the Board) | | | | | | Hock E. Tan (President & CEO) | | | | | | Harry L. You | | | | |
BOARD COMMITTEES
| | Member | | Chair |
BOARD COMMITTEES
| (1) Mr. Hao has not been appointed to any committees.
Compensation Committee
| Members | Primary Responsibilities | | Meetings in Fiscal 2023 | | Harry L. You (Chair) Diane M. Bryant Eddy W. Hartenstein Check Kian Low | • | Determine executive officer (other than our CEO) base and incentive compensation | 5 | | | • | Recommend to the independent directors CEO base and incentive compensation | | | | • | Design (in consultation with management or our Board) and evaluate compensation plans, policies and programs | | | | • | Administer equity-based plans and approve the terms of grants under those plans | | | | • | Confirm that compensation policies and practices do not encourage unnecessary risk taking | | | | • | Review and discuss, at least annually, the relationship between risk management policies and practices, business strategy and executive officers’ compensation | | | | • | Establish and periodically review policies concerning perquisite benefits | | | | • | Review and approve all employment agreements, severance and change-in-control arrangements and perquisites for executive officers and other executives (other than our CEO) and recommend to the independent directors such agreements and perquisites relating to our CEO | | | | • | Evaluate and provide input on CEO and senior management succession planning | | | | • | Review and make recommendations to our Board regarding compensation for non-employee directors | | | | • | Establish and periodically review stockholder ownership guidelines | | | | • | Provide oversight over the Compensation Committee’s compensation consultant | |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION On an annual basis, the Compensation Committee reviews our non-employee director compensation, with input from its independent compensation consultant regarding market practice and the competitiveness of our non-employee director compensation. Our Board approves any changes to our non-employee director compensation, taking into consideration the recommendations of the Compensation Committee and based on its own review. Our non-employee directors receive cash and equity compensation in consideration for their service on our Board, as set forth in more detail below. Our non-employee directors do not receive any non-equity incentive compensation or participate in any company pension plan or deferred compensation plan. In fiscal 2023, Dr. Samueli declined all compensation, including equity awards, for his service on our Board and as its Chairman. Beginning in March 2024, Dr. Samueli will receive cash and equity compensation provided to our non-employee directors as set forth below in accordance with the determination by our Board in December 2023 that Dr. Samueli is an “independent” director. We do not compensate Mr. Tan for his service on our Board or any committee of our Board.
Equity Compensation
Equity Compensation Our non-employee directors are also entitled to receive the following equity awards:
Equity Compensation
| • | upon appointment to our Board, an initial RSU award using a target value of $250,000, prorated based on the expected portion of a year to be served between the time of such director’s appointment and the anticipated date of our annual meeting of stockholders immediately following the director’s appointment; and |
Equity Compensation
| • | an annual RSU award using a target value of $250,000, to be granted on the date of each annual meeting of stockholders, subject to the director’s re-election at such meeting. |
Equity Compensation
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Equity Compensation
To determine the number of shares of Broadcom common stock granted pursuant to such awards, the value of the award is divided by the average closing price quoted on the Nasdaq Global Select Market over 30 calendar days immediately preceding the grant date. These RSU awards vest in full on the earlier of (i) the first anniversary of the grant date or (ii) the date on which the annual meeting of stockholders immediately following the grant date is held, subject to the director’s continued service on our Board.
Director Compensation for Fiscal 2023
Director Compensation for Fiscal 2023 The following table sets forth the compensation earned by our non-employee directors during fiscal 2023.
Director Compensation for Fiscal 2023
| Name(1) | Fees Earned or Paid in Cash | Stock Awards(2) | Total | | Diane M. Bryant | $111,250 | $247,962 | $359,212 | | Gayla J. Delly | $126,250 | $247,962 | $374,212 | | Raul J. Fernandez | $126,250 | $247,962 | $374,212 | | Eddy W. Hartenstein | $235,000 | $247,962 | $482,962 | | Check Kian Low | $121,250 | $247,962 | $369,212 | | Justine F. Page | $141,250 | $247,962 | $389,212 | | Harry L. You | $144,375 | $247,962 | $392,337 |
Director Compensation for Fiscal 2023
| (1) Mr. Hao is not listed as he was appointed to our Board in fiscal 2024. |
Director Compensation for Fiscal 2023
| (2) Represents the grant date fair value of an RSU award for 397 shares of Broadcom common stock granted to the director on April 3, 2023 following his or her election to our Board and determined in accordance with Accounting Standards Codification Topic Number 718 (“ASC 718”), which is the closing price of Broadcom common stock on the date of grant, reduced by the present value of dividends expected to be paid on Broadcom common stock prior to vesting. |
Director Compensation for Fiscal 2023
The table below shows the aggregate number of shares of Broadcom common stock underlying the RSU awards held by the directors as of October 29, 2023:
Director Compensation for Fiscal 2023
| Name | Number of Shares Underlying RSUs | | Diane M. Bryant | 397 | | Gayla J. Delly | 397 | | Raul J. Fernandez | 397 | | Eddy W. Hartenstein | 397 | | Check Kian Low | 397 | | Justine F. Page | 397 | | Harry L. You | 397 |
Director Compensation for Fiscal 2023
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Director Compensation for Fiscal 2023
ELECTION OF DIRECTORS
DIRECTOR NOMINEES
DIRECTOR NOMINEES Our Board is currently comprised of ten directors and our directors are to be elected each year at the annual meeting of stockholders. Mr. Hao was appointed to our Board in February 2024. As Mr. Fernandez is not standing for re-election, his term will end at the Annual Meeting and the size of our Board will be reduced to nine directors. Upon the recommendation of the NESG Committee, our Board nominated the nine individuals below for election as directors, all of whom are currently directors. Stockholders may not vote their proxies for a greater number of persons than the number of director nominees provided below. Our Board expects that each of the director nominees will be available to serve as a director. In the event a director nominee resigns or otherwise becomes unwilling or unable to serve after the mailing of the Internet Notice but before the Annual Meeting, our intention would be to make a public announcement of such resignation and either reduce the size of our Board or appoint a substitute nominee, in accordance with our Amended and Restated Bylaws (the “Bylaws”). If we reduce the size of our Board, this would reduce the number of nominees to be elected at the Annual Meeting. Votes received in respect of such director would not be counted in such circumstances. In the event that we instead propose to elect a substitute nominee at the Annual Meeting to fill any such vacancy, it is intended that the shares represented by the proxy will be voted for such substitute nominee. Our Board believes that each director nominee has the experience, qualifications, integrity, diversity of background and understanding of our business and industries required for service on our Board. Our Board, in consultation with the NESG Committee, also believes that each director nominee has demonstrated the willingness and the ability to dedicate sufficient time and attention to fulfill the responsibilities required as a director and that any service with other public companies does not and will not impact service on our Board.
Director Qualifications, Skills, Experience and Diversity
Director Qualifications, Skills, Experience and Diversity
Director Qualifications, Skills, Experience and Diversity
| Qualifications & Skills | Bryant | Delly | Hao | Hartenstein | Low | Page | Samueli | Tan | You | | Business Development & Strategy | | | | | | | | | | | Cybersecurity | | | | | | | | | | | Executive Leadership | | | | | | | | | | | Finance/Accounting | | | | | | | | | | | Global Business | | | | | | | | | | | Manufacturing/Supply Chain | | | | | | | | | | | Semiconductor | | | | | | | | | | | Software/Cloud Computing | | | | | | | | | | | Technology/Innovation | | | | | | | | | | | Diversity | | | | | | | | | | | Gender | | | | | | | | | | | Female | | | | | | | | | | | Male | | | | | | | | | | | Ethnicity | | | | | | | | | | | African American or Black | | | | | | | | | | | Alaskan Native or Native American | | | | | | | | | | | Asian | | | | | | | | | | | Hispanic or Latinx | | | | | | | | | | | White | | | | | | | | | | | Two or More Races or Ethnicities | | | | | | | | | | | LGBTQ+ | | | | | | | | | | | Did Not Disclose | | | | | | | | | |
Director Qualifications, Skills, Experience and Diversity
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Director Qualifications, Skills, Experience and Diversity
The biographical information of each director nominee provided below is as of February 22, 2024.
Director Qualifications, Skills, Experience and Diversity
| Diane M. Bryant | | | Director Since: 2019 Independent Director Age: 61 | Board Committees: • Compensation | | Ms. Bryant served as Chief Executive Officer of NovaSignal Corp., a medical technology and data company specializing in the assessment and management of brain health, from January 2020 to June 2023. She was Chief Operating Officer of Google Cloud at Alphabet Inc. from December 2017 to July 2018. Prior to Alphabet, she held several executive leadership positions at Intel Corporation, including Group President and Executive Vice President and General Manager of the Data Center Group that develops server, storage and network platforms for the digital services economy and Corporate Vice President and Chief Information Officer. She also serves on the Chancellor’s Board of Advisors at the University of California at Davis. Ms. Bryant serves as a director of Haemonetics Corporation. She served as a director of United Technologies Corporation from January 2017 until its acquisition by Raytheon Company in April 2020. | Qualification & Skills: • Business Development & Strategy • Cybersecurity • Executive Leadership • Global Business • Manufacturing/Supply Chain • Semiconductor • Software/Cloud Computing • Technology/Innovation |
Director Qualifications, Skills, Experience and Diversity
| Gayla J. Delly | | | Director Since: 2017 Independent Director Age: 64 | Board Committees: • Audit • NESG | | Ms. Delly served as Chief Executive Officer of Benchmark Electronics Inc., a company that provides contract manufacturing, design, engineering, test and distribution services to manufacturers of computers, medical devices, telecommunications equipment and industrial control and test instruments, from 2012 to 2016. She held several executive leadership positions at Benchmark, including President from 2006 to 2011, Executive Vice President and Chief Financial Officer from 2001 to 2006, and Corporate Controller and Treasurer from 1995 to 2001. She is a certified public accountant and was a senior audit manager at KPMG LLP before joining Benchmark. Ms. Delly serves as a director of Flowserve Corporation and Littelfuse, Inc. She served as a director of National Instruments Corporation from March 2020 until its acquisition by Emerson Electric Co. in October 2023 and Benchmark from 2011 to 2016. | Qualification & Skills: • Business Development & Strategy • Executive Leadership • Finance/Accounting • Global Business • Manufacturing/Supply Chain • Semiconductor • Technology/Innovation |
Director Qualifications, Skills, Experience and Diversity
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Director Qualifications, Skills, Experience and Diversity
| Kenneth Y. Hao | | | Director Since: 2024 Independent Director Age: 55 | Board Committees: • None | | Mr. Hao has served as Chairman and Managing Partner of Silver Lake, a global technology investment firm, since December 2019. He joined Silver Lake in 2000 and has served in various roles at Silver Lake, including Managing Partner and Managing Director from 2012 to 2019. Prior to Silver Lake, he was Managing Director at Hambrecht & Quist (now part of J.P. Morgan) from 1990 to 1999. Mr. Hao serves as a director of SolarWinds Corporation and Splunk Inc. He served as a director of NortonLifeLock Inc. (formerly Symantec Corporation) from March 2016 to September 2022 and SMART Global Holdings, Inc. from April 2011 to April 2021. | Qualification & Skills: • Business Development & Strategy • Cybersecurity • Executive Leadership • Finance/Accounting • Global Business • Semiconductor • Software/Cloud Computing • Technology/Innovation |
Director Qualifications, Skills, Experience and Diversity
| Eddy W. Hartenstein | | | Director Since: 2016 Lead Independent Director since 2018 Age: 73 | Board Committees: • Compensation • NESG (Chair) • Executive | | Mr. Hartenstein served as the publisher and Chief Executive Officer of the Los Angeles Times from 2008 to 2014. He was President and Chief Executive Officer from 2011 to 2013 and co-President from 2010 to 2011 of the Tribune Company. He was Chief Executive Officer from 2001 to 2004 and President from its inception in 1990 to 2001 of DIRECTV Inc. Mr. Hartenstein serves as lead independent director of SIRIUS XM Holdings Inc. He served as a director of TiVo Corporation from September 2016 until its acquisition by Xperi Corporation in June 2020, Tribune Publishing Company from August 2014 to May 2020, Yahoo, Inc. from April 2016 to June 2017, Broadcom Corporation from 2008 to 2016, Rovi Corporation from 2015 until its acquisition by TiVo Corporation in 2016, and SanDisk Corporation from 2005 until its acquisition by Western Digital Corporation in 2016, and as Vice Chairman of the Board of The DIRECTV Group Inc. from 2003 to 2004 and Chairman of the Board of DIRECTV Inc. from 2001 to 2004. | Qualification & Skills: • Business Development & Strategy • Executive Leadership • Finance/Accounting • Global Business • Semiconductor • Technology/Innovation |
Director Qualifications, Skills, Experience and Diversity
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Director Qualifications, Skills, Experience and Diversity
| Check Kian Low | | | Director Since: 2016 Independent Director Age: 64 | Board Committees: • Compensation • NESG | | Mr. Low has served as a founding partner and director of NewSmith Capital Partners LLP, an independent partnership providing corporate finance advice and investment management services, for which he manages the Asia Pacific offices, since 2003. He is an owner and director of Cluny Capital Limited since 2007. He was a Special Advisor to Singapore Telecommunications Limited from October 2021 to September 2023. Prior to founding NewSmith, he held various positions at Merrill Lynch & Co., including Senior Vice-President, member of the Executive Management Committee and Chairman for the Asia Pacific Region. Mr. Low served as a director of Singapore Telecommunications Limited from May 2011 to July 2021. | Qualification & Skills: • Business Development & Strategy • Executive Leadership • Finance/Accounting • Global Business |
Director Qualifications, Skills, Experience and Diversity
| Justine F. Page | | | Director Since: 2019 Independent Director Age: 61 | Board Committees: • Audit (Chair) • Executive | | Ms. Page served as Vice President of Finance, Chief Financial Officer and Secretary of Integrated Circuit Systems, Inc. (“ICS”), a publicly-traded timing solutions IC company, from 1999 until its acquisition by Integrated Device Technology, Inc. in 2005. She also held several leadership positions at ICS, including Director of Finance and Administration and Assistant Treasurer from 1993 to 1999. She holds a B.A. degree in accounting from Immaculata College and a Master of Taxation degree from Villanova University. Ms. Page served as a director of Broadcom Limited from 2016 to 2017, SunEdison Semiconductor Limited from 2014 to 2016 and Avago Technologies Limited from 2008 to 2016. | Qualification & Skills: • Executive Leadership • Finance/Accounting • Global Business • Manufacturing/Supply Chain • Semiconductor |
Director Qualifications, Skills, Experience and Diversity
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Director Qualifications, Skills, Experience and Diversity
| Henry Samueli, Ph.D. | | | Director Since: 2016 Chairman of the Board since 2018 Age: 69 | Board Committees: • Executive (Chair) | | Dr. Samueli served as our Chief Technical Officer from February 2016 to December 2018. He co-founded Broadcom Corporation in 1991 and held several executive leadership positions at Broadcom Corporation until its acquisition by Broadcom Inc. (formerly known as Avago Technologies Limited), including Chief Technical Officer from 1991 to 2008 and 2009 to 2016, Technology Advisor from 2008 to 2009, and Vice President of Research and Development from 1991 to 2003. He is the co-owner of the National Hockey League’s Anaheim Ducks since 2005. He is a Professor in the Electrical and Computer Engineering Department at the University of California, Los Angeles since 1985 (on leave of absence since 1995) and a Distinguished Adjunct Professor in the Electrical Engineering and Computer Science Department at the University of California, Irvine since 2003. Prior to Broadcom Corporation, he co-founded and was Chief Scientist at PairGain Technologies from 1988 to 1994. He held various engineering and management positions in the Electronics and Technology Division of TRW, Inc. from 1980 to 1985. He is a Fellow of the Institute of Electrical and Electronics Engineers (IEEE), a Fellow of the American Academy of Arts and Sciences, a Fellow of the National Academy of Inventors and a Member of the National Academy of Engineering. Dr. Samueli served as Chairman and Co-Chairman of the Board of Broadcom Corporation from 2011 to 2016 and from 1991 to 2008. | Qualification & Skills: • Business Development & Strategy • Executive Leadership • Global Business • Manufacturing/Supply Chain • Semiconductor • Technology/Innovation |
Director Qualifications, Skills, Experience and Diversity
| Hock E. Tan | | | Director Since: 2006 President & CEO Age: 72 | Board Committees: • Executive | | Mr. Tan has served as our President and CEO since March 2006. He was President and Chief Executive Officer at Integrated Circuit Systems, Inc. (“ICS”), a publicly-traded timing solutions IC company, from 1999 until its acquisition by Integrated Device Technology, Inc. (“IDT”) in 2005. He also held several executive leadership positions at ICS, including Chief Operating Officer from 1996 to 1999 and Senior Vice President and Chief Financial Officer from 1995 to 1999. He was Vice President of Finance at Commodore International, Ltd. from 1992 to 1994 and held senior management positions at PepsiCo, Inc. and General Motors Corporation. He was managing director of Pacven Investment, Ltd., a venture capital fund in Singapore, from 1988 to 1992 and was managing director of Hume Industries Ltd. in Malaysia from 1983 to 1988. Mr. Tan serves as a director of Meta Platforms, Inc. Mr. Tan was Chairman of the Board of IDT, a publicly-traded semiconductor company, following its acquisition of ICS from 2005 to 2008. | Qualification & Skills: • Business Development & Strategy • Cybersecurity • Executive Leadership • Finance/Accounting • Global Business • Manufacturing/Supply Chain • Semiconductor • Software/Cloud Computing • Technology/Innovation |
Director Qualifications, Skills, Experience and Diversity
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Director Qualifications, Skills, Experience and Diversity
| Harry L. You | | | Director Since: 2019 Independent Director Age: 64 | Board Committees: • Audit • Compensation (Chair) • Executive | | Mr. You served as Chief Financial Officer from September 2016 to August 2019 and President from September 2016 to February 2019 and in May 2019 of GTY Technology Holdings Inc., a software as a service company that offers cloud-based solutions for the public sector. He was Executive Vice President in the Office of the Chairman of EMC Corporation from 2008 to 2016 and oversaw corporate strategy and new business development, including mergers and acquisitions, joint ventures and venture capital activity. He was Chief Executive Officer from 2005 to 2007 and Interim Chief Financial Officer from 2005 to 2006 of BearingPoint Inc. He was Executive Vice President and Chief Financial Officer of Oracle Corporation from 2004 to 2005. Prior to joining Oracle, he held several key positions in finance, including Chief Financial Officer of Accenture Ltd. He has also served as a trustee of the U.S. Olympic Committee Foundation since 2016. Mr. You serves as a director of IonQ, Inc. Mr. You served as Vice Chairman of the Board of GTY Technology from February 2019 to July 2022 and as a director of Coupang, Inc. from January 2021 to June 2023, Genius Sports Limited from April 2021 to December 2022, Rush Street Interactive, Inc. from September 2019 to June 2022 and Korn/Ferry International from 2005 to 2016, Mr. You is also involved in the following special purpose acquisition companies that we believe do not require the same time commitment as an operating company. Mr. You has served as Chief Financial Officer since August 2023 and served as Co-Chief Executive Officer from March 2022 to March 2023 of dMY Squared Technology Group, Inc. Mr. You is Chairman of the Board of dMY Squared Technology Group and Coliseum Acquisition Corp. Mr. You served as a director of these special purpose acquisition companies: dMY Technology Group, Inc. VI from April 2021 to April 2023, dMY Technology Group, Inc. II from June 2020 to April 2021 and dMY Technology Group, Inc. IV from December 2020 to December 2021. | Qualification & Skills: • Business Development & Strategy • Cybersecurity • Executive Leadership • Finance/Accounting • Global Business • Software/Cloud Computing • Technology/Innovation |
Director Qualifications, Skills, Experience and Diversity
Our Board recommends a vote FOR the election of each of the director nominees.
Director Qualifications, Skills, Experience and Diversity
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Director Qualifications, Skills, Experience and Diversity
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee is responsible for the appointment, compensation, retention and oversight of the independent auditors retained to audit our consolidated financial statements. The Audit Committee has reappointed PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for fiscal 2024. Our Board and the Audit Committee believe that the continued retention of PwC is in the best interests of Broadcom and our stockholders. We expect a representative from PwC to be present at the Annual Meeting. This representative will have the opportunity to make a statement if the representative so desires and is expected to be available to respond to appropriate questions. Our stockholders are not required to ratify the appointment of PwC as our independent auditors. However, we are submitting the appointment of PwC to our stockholders for ratification as a matter of good corporate practice. In the event of a negative vote, the Audit Committee will reconsider whether or not to continue to retain PwC. Even if the appointment is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of Broadcom and our stockholders.
Our Board recommends a vote FOR approval of
STOCKHOLDER ENGAGEMENT Our Board values open and ongoing engagement with our stockholders to develop a better understanding of our stockholders’ views on various matters, including executive compensation, succession planning, risk oversight and sustainability. Members of our Board engage annually with our stockholders to obtain their feedback and for our Board to consider a range of diverse perspectives. Prior to the 2023 annual meeting, we contacted our stockholders representing 54% of common stock outstanding. Our Chairman of the Board, Lead Independent Director, Compensation Committee Chair and representatives from the Legal and Human Resources teams (the “management engagement team”) met with our stockholders representing 49% of common stock outstanding. In these meetings, our stockholders primarily focused on the incremental PSU award granted to Mr. Tan in fiscal 2022 outside of his regular annual equity grant cycle to reward achievement of strategic priorities. Our stockholders provided feedback that they preferred this incremental PSU award have a performance period longer than one year and more disclosure on its pre-established performance metrics and determination of achievement. This initial feedback informed our Board and Compensation Committee in developing responsive actions to address the concerns of our stockholders. After the 2023 annual meeting, we contacted our stockholders representing 53% of common stock outstanding and our Compensation Committee Chair and management engagement team met with our stockholders representing 52% of common stock outstanding to better understand the 32% support of the Say-on-Pay proposal at the 2023 annual meeting (the “2023 Say-on-Pay proposal”). Actions contemplated by our Board and Compensation Committee in response to the feedback received from the meetings prior to the 2023 annual meeting and the 2023 Say-on-Pay proposal vote results were discussed with our stockholders at these meetings. In these meetings, our stockholders provided feedback that the main consideration behind their vote against the 2023 Say-on-Pay proposal was the incremental PSU award granted to Mr. Tan in fiscal 2022 for the reasons provided in the first round of meetings. Additional feedback obtained during these meetings included a request from several stockholders that we provide more explanatory disclosure regarding the determination of the executive officers’ individual multipliers for their annual cash incentive payouts. Several stockholders also requested more disclosure around the methodology and design of the PSU award granted to Mr. Tan and Dr. Kawwas in fiscal 2023, with more explanation on the PSU award granted to Mr. Tan as it was front-loaded to cover the market-based value of both his annual cash and long-term incentive opportunities over a period of five years to incentivize the achievement of our long-term growth strategy. Throughout these meetings, our stockholders acknowledged our executive officers’ extraordinary performance in growing stockholder value. We also consistently heard from our stockholders that a commitment by our Board and Compensation Committee regarding special performance awards granted outside of the regular annual equity grant cycle and enhanced disclosure on the determination of the executive officers’ individual multipliers as provided below would directly address their concerns.
2023 SAY-ON-PAY VOTE AND OUR RESPONSE
| What We Heard | Our Response | | Fiscal 2022 CEO Strategic PSU Award Most stockholders indicated the incremental PSU award granted to Mr. Tan in fiscal 2022 lacked adequate disclosure of the pre-established performance metrics and the determination of achievement. | Granting off-cycle special performance awards is not our typical practice. Our Board and Compensation Committee commit that, in the rare and exceptional circumstance a special performance award is considered for an executive officer, the award will: • be supported by detailed disclosure of the pre-established performance metrics and the determination of achievement, unless such disclosure would pose a competitive harm to Broadcom, and • include a performance period that is at least three years, unless our Board and Compensation Committee determine that a longer performance period would defeat the purpose of the award. | | Most stockholders expressed a preference for performance periods longer than one year for special performance awards. | | | Annual Incentive Plan Several stockholders requested additional explanatory disclosure on the determination of the individual multipliers for the executive officers’ annual cash incentive payouts. | We enhanced our disclosure in “Compensation Discussion and Analysis” to provide more information regarding the determination of the individual multipliers, including a summary of achievements that were considered for the final payout for each NEO. | | Fiscal 2023 CEO and NEO Kawwas PSU Awards Several stockholders requested additional disclosure on the methodology and design of the PSU awards granted to Mr. Tan and Dr. Kawwas in fiscal 2023. | Mr. Tan will not be eligible for annual cash incentive payouts during the five-year vesting period of his 2023 PSU award. Our Board does not intend to grant annual equity awards to Mr. Tan during the five-year vesting period of his 2023 PSU award. Our Compensation Committee does not intend to grant annual equity awards to Dr. Kawwas during the five-year vesting period of his 2023 PSU award. In “Compensation Discussion and Analysis,” we disclosed the methodology and design of the 2023 PSU awards granted to Mr. Tan and Dr. Kawwas, including the market-based value, structure and formidable stock price performance hurdles above the $470.12 closing stock price on the grant date. |
OVERVIEW
OVERVIEW Our executive compensation program is designed to reward our executive officers for growing and sustaining stockholder value consistent with our strategic plan, align the interests of our executive officers with the interests of our stockholders, and attract, motivate and retain critical talent in a highly competitive talent market. In line with the philosophy and objectives of our executive compensation program, more than 90% of our executive officers’ total compensation is comprised of variable compensation with a majority tied to stock price. In addition, our executive officers’ short-term incentives and long-term incentives in the form of PSU awards are subject to challenging and rigorous goals to achieve record financial results and significantly increase stockholder value.
Total Stockholder Return and Return of Capital
Total Stockholder Return and Return of Capital Our TSR continues to significantly outperform the S&P 500 and our compensation peer group. Over the five fiscal year period through 2023, we delivered TSR of 351% and our market capitalization increased from $103.6 billion to $346.0 billion. In addition, our strong cash flow in fiscal 2022 enabled us to return an aggregate of $13.5 billion to our stockholders during fiscal 2023, consisting of $7.7 billion in cash dividends and $5.8 billion under our stock repurchase program. We also paid $1.9 billion for the elimination of shares withheld to cover employee withholding taxes due upon the vesting of net settled equity awards. In addition, our strong free cash flow in fiscal 2023 enabled us to increase our quarterly common stock dividend to $5.25 per share in our first quarter of fiscal 2024, an increase of 14% over the quarterly dividend paid in fiscal 2023.
Total Compensation Components
Total Compensation Components Our executive compensation program is designed to keep our executive officers’ total compensation competitive with the compensation of executives in comparable positions at other companies in our compensation peer group. The Compensation Committee and the independent directors believe long-term incentives are necessary to attract, motivate and retain our executive officers and to align the interests of our executive officers with the interests of our stockholders. As a result, the total target cash compensation (base salary and short-term incentives) for our executive officers is generally lower than the median of the competitive market, but in combination with long-term incentives, the total compensation for our executive officers is higher than the median of the competitive market.
Total Compensation Components
| Component | Purpose & Description | | Base Salary | • Provide a level of fixed pay for stability and retention • Reflect scope, responsibilities and sustained individual performance • Set to be generally lower than the competitive market median in order to set the target value for PSU awards that results in target total compensation being higher than the competitive market median | | Short-Term Incentives (“STI”) | • Reward achievement of challenging and rigorous pre-established corporate financial goals based on revenue and adjusted non-GAAP operating income and divisional goals • Provide meaningful incentives to meet short-term (annual) objectives • Recognize individual contributions and performance | | Long-Term Incentives (“LTI”) | • Reward efforts to grow sustainable, long-term stockholder value • Encourage retention and mitigate compensation-related risks with stock ownership guidelines • PSU value awarded at above the competitive market median to incentivize achievement of challenging and rigorous performance goals |
Fiscal 2023 Total Compensation Components
Fiscal 2023 Total Compensation Components The charts below compare the fiscal 2023 target total compensation for our CEO and our other NEOs. Target total compensation consists of (i) base salary, (ii) target STI through the APB Plan and (iii) target LTI in the form of equity awards comprised of RSU and PSU awards based on the fair market value of the awards on the grant date, assuming target performance, as applicable. As shown in the charts below, 96% of our CEO’s and 94% of our other NEOs’ average target total compensation in fiscal 2023 is comprised of variable compensation with a majority tied to stock price.
Alignment with Stockholders
Alignment with Stockholders The interests of our executive officers are aligned with our stockholders’ interests because we link a significant portion of their target total compensation opportunity to stockholder returns in the form of PSU awards that are subject to the attainment of pre-established performance-based objectives. For our CEO and President, Semiconductor Solutions Group, 100% of their equity awards are in the form of PSU awards. For our other executive officers, 50% of their equity awards are in the form of PSU awards at target and 50% in the form of RSU awards, where the delivered value fluctuates based on our stock price.
Attract, Motivate and Retain
Attract, Motivate and Retain Our executive compensation program is designed to attract qualified, experienced and talented executives in a highly competitive talent market. We attract, motivate, retain and reward these executives, whose skills, knowledge and performance are critical to our ongoing success. Equity awards and especially multi-year equity awards are a long-term retention tool for our executive officers. When granting equity awards or when recommending to the independent directors an equity award grant to our CEO, the Compensation Committee considers each executive officer’s role, responsibilities, experience, expertise and overall value to Broadcom, as well as how much unvested equity the executive officer then holds as an indicator of retention risk. This pay-for-performance strategy keeps our executive officers and other employees in critical areas engaged and motivated, as evidenced by our global voluntary attrition rate in fiscal 2023, which was approximately 3.3% and well below the technology industry benchmark (AON, 2023 Salary Increase and Turnover Study – Second Edition, September 2023). This continuity has helped Broadcom become a leading infrastructure technology company and achieve record financial results and increase stockholder value.
Executive Compensation Governance
| Best Practices We Employ | | Practices We Do Not Employ | | | | Pay-for-performance compensation philosophy | | No excessive risk taking in incentive plan designs | | | Majority of NEO compensation at risk and tied to long-term performance | | No re-pricing of underwater stock options without stockholder approval | | | Performance metrics directly tied to value creation for stockholders | | No excise tax gross-ups | | | Caps on cash and equity incentive plan payouts | | No dividend equivalents on unearned RSUs / PSUs | | | Robust annual stockholder engagement | | No supplemental retirement or pension benefits | | | Annual risk assessment of compensation programs | | No guaranteed bonuses | | | Engagement of an independent compensation consultant | | No “single trigger” change in control payments or benefits | | | CEO compensation reviewed and approved by the independent directors | | No hedging or pledging of stock by employees and directors | | | Robust stock ownership guidelines for all executive officers and directors | | No excessive executive perquisites | | | Clawback policy compliant with SEC requirements and Nasdaq listing standards | | |
Individual Executive Compensation Assessment
| • | current base salary, target APB Plan opportunities (and prior fiscal year payouts), the accumulated value of outstanding and unvested equity awards and other benefits; |
Internal Pay Parity
Internal Pay Parity While we do not maintain a formal policy regarding internal pay parity, it is considered by the Compensation Committee and the independent directors when determining compensation. Consistent with market practice and competitive market benchmarking, our CEO is compensated at a higher level than our other executives due to his higher level of experience, peer market benchmarks, responsibility and accountability. Given Mr. Tan’s responsibility for Broadcom’s overall performance, the independent directors believe weighting his total compensation more heavily toward long-term, performance-based incentive compensation is consistent with market practice, appropriately reflects his contributions and directly aligns his incentives with the interests of our stockholders. Accordingly, Mr. Tan receives more of his total compensation in the form of LTI compensation through PSU awards as compared to our other executive officers.
Role of Compensation Consultant
Role of Compensation Consultant Meridian provided consulting services on executive and non-employee director compensation-related matters to the Compensation Committee and the independent directors in fiscal 2023, including assessments of executive and non-employee director compensation based on competitive market compensation data analyses. In addition, the
Role of Compensation Consultant
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Role of Compensation Consultant
Compensation Committee relied on Meridian for periodic updates on regulatory developments and market trends related to executive and non-employee director compensation matters. Meridian did not provide any other services to Broadcom in fiscal 2023. The Compensation Committee assessed the independence of Meridian pursuant to SEC and Nasdaq rules and concluded that Meridian was independent and its work for the Compensation Committee did not raise any conflict of interest.
COMPENSATION COMPETITIVE ANALYSIS
COMPENSATION COMPETITIVE ANALYSIS The Compensation Committee works with its independent compensation consultant to develop a meaningful compensation peer group for purposes of understanding competitive market compensation practices. The compensation peer group is annually reviewed and updated as necessary. The compensation peer group is used for comparative purposes only. The Compensation Committee does not benchmark any pay elements or target total compensation to a specific percentile. In the absence of relevant peer group data, the Compensation Committee reviews industry-based market pay survey data (“market survey data”). In August 2022, the Compensation Committee approved the compensation peer group for fiscal 2023, which appears below and was developed in consultation with Meridian. In order for the compensation peer group to better reflect Broadcom’s technology industry peers and the peers identified by the proxy advisory firms, we removed 3M Company, Danaher Corporation, Honeywell International, Inc. and Thermo Fisher Scientific, Inc. from the peer compensation group. We also removed Dell Technologies, Inc. from the compensation peer group due to its revenues and market capitalization falling outside of the selection criteria set forth below. We added Accenture plc, Lam Research Corporation and Visa Inc. to the compensation peer group based on meeting all of the applicable relevant selection criteria set forth below. The following selection criteria were considered as guidelines when developing the compensation peer group:
COMPENSATION COMPETITIVE ANALYSIS
| Fiscal 2023 Compensation Peer Group | | | | | Accenture plc | Cisco Systems, Inc. | Micron Technology, Inc. | Salesforce, Inc. | | Adobe, Inc. | Intel Corporation | NVIDIA Corporation | Texas Instruments Incorporated | | Advanced Micro Devices | International Business Machines Corporation | Oracle Corporation | Visa Inc. | | Applied Materials, Inc. | Lam Research Corporation | PayPal Holdings, Inc. | | | Automatic Data Processing | Mastercard Incorporated | Qualcomm Incorporated | |
COMPENSATION COMPETITIVE ANALYSIS
| | Percentile | Revenue ($M)(1) | Market Capitalization ($M)(1) | | | 25th | $21,043 | $127,599 | | Fiscal 2023 Peer Group | Median | $28,011 | $205,780 | | | 75th | $42,365 | $228,271 | | Broadcom | | $29,994(2) | $225,679 | | | Rank | 60% | 64% |
ELEMENTS OF FISCAL 2023 EXECUTIVE COMPENSATION PROGRAM
| • | an annual cash incentive bonus plan; |
ELEMENTS OF FISCAL 2023 EXECUTIVE COMPENSATION PROGRAM
| • | LTI compensation in the form of RSU and PSU awards; |
ELEMENTS OF FISCAL 2023 EXECUTIVE COMPENSATION PROGRAM
| • | severance and change in control payments and benefits; and |
Annual Cash Incentive Bonus Plan
Annual Cash Incentive Bonus Plan The Compensation Committee believes that a significant portion of our executive officers’ target total compensation should be dependent upon Broadcom’s performance. Our executive officers are eligible to earn an annual cash incentive bonus under our APB Plan. The APB Plan is designed to encourage and motivate our executive officers to achieve our overall corporate financial goals for the fiscal year, as well as divisional goals where appropriate, and to drive positive contributions to Broadcom’s growth and performance. Each executive officer is annually assigned a specified target annual cash incentive opportunity under the APB Plan, expressed as a percentage of the executive officer’s base salary. The Compensation Committee considers compensation peer group and market data in determining an executive officer’s target annual cash incentive opportunity. In the case of our CEO, the Compensation Committee provides the data in its recommendation to the independent directors. The target annual cash incentive opportunity for our NEOs (excluding our CEO) did not change in fiscal 2023, compared to fiscal 2022. As discussed below under “Equity Award Granted in Fiscal 2023 to Mr. Tan and Dr. Kawwas,” the PSU award granted to our CEO in fiscal 2023 is intended to replace all of our CEO’s incentive compensation through fiscal 2027. As such, our CEO did not receive an APB Plan payout in fiscal 2023 and the independent directors do not intend to provide our CEO with an annual cash incentive opportunity through fiscal 2027.
Annual Cash Incentive Bonus Plan
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Annual Cash Incentive Bonus Plan
| NEO | Fiscal 2023 APB Plan Target Bonus (as a % of eligible earnings) | Change in Fiscal 2023 | | Hock E. Tan | 0% | (100)% | | Kirsten M. Spears | 100% | 0% | | Mark D. Brazeal | 100% | 0% | | Charlie B. Kawwas, Ph.D. | 100% | 0% |
Fiscal 2023 APB Plan Payout Amounts
Fiscal 2023 APB Plan Payout Amounts The final attainment under our fiscal 2023 APB Plan is set forth in the table below.
Fiscal 2023 APB Plan Payout Amounts
| NEO(1) | Base Salary | Bonus Target | Corporate & Division Goals | | | Individual Multiplier | Bonus Payout | | | | | Revenue | Adjusted Non- GAAP Operating Margin | Division | | | | Kirsten M. Spears | $412,000 | 100% | 95% | 86% | 112% | 120% | $500,275 (121% of Target) | | | | | Total Corporate & Division: 101% | | | | | | Mark D. Brazeal | $515,000 | 100% | 95% | 86% | 120% | 120% | $649,984 (126% of Target) | | | | | Total Corporate & Division: 105% | | | | | | Charlie B. Kawwas, Ph.D. | $721,000 | 100% | 95% | 86% | — | 120% | $781,715 (108% of Target) | | | | | Total Corporate: 90% | | | | |
Fiscal 2023 APB Plan Payout Amounts
| (1) Mr. Tan did not receive an APB Plan payout in fiscal 2023 as his fiscal 2023 PSU award was front-loaded to cover five annual cash incentive payouts under the APB Plan and five years of annual equity awards. The independent directors do not intend to provide Mr. Tan with annual cash incentive payouts under the APB Plan through fiscal 2027. |
Fiscal 2023 APB Plan Payout Amounts
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Long-Term Incentive Compensation
Long-Term Incentive Compensation Our equity awards serve as a long-term reward and retention tool for our executive officers and are intended to reflect market practice and the value we place on their contribution to Broadcom. In addition, our equity awards provide our executive officers with a strong incentive to remain with and build value in Broadcom over an extended period. The Compensation Committee believes that granting RSU and PSU awards furthers the objectives of our compensation philosophy by motivating strategic financial performance improvement and maximizing our stock price and total stockholder return. By doing so, the interests of our executive officers are closely aligned with our stockholders’ interests. The Compensation Committee has historically granted equity awards under our annual equity program to our executive officers (other than our CEO) in March of each year, with 50% in the form of RSU awards and 50% in the form of PSU awards at target. Following our Board’s review of our compensation strategy and leadership planning, the independent directors granted Mr. Tan and the Compensation Committee granted Dr. Kawwas equity awards at the start of fiscal 2023, as further described below. The Compensation Committee granted equity awards to Ms. Spears and Mr. Brazeal under our annual equity program in March 2023 as further described below.
Equity Award Granted in Fiscal 2023 to Mr. Tan and Dr. Kawwas
Equity Award Granted in Fiscal 2023 to Mr. Tan and Dr. Kawwas
Equity Award Granted to Mr. Tan
Equity Award Granted to Mr. Tan When determining the annual fiscal 2023 equity award incentive opportunity for Mr. Tan, the independent directors considered Mr. Tan’s leadership in increasing our TSR since our initial public offering in 2009, which continues to significantly outperform the S&P 500 as illustrated below. The independent directors also considered how Mr. Tan helped increase our market capitalization from $3.8 billion at our initial public offering in 2009 to over $191.5 billion at the end of fiscal 2022. The independent directors believe Mr. Tan has been and continues to be the main driving force behind Broadcom’s transformation from a semiconductor company into a leading infrastructure technology company that has increased TSR by over 6,100% since our initial public offering in 2009. On October 31, 2022 (the “Grant Date”), the independent directors, in consultation with Meridian, granted Mr. Tan a PSU award with the opportunity to earn up to 1,000,000 shares contingent on both achievement of formidable stock price performance hurdles and continued service requirements over a five-year vesting period (the “2023 Tan PSU Award”). The independent directors approved the 2023 Tan PSU Award to retain Mr. Tan and incentivize Mr. Tan to successfully execute our long-term growth strategy and drive substantial returns to our stockholders. The 2023 Tan PSU Award aligns Mr. Tan’s interests with those of our stockholders by shifting a significant portion of Mr. Tan’s compensation opportunity to long-term performance-based compensation and providing a significant incentive for Mr. Tan to continue to lead Broadcom and execute our long-term growth strategy, including the acquisition and integration of VMware.
Equity Award Granted to Mr. Tan
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Equity Award Granted to Mr. Tan
The grant date fair value of the maximum vesting opportunity under the 2023 Tan PSU Award was $160,540,000 (per ASC 718) and was based on the aggregate value of five annual cash incentive payouts under the APB Plan and five years of annual equity awards as discussed below.
Equity Award Granted to Dr. Kawwas
Equity Award Granted to Dr. Kawwas On the Grant Date, the Compensation Committee, in consultation with Meridian, granted Dr. Kawwas a PSU award with the opportunity to earn up to 300,000 shares with vesting terms similar to the 2023 Tan PSU Award and contingent on both achievement of the same formidable stock price performance hurdles and continued service requirements over a five-year vesting period (the “2023 Kawwas PSU Award,” and together with the 2023 Tan PSU Award, the “2023 Tan/Kawwas PSU Awards”). The Compensation Committee approved the 2023 Kawwas PSU Award in recognition of Dr. Kawwas’ expanded role with his promotion as President, Semiconductor Solutions Group in July 2022 and increased responsibilities in overseeing our broad semiconductor portfolio in addition to continuing to oversee worldwide semiconductor sales and global operations, and to provide a significant incentive for Dr. Kawwas to successfully execute our long-term growth strategy. The grant date fair value of the maximum vesting opportunity under the 2023 Kawwas PSU Award was $48,162,000 (per ASC 718) and was based on the aggregate value of five years of annual equity awards as discussed below.
Equity Award Granted to Mr. Tan and Dr. Kawwas is Front-Loaded
Equity Award Granted to Mr. Tan and Dr. Kawwas is Front-Loaded When determining the maximum value of the 2023 Tan/Kawwas PSU Awards, the independent directors and the Compensation Committee considered and targeted an annual equity opportunity based on an assessment of the highly competitive landscape for executive talent with a strong track record of success among technology-focused companies and a review of compensation practices among our peer companies. The independent directors and the Compensation Committee also considered what would be an appropriate award value to effectively incentivize achievement of formidable stock price performance hurdles while keeping annual compensation opportunities consistent with the compensation peer group benchmarks. Based on these considerations and in consultation with Meridian, the independent directors determined that the annualized GAAP value of $32.1 million for Mr. Tan and the Compensation Committee determined that the annualized GAAP value of $9.6 million for Dr. Kawwas were within a competitive range comparable for similar positions at companies in our compensation peer group and/or market survey data. However, to incentivize and retain Mr. Tan and Dr. Kawwas through fiscal 2027 and in consideration of past retention success with multi-year equity awards, the independent directors front-loaded the 2023 Tan PSU Award to cover five annual cash incentive payouts under the APB Plan and five years of annual equity awards for Mr. Tan and the Compensation Committee front-loaded the 2023 Kawwas PSU Award to cover five years of annual equity awards for Dr. Kawwas as illustrated in the tables below. 2023 Tan PSU Award During the five-year vesting period, the independent directors do not intend to grant Mr. Tan annual equity awards and Mr. Tan will not be eligible to receive annual cash incentive payouts under the APB Plan because the 2023 Tan PSU Award was front-loaded.
Equity Award Granted to Mr. Tan and Dr. Kawwas is Front-Loaded
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Equity Award Granted to Mr. Tan and Dr. Kawwas is Front-Loaded
2023 Kawwas PSU Award During the five-year vesting period, the Compensation Committee does not intend to grant Dr. Kawwas annual equity awards because the 2023 Kawwas PSU Award was front-loaded.
Equity Award Granted to Mr. Tan and Dr. Kawwas Aligns with Stockholder Interests
Equity Award Granted to Mr. Tan and Dr. Kawwas Aligns with Stockholder Interests The 2023 Tan/Kawwas PSU Awards are 100% at risk and designed to further align the interests of Mr. Tan and Dr. Kawwas with those of our stockholders because the 2023 Tan/Kawwas PSU Awards incentivize sustaining significant value appreciation and retention over a five-year period. Earning Period The earning period begins after the third anniversary of the Grant Date and concludes on the fifth anniversary of the Grant Date (the “Earning Period”). Formidable Performance Hurdles The independent directors and the Compensation Committee considered various performance criteria and goals, including relative TSR, when determining the annual fiscal 2023 equity award incentive opportunity. However, because Broadcom (i) has transformed from a semiconductor company into a leading infrastructure technology company and (ii) operates in a highly competitive talent market, the independent directors and the Compensation Committee determined that formidable stock price performance hurdles would be the most effective performance measure to (x) directly tie incentives to growth in stockholder value, (y) incentivize Mr. Tan and Dr. Kawwas to successfully execute our long-term growth strategy that would position Broadcom for the next stage of sustained long-term growth and (z) retain Mr. Tan and Dr. Kawwas through fiscal 2027.
Equity Award Granted to Mr. Tan and Dr. Kawwas Aligns with Stockholder Interests
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Equity Award Granted to Mr. Tan and Dr. Kawwas Aligns with Stockholder Interests
The stock price hurdles of $825, $950 and $1,125 are significantly higher than the $470.12 closing price of Broadcom common stock on the Grant Date and the stock price levels previously achieved by Broadcom as of the Grant Date. The stock price hurdles reflect a 75.5%, 102.1% and 139.3% increase to the $470.12 closing price of Broadcom common stock over a five-year period. The shares under the 2023 Tan/Kawwas PSU Awards can be earned only during the Earning Period if (i) the average closing price of Broadcom common stock over consecutive 20-trading days (the “Average Stock Price”) is equal to or exceeds the stock price hurdles ($825, $950 and $1,125) during the Earning Period and (ii) there is no Termination of Services (defined below), except as otherwise set forth below and in the PSU agreements. One-third of the 1,000,000 shares under the 2023 Tan PSU Award and one-third of the 300,000 shares under the 2023 Kawwas PSU Award will be earned for each stock price hurdle attained during the Earning Period, with no interpolation between the price hurdles. Any shares earned during the Earning Period but prior to the fifth anniversary of the Grant Date will be subject to continued vesting through the fifth anniversary of the Grant Date contingent on Mr. Tan’s and Dr. Kawwas’ continued employment on such vesting date, except as otherwise set forth below and in the PSU agreements. If the Average Stock Price does not equal or exceed $825 during the Earning Period, the 2023 Tan/Kawwas PSU Awards will be forfeited in full and cancelled on the fifth anniversary of the Grant Date. If prior to the Earning Period, Mr. Tan or Dr. Kawwas incurs a termination of employment, consultancy or Board membership (the “Termination of Services”) (i) for Good Reason (as defined in Mr. Tan’s and Dr. Kawwas’ severance benefit agreement), (ii) by Broadcom without Cause (as defined in Mr. Tan’s and Dr. Kawwas’ severance benefit agreement) or (iii) due to death or Permanent Disability (as defined in the PSU agreements) (each, a “Covered Termination”), the Average Stock Price will be subject to a compound annual growth rate (CAGR) calculation. For the shares to be issuable, the calculated CAGR must equal or exceed 11.9%, 15.1% or 19.1% (the “CAGR Milestones”), and the payout will be prorated. If during the Earning Period, Mr. Tan or Dr. Kawwas incurs a Covered Termination or, in the case of Mr. Tan, retirement, the Earning Period will end and the Average Stock Price will be determined; provided, however, in the event of retirement, the payout will be prorated.
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal The Compensation Committee has not granted regular annual equity awards to Ms. Spears or Mr. Brazeal since granting them multi-year equity awards in January 2019 (the “2019 Multi-Year Equity Awards”). See the “Compensation Discussion and Analysis — Elements of Executive Compensation — Long-Term Incentive Compensation” in our Proxy Statement filed with the SEC on February 18, 2020 for a detailed discussion of the 2019 Multi-Year Equity Awards. In March 2022, the last tranche of the 2019 Multi-Year Equity Awards started to vest and as such, the Compensation Committee, following a review of the annual equity award incentive opportunity for Ms. Spears and Mr. Brazeal, granted Ms. Spears and Mr. Brazeal annual equity awards in fiscal 2023 (the “2023 Spears/Brazeal Awards”). Fifty percent of the 2023 Spears/Brazeal Awards are in the form of a service-based RSU award and 50% are in the form of a PSU award, assuming target performance. The grant date for the 2023 Spears/Brazeal Awards was March 15, 2023. The 2023 Spears/Brazeal Awards will vest on the same basis as two annual equity awards with staggered vesting start dates of March 15, 2023 and March 15, 2024. Each award will vest as to 25% of the shares underlying such award on each annual anniversary of the applicable vesting start date, subject to continued employment on the relevant vesting date and, with respect to the PSU awards, attainment of the applicable performance criteria. To continue to closely align Ms. Spears’ and Mr. Brazeal’s interests with those of our stockholders, each PSU award may be earned, if at all, based on our TSR performance compared to the S&P 500 (“Relative TSR”) and absolute TSR performance, over four overlapping performance periods, commencing on March 2nd immediately preceding the applicable March 15th vesting start date and ending on March 1st of the first, second, third and fourth years following the performance period commencement date. The number of shares that may be earned is capped at 25% of the target number of shares subject to the applicable PSU award for each of the first three performance periods. In the aggregate, up to 200% of the total target number of shares subject to the applicable PSU award may be earned, if at the end of the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 and our absolute TSR is not negative. Within 60 days after the end of each performance period, the Compensation Committee will determine the number of shares earned based on our Relative TSR over the performance period expressed as a percentile as follows:
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
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Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
| • | Relative TSR less than the 25th percentile, no shares will be earned for that performance period. |
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
| • | Relative TSR at the 25th percentile, 50% of the target number of shares subject to that performance period will be earned. |
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
| • | Relative TSR at the 50th percentile, 100% of the target number of shares subject to that performance period will be earned. |
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
| • | For the fourth performance period: |
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
| • | Relative TSR greater than 50th but less than 75th percentile, between 100% and 200% of the total number of the target shares subject to the award will be earned. |
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
| • | Relative TSR at or greater than 75th percentile, 200% of the total number of the target shares subject to the award will be earned. |
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
| • | In the aggregate, the maximum payout over four years is 200% of the total target number of shares. |
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
| • | If our absolute TSR for the fourth performance period is negative, maximum payout over four years is 100% of the total target number of shares. |
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
| • | If the Relative TSR is between two of the percentile levels, the number of shares earned will be determined using linear interpolation. |
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
The number of shares earned will be determined by multiplying the target number of shares subject to the performance period (25% of the total target number of shares) by an achievement factor (the “Achievement Factor”). The Achievement Factor is based on our Relative TSR for the performance period. For the fourth performance period, the Achievement Factor is based on our Relative TSR, as well as the sum of the Achievement Factors for the first three performance periods (the “Prior Achievement Sum”). However, if our absolute TSR is negative for the fourth performance period, then the maximum number of shares that may be earned is 100% of the total target number of shares.
Equity Awards Granted in Fiscal 2023 to Ms. Spears and Mr. Brazeal
| Relative TSR | Achievement Factor | | Performance Periods 1, 2 and 3 | | | At the 50th Percentile of the S&P 500 | 1 | | At the 25th Percentile of the S&P 500 | 0.5 | | Below the 25th Percentile of the S&P 500 | 0 | | Performance Period 4 | | | At the 75th Percentile of the S&P 500 | Absolute TSR Negative = 4 less the Prior Achievement Sum Absolute TSR Neutral or Positive = 8 less the Prior Achievement Sum (not to exceed, in aggregate, 200% of the target number of shares) | | At the 50th Percentile of the S&P 500 | 4 less the Prior Achievement Sum | | At the 25th Percentile of the S&P 500 | Prior Achievement Sum greater than or equal to 1.5 = 0.5 Prior Achievement Sum less than 1.5 = 2 less the Prior Achievement Sum | | Below the 25th Percentile of the S&P 500 | 0 |
PSU Awards Earned in 2022 – 2023 Performance Period
PSU Awards Earned in 2022 – 2023 Performance Period The PSU awards granted to our NEOs (other than our CEO) in fiscal 2019, 2021, 2022 and 2023 are generally subject to four overlapping performance periods. The PSU awards granted to Mr. Tan and Dr. Kawwas in fiscal 2021 were subject to a three year performance period as further described below. Following completion of each performance period the Compensation Committee confirms the Relative TSR attained and the shares earned under the applicable PSU award.
PSU Awards Earned in 2022 – 2023 Performance Period
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2019 PSU Awards
2019 PSU Awards The 2019 Multi-Year Awards that commenced vesting in fiscal 2019 were subject to four overlapping performance periods ending on each March 1st of 2020, 2021, 2022 and 2023. The table below sets forth the Relative TSR attainment and the number of shares earned for the completed performance period, as confirmed by the Compensation Committee. As our Relative TSR was greater than the 75th percentile and our absolute TSR was positive for the fourth performance period, the NEOs earned 200% of the aggregate target shares subject to the PSU award.
2019 PSU Awards
| Performance Period | % of Target Shares Earned | Number of Shares Earned | | | Relative TSR Performance Over Period | | | | | | | | Kirsten M. Spears | Mark D. Brazeal | Charlie B. Kawwas, Ph.D. | 2019 | 2020 | 2021 | 2022 | 2023 | | 1 | 95.67% | 1,495 shares | 1,795 shares | 2,394 shares | | 48th Percentile | | | | | 2 | 100% | 1,562 shares | 1,875 shares | 2,500 shares | | | 90th Percentile | | | | 3 | 100% | 1,562 shares | 1,875 shares | 2,500 shares | | | | 90th Percentile | | | 4 | 200% | 7,881 shares | 9,455 shares | 12,606 shares | | | | | 91st Percentile |
2019 PSU Awards
The 2019 Multi-Year Awards that commenced vesting in fiscal 2020 are subject to four overlapping performance periods ending on each March 1st of 2021, 2022, 2023 and 2024. The table below sets forth the Relative TSR attainment and the number of shares earned for the completed performance period, as confirmed by the Compensation Committee.
2019 PSU Awards
| Performance Period | % of Target Shares Earned | Number of Shares Earned | | | Relative TSR Performance Over Period | | | | | | | Kirsten M. Spears | Mark D. Brazeal | Charlie B. Kawwas, Ph.D. | 2020 | 2021 | 2022 | 2023 | | 1 | 100% | 1,562 shares | 1,875 shares | 2,500 shares | | 92nd Percentile | | | | 2 | 100% | 1,562 shares | 1,875 shares | 2,500 shares | | | 93rd Percentile | | | 3 | 100% | 1,562 shares | 1,875 shares | 2,500 shares | | | | 91st Percentile |
2019 PSU Awards
The 2019 Multi-Year Awards that commenced vesting in fiscal 2021 are subject to four overlapping performance periods ending on each March 1st of 2022, 2023, 2024 and 2025. The table below sets forth the Relative TSR attainment and the number of shares earned for the completed performance period, as confirmed by the Compensation Committee.
2019 PSU Awards
| Performance Period | % of Target Shares Earned | Number of Shares Earned | | | Relative TSR Performance Over Period | | | | | | Kirsten M. Spears | Mark D. Brazeal | Charlie B. Kawwas, Ph.D. | 2021 | 2022 | 2023 | | 1 | 100% | 1,562 shares | 1,875 shares | 2,500 shares | | 69th Percentile | | | 2 | 100% | 1,562 shares | 1,875 shares | 2,500 shares | | | 74th Percentile |
2019 PSU Awards
The 2019 Multi-Year Awards that commenced vesting in fiscal 2022 are subject to four overlapping performance periods ending on each March 1st of 2023, 2024, 2025 and 2026. The table below sets forth the Relative TSR attainment and the number of shares earned for the completed performance period, as confirmed by the Compensation Committee.
2019 PSU Awards
| Performance Period | % of Target Shares Earned | Number of Shares Earned | | | Relative TSR Performance Over Period | | | | | Kirsten M. Spears | Mark D. Brazeal | Charlie B. Kawwas, Ph.D. | 2022 | 2023 | | 1 | 100% | 1,562 shares | 1,875 shares | 2,500 shares | | 61st Percentile |
2019 PSU Awards
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Spears Promotion PSU Award
Spears Promotion PSU Award The promotion PSU award granted to Ms. Spears in December 2020 is subject to four overlapping performance periods ending on each March 1st of 2021, 2022, 2023 and 2024 and vest, to the extent earned, on the anniversary of the grant date, subject to Ms. Spears’ continued employment on the vesting date. The table below sets forth the Relative TSR attainment and the number of shares earned for the completed performance period, as confirmed by the Compensation Committee. The shares earned for the third performance period ending March 1, 2023 vested on December 15, 2023.
Spears Promotion PSU Award
| Performance Period | % of Target Shares Earned | Number of Shares Earned | Relative TSR Performance Over Period | | | | | | | Kirsten M. Spears | 2020 | 2021 | 2022 | 2023 | | 1 | 100% | 3,250 shares | | 92nd Percentile | | | | 2 | 100% | 3,250 shares | | | 93rd Percentile | | | 3 | 100% | 3,250 shares | | | | 91st Percentile |
Mr. Tan and Dr. Kawwas PSU Award
Mr. Tan and Dr. Kawwas PSU Award The PSU awards granted to Mr. Tan and Dr. Kawwas in April 2021 were subject to a performance period beginning on November 2, 2020 and ending on October 29, 2023. The table below sets forth the Relative TSR attainment and the number of shares earned for the completed performance period, as confirmed by the Compensation Committee. Our absolute TSR was positive over the performance period.
Mr. Tan and Dr. Kawwas PSU Award
| Performance Period | % of Target Shares Earned | Number of Shares Earned | | Relative TSR Performance Over Period | | | | | | | Hock E. Tan | Charlie B. Kawwas, Ph.D. | 2020 | 2021 | 2022 | 2023 | | 2020 – 2023 | 300% (Tan) | 179,400 shares | 35,880 shares | | | | 93rd Percentile | | | 200% (Kawwas) | | | | | | |
Brazeal Promotion PSU Award
Brazeal Promotion PSU Award The promotion PSU award granted to Mr. Brazeal in December 2021 is subject to four overlapping performance periods ending on each March 1st of 2022, 2023, 2024 and 2025 and vest, to the extent earned, on the anniversary of the grant date, subject to Mr. Brazeal’s continued employment on the vesting date. The table below sets forth the Relative TSR attainment and the number of shares earned for the completed performance period, as confirmed by the Compensation Committee. The shares earned for the second performance period ending March 1, 2023 vested on December 15, 2023.
Brazeal Promotion PSU Award
| Performance Period | % of Target Shares Earned | Number of Shares Earned | Relative TSR Performance Over Period | | | | | | Mark D. Brazeal | 2021 | 2022 | 2023 | | 1 | 100% | 2,000 shares | | 69th Percentile | | | 2 | 100% | 2,000 shares | | | 74th Percentile |
Brazeal Promotion PSU Award
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Severance and Change in Control Benefits
Severance and Change in Control Benefits The Compensation Committee believes that severance and change in control arrangements are important components of the overall executive compensation program for our NEOs. Severance arrangements provide a stable work environment and are used primarily to attract and retain individuals with the requisite experience and ability to drive our success. Change in control provisions help to secure the continued employment and dedication of our NEOs, to reduce any concern that they might have regarding their own continued employment prior to or following a change in control of Broadcom and to promote continuity of management during a corporate transaction. Each of our NEOs is eligible for severance and change in control payments and benefits under their respective severance benefit agreement, including vesting acceleration of the equity awards following a Covered Termination (as defined below under “Executive Compensation — Severance Benefits Agreements; Death and Permanent Disability Policies; Retirement”) in connection with a change in control, which is commonly referred to as a “double trigger” provision. The Compensation Committee provides such payments and benefits to our NEOs based on its review of severance practices at the companies in our compensation peer group and as the result of arms’ length negotiations at the time our NEOs commence employment with Broadcom, when they are requested to take on additional responsibilities, or from time to time if deemed necessary or desirable to achieve parity with other NEOs or otherwise. Further, we believe our double trigger change in control arrangements protect stockholder value by allowing us the opportunity to deliver a motivated management team to any potential acquirer. If we did not offer such change in control arrangements, our NEOs could be less motivated to pursue a potential acquisition even if such a transaction would benefit our stockholders, due to the possibility that they would lose the potential value of their unvested equity compensation upon an acquisition. For a summary of the material terms and conditions of these arrangements, as well as an estimate of the post-employment payments and benefits that our NEOs are eligible to receive, see “Executive Compensation — Severance Benefits Agreements; Death and Permanent Disability Policies; Retirement” below.
Severance and Change in Control Benefits
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Severance and Change in Control Benefits
COMPENSATION COMMITTEE REPORT The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis section included in this Proxy Statement, as required by Item 402(b) of Regulation S-K. Based upon such review and related discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement for the Annual Meeting and Broadcom’s Annual Report on Form 10-K for fiscal 2023. COMPENSATION COMMITTEE Harry L. You, Chair Diane M. Bryant Eddy W. Hartenstein Check Kian Low
Severance and Change in Control Benefits
| 48 | |
Severance and Change in Control Benefits
EXECUTIVE COMPENSATION
FISCAL 2023 SUMMARY COMPENSATION TABLE
FISCAL 2023 SUMMARY COMPENSATION TABLE The following table sets forth information about compensation awarded to, paid to or earned by our NEOs during fiscal 2023, 2022 and 2021.
FISCAL 2023 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Fiscal Year | Salary ($) | Stock Awards(1) ($) | Non-Equity Incentive Plan Compensation(2) ($) | All Other Compensation ($) | Total ($) | | Hock E. Tan President and Chief Executive Officer | 2023 | $1,200,000 | $160,540,000(3) | $—(4) | $86,161(5) | $161,826,161 | | | 2022 | 1,200,000 | 53,913,448 | 5,400,000 | 93,523 | 60,606,971 | | | 2021 | 1,200,000 | 54,056,808 | 5,400,000 | 46,819 | 60,703,627 | | Kirsten M. Spears Chief Financial Officer and Chief Accounting Officer | 2023 | 412,000 | 14,310,050 | 500,275 | 19,800(6) | 15,242,125 | | | 2022 | 403,969 | — | 641,854 | 18,300 | 1,064,124 | | | 2021 | 392,781 | 13,451,047 | 584,233 | 17,596 | 14,445,657 | | Mark D. Brazeal Chief Legal and Corporate Affairs Officer | 2023 | 515,000 | 14,310,050 | 649,984 | 19,800(6) | 15,494,834 | | | 2022 | 504,962 | 12,474,520 | 885,701 | 18,300 | 13,883,483 | | | 2021 | 500,000 | — | 818,750 | 17,400 | 1,336,150 | | Charlie B. Kawwas, Ph.D. President, Semiconductor Solutions Group | 2023 | 721,000 | 48,162,000(7) | 781,715 | 19,800(6) | 49,684,515 | | | 2022 | 706,946 | — | 1,589,720 | 18,300 | 2,314,967 | | | 2021 | 678,462 | 20,115,046 | 1,517,885 | 17,400 | 22,328,793 |
FISCAL 2023 SUMMARY COMPENSATION TABLE
| (1) Represents the grant date fair value of RSU and PSU awards, determined in accordance with ASC 718. The maximum grant date fair values for the PSU awards do not differ from the fair values presented in this table. The amounts in this column do not reflect compensation actually received by the NEOs or the actual value that may be recognized by the NEOs. For a discussion of the valuation assumptions used in the calculations, see Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of our 2023 Annual Report filed with the SEC on December 14, 2023. For Ms. Spears and Mr. Brazeal, although the 2023 Spears/Brazeal Awards have two staggered vesting start dates of March 15, 2023 and 2024, under ASC 718 we are required to include the grant date fair value of all the 2023 Spears/Brazeal Awards in fiscal 2023. |
FISCAL 2023 SUMMARY COMPENSATION TABLE
| (2) Represents amounts paid under the APB Plan for each fiscal year. More information about the determination of the amounts paid is provided above in “Compensation Discussion and Analysis — Elements of Fiscal 2023 Executive Compensation Program — Annual Cash Incentive Bonus Plan.” |
FISCAL 2023 SUMMARY COMPENSATION TABLE
| (3) Represents the grant date fair value of the maximum vesting opportunity under the 2023 Tan PSU Award that was front-loaded to cover five annual cash incentive payouts under the APB Plan and five years of annual equity awards. During the five-year vesting period, the independent directors do not intend to grant Mr. Tan annual equity awards and Mr. Tan will not be eligible to receive annual cash incentive payouts under the APB Plan because the 2023 Tan PSU Award was front-loaded. The target annualized amount is provided below in the “Supplemental Fiscal 2023 Summary Compensation Table.” |
FISCAL 2023 SUMMARY COMPENSATION TABLE
| (4) Mr. Tan did not receive an APB Plan payout in fiscal 2023 as his 2023 Tan PSU Award was front-loaded to cover five annual cash incentive payouts under the APB Plan and five years of annual equity awards. |
FISCAL 2023 SUMMARY COMPENSATION TABLE
| (5) Represents $5,301 in expense reimbursements for travel to Mr. Tan’s residence in Pennsylvania, $19,800 401(k) plan employer matching contribution and $61,060 for car service. |
FISCAL 2023 SUMMARY COMPENSATION TABLE
| (6) Represents 401(k) plan employer matching contributions. |
FISCAL 2023 SUMMARY COMPENSATION TABLE
| (7) Represents the grant date fair value of the maximum vesting opportunity under the 2023 Kawwas PSU Award that was front-loaded to cover five years of annual equity awards. During the five-year vesting period, the Compensation Committee does not intend to grant Dr. Kawwas annual equity awards because the 2023 Kawwas PSU Award was front-loaded. The target annualized amount is provided below in the “Supplemental Fiscal 2023 Summary Compensation Table.” |
FISCAL 2023 SUMMARY COMPENSATION TABLE
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SUPPLEMENTAL FISCAL 2023 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Fiscal Year | Salary ($) | Stock Awards(1) ($) | Non-Equity Incentive Plan Compensation(2) ($) | All Other Compensation ($) | Total ($) | | Hock E. Tan President and Chief Executive Officer | 2023 | $1,200,000 | $32,108,000 | $—(3) | $86,161(4) | $33,394,161 | | Charlie B. Kawwas, Ph.D. President, Semiconductor Solutions Group | 2023 | 721,000 | 9,632,400 | 781,715 | 19,800(5) | 11,154,915 |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(2) (#) | Grant Date Fair Value of Stock Awards(3) ($) | | Name | Grant Date | Vesting Start Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Hock E. Tan | APB Plan | | $— | $— | $— | | | | | | | | 10/31/22 | 10/31/22 | | | | 333,333(4) | 666,667(4) | 1,000,000(4) | | $160,540,000 | | Kirsten M. Spears | APB Plan | | 25,750 | 412,000 | 834,300 | | | | | | | | 03/15/23 | 03/15/23 | | | | 625(5) | 5,000(5) | 10,000(5) | | 4,584,500 | | | 03/15/23 | 03/15/24 | | | | 625(5) | 5,000(5) | 10,000(5) | | 3,983,300 | | | 03/15/23 | 03/15/23 | | | | | | | 5,000(6) | 2,912,450 | | | 03/15/23 | 03/15/24 | | | | | | | 5,000(6) | 2,829,800 | | Mark D. Brazeal | APB Plan | | 32,187 | 515,000 | 1,042,875 | | | | | | | | 03/15/23 | 03/15/23 | | | | 625(5) | 5,000(5) | 10,000(5) | | 4,584,500 | | | 03/15/23 | 03/15/24 | | | | 625(5) | 5,000(5) | 10,000(5) | | 3,983,300 | | | 03/15/23 | 03/15/23 | | | | | | | 5,000(6) | 2,912,450 | | | 03/15/23 | 03/15/24 | | | | | | | 5,000(6) | 2,829,800 | | Charlie B. Kawwas, Ph.D. | APB Plan | | 90,125 | 721,000 | 1,622,250 | | | | | | | | 10/31/22 | 10/31/22 | | | | 100,000(4) | 200,000(4) | 300,000(4) | | 48,162,000 |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE
| (1) Represents potential payouts under the APB Plan for fiscal 2023. Target bonus amounts were 100% as a percentage of eligible earnings for each of Ms. Spears, Mr. Brazeal and Dr. Kawwas. The threshold amount for Dr. Kawwas was 12.5% of his target bonus amounts, calculated based on the achievement of a single corporate financial goal at 50% of target and an individual performance multiplier of 50%. The threshold amount for each of Ms. Spears and Mr. Brazeal was 6.25% of their respective target bonus amounts, calculated based on the achievement of a single corporate financial goal or the division financial and strategic goals at 25% of target and an individual performance multiplier of 50%. The maximum amount for Dr. Kawwas was 225% of target, which assumes maximum (150%) performance for each corporate financial goal and an individual performance multiplier of 150%. The maximum amount for each of Ms. Spears and Mr. Brazeal was 202.5% of target, which assumes maximum (150%) performance for each corporate financial goal, maximum (120%) performance for their division financial and strategic goals and an individual performance multiplier of 150%. |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE
| (2) All equity awards were granted under the 2012 Stock Incentive Plan (the “2012 Plan”). |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE
| (3) Represents the grant date fair value of the equity awards, as determined in accordance with ASC 718. The maximum grant date fair values for the PSU awards do not differ from the fair values presented in this table. For a discussion of the valuation assumptions used in the calculations, see Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of our 2023 Annual Report filed with the SEC on December 14, 2023. |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE
| (4) Represents the 2023 Tan/Kawwas PSU Award with vesting contingent on both achievement of stock price hurdles (the “Price Hurdles”) and the NEO’s continued employment on the vesting date of October 31, 2027 (the “Vesting Date”). No portion of the PSU award will be earned unless the Average Stock Price meets or exceeds the Price Hurdles during the Earning Period. One-third of shares will be earned for achieving each Price Hurdle during the Earning Period, with no interpolation between Price Hurdles. Any shares earned during the Earning Period but prior to the Vesting Date will be subject to the NEO’s continued employment on the Vesting Date. If the lowest Price Hurdle is not met on or prior to the Vesting Date, the PSU award will be cancelled. |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE
| (5) Represents the 2023 Spears/Brazeal Awards, which will vest at a rate of 25% per year on each anniversary of the applicable vesting start date, subject to the NEO’s continued employment on the relevant vesting date and the achievement of specified performance goals over each performance period, as determined by the Compensation Committee within 60 days following the end of each performance period. The 2023 Spears/Brazeal Awards have staggered vesting start dates of March 15, 2023 and March 15, 2024. The performance criteria is based on our Relative TSR over four overlapping performance periods beginning on the March 2nd immediately prior to the applicable vesting start date and ending on March 1st of the first, second, third and fourth years following the performance period commencement date. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares for each PSU award, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 and our absolute TSR is not negative. If the minimum performance criteria is not met, no shares will be issued and the PSU award will be cancelled. |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE
| (6) Represents the 2023 Spears/Brazeal Awards, which vest at a rate of 25% per year on each anniversary of the applicable vesting start date, subject to the NEO’s continued employment on the relevant vesting date. |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS TABLE
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FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| | | Stock Awards(1) | | | | Multi- Year Equity Award Vest Start Date | | Name | Grant Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested(2) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights that Have Not Vested(2) ($) | | | Hock E. Tan | 11/01/21 | — | $— | 147,711(3) | $123,834,994 | | | | 10/31/22 | — | — | 666,667(4) | 558,906,946 | | | Kirsten M. Spears | 01/15/19 | 1,562(5) | 1,309,518 | 7,814(6) | 6,550,945 | 03/15/20 | | | 01/15/19 | 3,124(5) | 2,619,037 | 9,376(7) | 7,860,463 | 03/15/21 | | | 01/15/19 | 4,687(5) | 3,929,393 | 10,938(8) | 9,169,982 | 03/15/22 | | | 12/15/20 | 6,500(9) | 5,449,340 | 16,250(10) | 13,623,350 | | | | 12/15/20 | 3,250(11) | 2,724,670 | | | | | | 03/15/23 | 5,000(12) | 4,191,800 | 10,000(13) | 8,383,600 | 03/15/23 | | | 03/15/23 | 5,000(12) | 4,191,800 | 10,000(13) | 8,383,600 | 03/15/24 | | Mark D. Brazeal | 01/15/19 | 1,875(5) | 1,571,925 | 9,375(6) | 7,859,625 | 03/15/20 | | | 01/15/19 | 3,750(5) | 3,143,850 | 11,250(7) | 9,431,550 | 03/15/21 | | | 01/15/19 | 5,625(5) | 4,715,775 | 13,125(8) | 11,003,475 | 03/15/22 | | | 12/15/21 | 6,000(14) | 5,030,160 | 12,000(15) | 10,060,320 | | | | 12/15/21 | 2,000(16) | 1,676,720 | | | | | | 03/15/23 | 5,000(12) | 4,191,800 | 10,000(13) | 8,383,600 | 03/15/23 | | | 03/15/23 | 5,000(12) | 4,191,800 | 10,000(13) | 8,383,600 | 03/15/24 | | Charlie B. Kawwas, Ph.D. | 01/15/19 | 2,500(5) | 2,095,900 | 12,500(6) | 10,479,500 | 03/15/20 | | | 01/15/19 | 5,000(5) | 4,191,800 | 15,000(7) | 12,575,400 | 03/15/21 | | | 01/15/19 | 7,500(5) | 6,287,700 | 17,500(8) | 14,671,300 | 03/15/22 | | | 04/05/21 | 5,980(17) | 5,013,393 | | | | | | 10/31/22 | — | — | 200,000(4) | 167,672,000 | |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (1) The awards shown in these columns are awards granted under the Avago Technologies Limited 2009 Equity Incentive Plan (the “Avago Plan”) unless otherwise noted. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (2) The amounts shown in this column represent the number of unvested shares multiplied by $838.36, the closing price of Broadcom common stock on October 27, 2023 (the last trading day of fiscal 2023). |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (3) Represents a PSU award granted under the 2012 Plan based on attainment of the maximum performance level as performance through October 29, 2023 was tracking above target. The PSU award is earned based on our Relative TSR and absolute TSR performance measured over the period of November 1, 2021 through November 3, 2024, as determined by the independent directors and subject to Mr. Tan’s continued employment on the vesting date of November 3, 2024. In the aggregate, Mr. Tan may earn up to 300% of the target number of shares if our Relative TSR is at or above the 75th percentile of the S&P 500 and our absolute TSR is not negative, provided that no shares will be earned if our Relative TSR is not at or above the 25th percentile of the S&P 500. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (4) Represents the 2023 Tan/Kawwas PSU Award granted under the 2012 Plan based on attainment of the target performance level as performance through October 29, 2023 was tracking between threshold and target. Vesting is contingent on both achievement of Price Hurdles and the NEO’s continued employment on the Vesting Date. No portion of the PSU award will be earned unless the Average Stock Price meets or exceeds the Price Hurdles during the Earning Period. One-third of shares will be earned for achieving each Price Hurdle during the Earning Period, with no interpolation between Price Hurdles. Any shares earned during the Earning Period but prior to the Vesting Date will be subject to the NEO’s continued employment on the Vesting Date. If the lowest Price Hurdle is not met on or prior to the Vesting Date, the PSU award will be cancelled. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (5) Represents a RSU award under the 2019 Multi-Year Awards that will vest as to 25% on each anniversary of the applicable vesting start date, subject to the NEO’s continued employment on the applicable vesting date. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (6) Represents a PSU award under the 2019 Multi-Year Awards based on attainment of the maximum performance level as performance through October 29, 2023 was tracking at above target. The PSU award will vest as to 25% of the target number of shares on each anniversary of March 15, 2020, subject to the NEO’s continued employment on the applicable vesting date and achievement of specified performance goals based on our Relative TSR over four performance periods beginning on March 2, 2020 and ending on each of March 1 of 2021, 2022, 2023 and 2024, as determined by the Compensation Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| 52 | |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
percentile of the S&P 500 and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500. Our Relative TSR for the first, second and third performance periods was at the 92nd, 93rd and 91st percentile, respectively, and, as a result, 25% of the PSU award was earned in each of fiscal 2021, 2022, and 2023.
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (7) Represents a PSU award under the 2019 Multi-Year Awards based on attainment of the maximum performance level as performance through October 29, 2023 was tracking at above target. The PSU award will vest as to 25% of the target number of shares on each anniversary of March 15, 2021, subject to the NEO’s continued employment on the applicable vesting date and achievement of specified performance goals based on our Relative TSR over four performance periods beginning on March 2, 2021 and ending on each of March 1 of 2022, 2023, 2024 and 2025, as determined by the Compensation Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500. Our Relative TSR for the first and second performance periods was at the 69th and 74th percentile, respectively, and, as a result, 25% of the PSU award was earned in each of fiscal 2022 and 2023. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (8) Represents a PSU award under the 2019 Multi-Year Awards based on attainment of the maximum performance level as performance through October 29, 2023 was tracking at above target. The PSU award will vest as to 25% of the target number of shares on each anniversary of March 15, 2022, subject to the NEO’s continued employment on the applicable vesting date and achievement of specified performance goals based on our Relative TSR over four performance periods beginning on March 2, 2022 and ending on each of March 1 of 2023, 2024, 2025 and 2026, as determined by the Compensation Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500. Our Relative TSR for the first performance period was at the 61st percentile and, as a result, 25% of the PSU award was earned in fiscal 2023. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (9) Represents a RSU award granted under the LSI Corporation 2003 Equity Incentive Plan (the “LSI Plan”) that vests as to 25% on each anniversary of the grant date, subject to Ms. Spears’ continued employment on the applicable vesting date. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (10) Represents a PSU award granted under the LSI Plan based on the attainment of the maximum performance level as performance through October 29, 2023 was tracking above target. The PSU award will vest as to 25% of the target number of shares on each anniversary of December 15, 2020, subject to Ms. Spears’ continued employment on the applicable vesting date and achievement of specified performance goals based on our Relative TSR over four performance periods beginning on March 2, 2020 and ending on each of March 1 of 2021, 2022, 2023 and 2024, as determined by the Compensation Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, Ms. Spears may earn up to 200% of the target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is below the 25th percentile of the S&P 500. Our Relative TSR for the first performance period was at the 92nd percentile and, as a result, 25% (3,250 shares) of the PSU award was earned in fiscal 2021 and vested in fiscal 2022. Our Relative TSR for the second performance period was at the 93rd percentile and, as a result, 25% (3,250 shares) of the PSU award was earned in fiscal 2022 and vested in fiscal 2023. Our Relative TSR for the third performance period was at the 91st percentile and, as a result, 25% (3,250 shares) of the PSU award was earned in fiscal 2023 but remained unvested until December 15, 2023. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (11) Represent shares earned under a PSU award (referenced in footnote (10)) in fiscal 2023 that remain subject to Ms. Spears’ continued employment on December 15, 2023. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (12) Represents the 2023 Spears/Brazeal Award granted under the 2012 Plan that will vest as to 25% on each anniversary of the applicable vesting start date, subject to the NEO’s continued employment on the applicable vesting date. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (13) Represents the 2023 Spears/Brazeal Award granted under the 2012 Plan based on attainment of the maximum performance level as performance through October 29, 2023 was tracking at above target. The PSU award will vest as to 25% of the target number of shares on each anniversary of the applicable vesting start date, subject to the NEO’s continued employment on the applicable vesting date and achievement of specified performance goals, as determined by the Compensation Committee. The 2023 Spears/Brazeal Award has staggered vesting start dates of March 15, 2023 and March 15, 2024. The performance criteria is based on our Relative TSR over four overlapping performance periods beginning on March 2nd immediately prior to the application vesting start date and ending on each of March 1st of the first, second, third and fourth years following the performance period commencement date. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (14) Represents a RSU award granted under the 2012 Plan that vests as to 25% on each anniversary of the grant date, subject to Mr. Brazeal’s continued employment on the applicable vesting date. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (15) Represents a PSU award granted under the 2012 Plan based on the attainment of the maximum performance level as performance through October 29, 2023 is tracking above target. The PSU award will vest as to 25% on each anniversary of December 15, 2021, subject to Mr. Brazeal’s continued employment on the applicable vesting date and achievement of specified performance goals based on our Relative TSR over four performance periods beginning on March 2, 2021 and ending on each of March 1 of 2022, 2023, 2024 and 2025, as determined by the Compensation Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, Mr. Brazeal may earn up to 200% of the target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is below the 25th percentile of the S&P 500. Our Relative TSR for the first performance period was at the 69th percentile and, as a result, 25% (2,000 shares) of this PSU award was earned in fiscal 2022 and vested in fiscal 2023. Our Relative TSR for the second performance period was at the 74th percentile and, as a result, 25% (2,000 shares) of this PSU award was earned in fiscal 2023 but remained unvested until December 15, 2023. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
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FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (16) Represent shares earned under a PSU award (referenced in footnote (15)) in fiscal 2023 but remain subject to Mr. Brazeal’s continued employment on December 15, 2023. |
FISCAL 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (17) Represents a RSU award granted under our 2012 Plan that vest as to one-third on each anniversary of December 15, 2020, subject to Dr. Kawwas’ continued employment on the applicable vesting dates. |
FISCAL 2023 OPTION EXERCISES AND STOCK VESTED TABLE
FISCAL 2023 OPTION EXERCISES AND STOCK VESTED TABLE The following table sets forth information regarding the vesting of stock awards during fiscal 2023 for each of our NEOs. Stock award value realized is calculated by multiplying the number of shares shown in the table by the closing price of Broadcom common stock as reported on the Nasdaq Global Select Market on the date the stock awards vested. Value Realized on Vesting represents long-term gain over multiple years of service by the NEO and are not considered as part of a NEO’s fiscal 2023 compensation.
FISCAL 2023 OPTION EXERCISES AND STOCK VESTED TABLE
| Name | Stock Awards | | | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | Hock E. Tan | 198,337 | $160,212,854 | | Kirsten M. Spears | 25,317 | 15,407,195 | | Mark D. Brazeal | 26,580 | 16,367,983 | | Charlie B. Kawwas, Ph.D. | 71,966 | 52,264,757 |
FISCAL 2023 OPTION EXERCISES AND STOCK VESTED TABLE
| (1) Includes shares vested under RSU and PSU awards granted in fiscal 2019, 2020, 2021 and 2022. |
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN CONTROL
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN CONTROL The following table reflects the potential payments and benefits to which our NEOs would be entitled under their severance benefits agreements and equity award agreements in effect as of the end of fiscal 2023 in the event of a Covered Termination taking place within 12 months following a change in control of Broadcom (or in the case of Mr. Tan three months before or 12 months following a change in control of Broadcom). The amounts presented in the table assume an employment termination date and a change in control date of October 29, 2023 and that all eligibility requirements contemplated by the NEO’s respective agreements and our policies and practices, as applicable, were met.
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN CONTROL
| Name | Cash Severance Base Salary ($) | Cash Severance Bonus ($) | Health Benefits Continuation Coverage(1) ($) | Value of RSU/ PSU Acceleration(2) ($) | Total ($) | | Hock E. Tan | $2,400,000 | $— | $— | $1,112,596,778(3)(4) | $167,770,395 | | Kirsten M. Spears | 412,000 | 412,000 | 26,358 | 45,588,340 | 46,438,698 | | Mark D. Brazeal | 515,000 | 515,000 | 26,168 | 46,738,570 | 47,794,738 | | Charlie B. Kawwas, Ph.D. | 721,000 | 721,000 | 26,015 | 319,314,557(3)(4) | 320,782,572 |
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN CONTROL
| (1) Represents the cost of our subsidized continued healthcare benefits based on our current costs to provide such coverage. |
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN CONTROL
| (2) This amount includes the number of shares subject to (a) RSU awards and/or (b) PSU awards for which the performance goals have been deemed satisfied based on Broadcom’s actual performance immediately prior to October 29, 2023, in each case multiplied by $838.36, the closing price of Broadcom common stock on October 27, 2023 (the last trading day of fiscal 2023). |
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN CONTROL
| (3) This amount includes the number of shares subject to the PSU Awards that vested on October 29, 2023, multiplied by $838.36, the closing price of Broadcom common stock on October 27, 2023 (the last trading day of fiscal 2023). |
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN CONTROL
| (4) This amount includes the number of shares subject to 2023 Tan/Kawwas PSU Awards based on Broadcom’s performance through a date within 10 days prior to October 29, 2023 and, as the Earning Period has not started, the achievement of the CAGR Milestones, multiplied by $838.36, the closing price of Broadcom common stock on October 27, 2023 (the last trading day of fiscal 2023). |
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A CHANGE IN CONTROL
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POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT The following table reflects the potential payments and benefits to which our NEOs would be entitled under their severance benefits agreements in effect as of the end of fiscal 2023, in the event of a Covered Termination taking place not in connection with a change in control of Broadcom. The amounts presented in the table assume an employment termination date of October 29, 2023 and that all eligibility requirements contemplated by the NEO’s respective agreements and our policies and practices, as applicable, were met.
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT
| Name | Cash Severance Base Salary ($) | Cash Severance Bonus ($) | Health Benefits Continuation Coverage(1) ($) | Cash Payments in Exchange for Equity Cancellation ($) | Value of RSU/ PSU Acceleration ($) | Total ($) | | Hock E. Tan | $1,200,000 | $— | $— | $— | $166,570,395(3) | $167,770,395 | | Kirsten M. Spears | 309,000 | 154,500 | 13,179 | — | — | 476,679 | | Mark D. Brazeal | 386,250 | 193,125 | 13,084 | — | — | 592,459 | | Charlie B. Kawwas, Ph.D. | 540,750 | 270,375 | 13,008 | 51,039,357(2) | 49,971,286(3) | 101,834,776 |
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT
| (1) Represents the cost of the subsidized continued healthcare benefits based on the current costs to provide such coverage. |
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT
| (2) This amount includes the number of shares that would have vested under outstanding RSU and PSU awards (including shares that vested on October 29, 2023) had Dr. Kawwas remained continuously employed by Broadcom for an additional 18 months following October 29, 2023, with any applicable performance conditions deemed to have been achieved at target performance, multiplied by $838.36, the closing price of Broadcom common stock on October 27, 2023 (the last trading day of fiscal 2023). |
POTENTIAL PAYMENTS AND BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT
| (3) This amount includes the pro-rated number of shares subject to the 2023 Tan/Kawwas PSU Awards based on Broadcom’s performance through a date within 10 days prior to October 29, 2023 and, as the Earning Period has not started, the achievement of the CAGR Milestones, multiplied by $838.36, the closing price of Broadcom common stock on October 27, 2023 (the last trading day of fiscal 2023). |
POTENTIAL PAYMENTS UNDER OUR DEATH AND PERMANENT DISABILITY POLICIES
POTENTIAL PAYMENTS UNDER OUR DEATH AND PERMANENT DISABILITY POLICIES The following table reflects the additional potential payments and benefits to which our NEOs would be entitled under the Death and Permanent Disability Policies in effect as of October 29, 2023, in the event of death or permanent disability. The amounts presented in the table assume a termination of employment date of October 29, 2023 and that all eligibility requirements contemplated by the Death and Permanent Disability Policies were met.
POTENTIAL PAYMENTS UNDER OUR DEATH AND PERMANENT DISABILITY POLICIES
| Name | Value of RSU/PSU Acceleration ($)(1) | | Hock E. Tan | $358,250,510(2) | | Kirsten M. Spears | 32,277,698 | | Mark D. Brazeal | 37,307,020 | | Charlie B. Kawwas, Ph.D. | 110,215,836(2) |
POTENTIAL PAYMENTS UNDER OUR DEATH AND PERMANENT DISABILITY POLICIES
| (1) The amounts represent the number of shares issued upon full acceleration of each RSU award that has begun vesting and each PSU award for which the performance period has begun with the performance goals deemed achieved at target performance levels, multiplied by $838.36, the closing price of Broadcom common stock on October 27, 2023 (the last trading day of fiscal 2023), including the PSU awards that vested on October 29, 2023. |
POTENTIAL PAYMENTS UNDER OUR DEATH AND PERMANENT DISABILITY POLICIES
| (2) This amount includes the pro-rated number of shares subject to the 2023 Tan/Kawwas PSU Awards based on Broadcom’s performance through a date within 10 days prior to October 29, 2023 and, as the Earning Period has not started, the achievement of the CAGR Milestones, multiplied by $838.36, the closing price of Broadcom common stock on October 27, 2023 (the last trading day of fiscal 2023). |
POTENTIAL PAYMENTS UNDER OUR DEATH AND PERMANENT DISABILITY POLICIES
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POTENTIAL PAYMENTS UNDER OUR DEATH AND PERMANENT DISABILITY POLICIES
CEO PAY RATIO In accordance with SEC rules, Broadcom is providing the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all our employees (the “Ratio”).
CEO PAY RATIO
CEO PAY RATIO For fiscal 2023, the annual total compensation of our CEO, as reported in the “Fiscal 2023 Summary Compensation Table,” is $161,826,161. The median of the annual total compensation of all our employees is $317,199. Therefore, the Ratio calculated in accordance with Item 402(u) of Regulation S-K is 510 to 1. In determining the annual total compensation of the median employee, we calculated such employee’s compensation in accordance with SEC executive compensation disclosure rules. This calculation is the same calculation used to determine the total compensation for purposes of the “Fiscal 2023 Summary Compensation Table” with respect to each of our NEOs.
SUPPLEMENTAL CEO PAY RATIO
SUPPLEMENTAL CEO PAY RATIO As noted in the CD&A, the 2023 Tan PSU Award is front-loaded and intended to cover five annual cash incentive payouts under the APB Plan and five years of annual equity awards. After dividing the GAAP value of the 2023 Tan PSU Award by five to approximate its targeted annual value, Mr. Tan’s annual total compensation is reduced to $33,394,161, as shown in the “Supplemental Fiscal 2023 Summary Compensation Table” above. Therefore, our supplemental CEO pay ratio, which more accurately reflects Mr. Tan’s target compensation on an annual basis, is 105 to 1.
COMPARABILITY
| Year | Summary Compensation Table (“SCT”) Total for Principal Executive Officer (“PEO”)(1)(2) ($) | Compensation Actually Paid (“CAP”) to PEO(3) ($) | Average SCT Total for Non-PEO NEOs(1)(4) ($) | Average CAP to Non-PEO NEOs(5)($) | Value of Initial Fixed $100 Investment based on: (6) | | Net Income ($ Millions) | Net Revenue ($ Millions)(7) | | | | | | | TSR ($) | Peer Group TSR ($) | | | | 2023 | $161,826,161 | $767,654,487 | $26,807,158 | $119,860,261 | $261.58 | $131.38 | $14,082 | $35,819 | | 2022 | 60,606,971 | 49,890,953 | 4,444,960 | (11,048,223) | 143.70 | 106.05 | 11,495 | 33,203 | | 2021 | 60,703,627 | 84,077,321 | 14,983,358 | 42,183,932 | 156.83 | 144.43 | 6,736 | 27,450 |
Nominations for Election of Directors Using Proxy Access
Nominations for Election of Directors Using Proxy Access A stockholder, or group of up to 20 stockholders, that has owned continuously for at least three years shares of Broadcom common stock representing an aggregate of at least 3% of our outstanding shares, may nominate and include in our proxy materials director nominees constituting up to 20% of our Board, provided that the stockholder(s) and nominee(s) satisfy the requirements in our Bylaws. Notice of proxy access director nominees must be received no earlier than the close of business on September 29, 2024 and no later than the close of business on October 29, 2024.
Nominations for Election of Directors not Included in the Proxy Materials
Nominations for Election of Directors not Included in the Proxy Materials Director nominations that a stockholder intends to present at the 2025 Annual Meeting, but does not intend to have included in our proxy materials, must be received no earlier than the close of business on December 24, 2024 and no later than the close of business on January 23, 2025. Notice of director nominations must be submitted by a registered stockholder, must set forth the information required by our Bylaws and comply with additional requirements set forth in Rule 14a-19(b) under the Exchange Act. If you are a beneficial owner of shares held in street name, you can contact the organization that holds your shares for information about how to register your shares directly in your name as a registered stockholder.
Nominations for Election of Directors not Included in the Proxy Materials
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