Broadcom CEO Already Rewarded For Qualcomm Bid: Report

Broadcom Chief Executive Officer Hock Tan was already rewarded for his Qualcomm bid, having received $103.2 million in compensation over the course of 2017, Bloomberg reports, citing multiple regulatory filings. Mr. Tan's previously largest annual compensation amounted to $31.9 million which he received from Avago Technologies in 2013, with that firm later merging into Broadcom. Investors are understood to have opted to reward the executive for his existing track record and up his compensation as further motivation for wrapping up the Qualcomm deal that was proposed as part of the largest consolidation in the history of the technology industry. Mr. Tan has so far spearheaded approximately $380 billion of mergers in the semiconductor sector, with the Qualcomm bid having the potential to push his portfolio over the half-a-trillion-dollar mark.

Broadcom CEO also received an annual salary of $1.1 million and a $3.71 million bonus in 2017, thus being one of the best-paid executives in the industry. The majority of his latest compensation package was given in the form of a stock grant valued at over $98 million which will vest in 2020 and 2021 should Broadcom's shares continue outperforming at least half of its rivals. Broadcom stock is currently trading for approximately $250 and has been rising in a steady manner ever since the company went public in 2009 when its stock was being offered for under $20. Mr. Tan is now facing the largest consolidation challenge of his career, with Qualcomm not only being bigger than any of his previous targets but also being unwilling to sell itself. The firm snubbed two historic bids from Broadcom, with the second one amounting to $121 billion, a 24-percent increase compared to the original offer. Qualcomm remains adamant the bid undervalues it by a significant margin and comes with extreme regulatory risks due to the antitrust concerns it raises.

While Qualcomm's board said it's open to further talks, it's understood to have primarily done so to protect itself from possible litigation from investors, i.e. so that it's not accused of breaking its fiduciary duty. Internally, Qualcomm's management believes it's better off on its own in the long term, according to recent reports. Broadcom will attempt a coup of the board at Qualcomm's annual shareholder meeting scheduled to take place on March 6, trying to convince the firm's shareholders to vote for its own directorial nominees willing to sell the company. Two proxy advisory groups, Institutional Shareholder Services and Glass Lewis & Co., recently supported Broadcom and advised investors to vote for replacing Qualcomm's board. Qualcomm strengthened its chances to remain independent by upping its NXP bid by nearly 15-percent to $44 billion on Tuesday.

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