6 ms·

Broadcom CEO pay award jumps 164% to $160.8M

50 points by neverrroot 3y ago

MatthiasPortzel 3y ago
I’m not a big fan of this style of rhetoric, but the facts of the article are interesting. I wasn’t aware of Broadcom’s pivot to infrastructure nor their acquisition of VMware.
- Topgamer7 3y ago
  Pretty surprising to not hear about VMware acquisition. People have been talking about the 10000% (or w/e) price increase for weeks. I hear about it constantly reading HN and Reddit.
  - solumunus 3y ago
    Do you know if there any publicly traded competitors that customers may turn to?
    - candiddevmike 3y ago
      IBM, Nutanix, Microsoft, cloud providers.
    - kotaKat 3y ago
      "Krause told investors that the company actively pursues 600 customers ... ... because they are often in highly regulated industries, therefore risk-averse, and unlikely to change suppliers." In short: no. Broadcom knows their top 600 or so accounts that are nearly 50% of their revenue have no place to run, and the remaining 6000 or so will be forced to bite the bullet. Everyone else (eg, "distribution channels") are a 10% revenue blip in the radar that Broadcom doesn't care about having wind down or disappear. https://www.theregister.com/2022/05/30/broadcom_strategy_vmware_customer_impact/ https://www.theregister.com/2022/05/30/broadcom_strategy_vmw...
    - SteveNuts 3y ago
      Nutanix has a "free" KVM based hypervisor that you can use if you buy their HCI platform (you can also run VMware on top if you prefer). From what I've heard it seems that most enterprises are moving to Hyper-V because it's already included in their Microsoft agreements (server Datacenter licenses).
BeetleB 3y ago
Every time I read an article like this, they fail to mention an important factor: The equity payout occurs only if they hit certain milestones (typically stock price hitting some value), and they expire if they don't hit that milestone. Take this: "Intel reported that its new CEO Pat Gelsinger earned $178.59 million in total compensation over an 11-month span from when he started in February 2021, until the end of the year." No he didn't. He didn't hit any of the stock goals since signing on as CEO, and the grants will likely expire before Intel's price hits those goals (I think the lowest target is in the 80 dollars). His actual compensation? About $10M - quite a bit of it being a sign on bonus. https://www.crn.com/news/components-peripherals/intel-ceo-pat-gelsinger-earned-179m-in-2021 https://www.crn.com/news/components-peripherals/intel-ceo-pa...
- nequo 3y ago
  Where does one learn about the milestones and the actual compensation?
  - pottertheotter 3y ago
    Proxy statements. You can find them either on the investor relations website for the company, or the SEC website
  - carimura 3y ago
    https://investors.broadcom.com/node/61851/html https://investors.broadcom.com/node/61851/html
  - BeetleB 3y ago
    Annual proxy statement. Will have details on the compensation of leadership, and (usually) a scorecard for the past year.
- carimura 3y ago
  Ya and vested over 5 years. See the actual SEC filing copy: 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. 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.”
kstrauser 3y ago
Right after layoffs. I'm sure Hock Tan would see it differently, but I interpret that as a vote of no-confidence in VMware followed by extracting as much cash as possible before the ship sinks. Were I in the market for VMware today, no, I would not be.
- SteveNuts 3y ago
  Which is a huge shame because historically it's been an incredibly stable and easy to use platform with tons of third party support and integrations. And starting with vSphere 7 it's been really easy to manage and snappy with a full web interface (it used to be a weird half thick client/half web interface management). People don't realize how revolutionary VMware was in the IT community, it was probably the biggest disruption between 2005-2015.
  - kstrauser 3y ago
    And for now, I'm sure it's still great. However, I personally believe it's in keep-the-lights-on maintenance mode. If you like it today, great. I wouldn't have faith in any public roadmap though.
swozey 3y ago
I used to really look up to and want to work for Vmware. And a lot of other FAANG that lost their magic over the last decade.
deleted 3y ago
[deleted]
ChrisArchitect 3y ago
Related: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M https://news.ycombinator.com/item?id=39509506 https://news.ycombinator.com/item?id=39509506

50 points by neverrroot 3y ago

I’m not a big fan of this style of rhetoric, but the facts of the article are interesting. I wasn’t aware of Broadcom’s pivot to infrastructure nor their acquisition of VMware.

Topgamer7 3y ago
Pretty surprising to not hear about VMware acquisition. People have been talking about the 10000% (or w/e) price increase for weeks. I hear about it constantly reading HN and Reddit.
- solumunus 3y ago
  Do you know if there any publicly traded competitors that customers may turn to?
  - candiddevmike 3y ago
    IBM, Nutanix, Microsoft, cloud providers.
  - kotaKat 3y ago
    "Krause told investors that the company actively pursues 600 customers ... ... because they are often in highly regulated industries, therefore risk-averse, and unlikely to change suppliers." In short: no. Broadcom knows their top 600 or so accounts that are nearly 50% of their revenue have no place to run, and the remaining 6000 or so will be forced to bite the bullet. Everyone else (eg, "distribution channels") are a 10% revenue blip in the radar that Broadcom doesn't care about having wind down or disappear. https://www.theregister.com/2022/05/30/broadcom_strategy_vmware_customer_impact/ https://www.theregister.com/2022/05/30/broadcom_strategy_vmw...
  - SteveNuts 3y ago
    Nutanix has a "free" KVM based hypervisor that you can use if you buy their HCI platform (you can also run VMware on top if you prefer). From what I've heard it seems that most enterprises are moving to Hyper-V because it's already included in their Microsoft agreements (server Datacenter licenses).

BeetleB 3y ago

Every time I read an article like this, they fail to mention an important factor: The equity payout occurs only if they hit certain milestones (typically stock price hitting some value), and they expire if they don't hit that milestone. Take this: "Intel reported that its new CEO Pat Gelsinger earned $178.59 million in total compensation over an 11-month span from when he started in February 2021, until the end of the year." No he didn't. He didn't hit any of the stock goals since signing on as CEO, and the grants will likely expire before Intel's price hits those goals (I think the lowest target is in the 80 dollars). His actual compensation? About $10M - quite a bit of it being a sign on bonus. https://www.crn.com/news/components-peripherals/intel-ceo-pat-gelsinger-earned-179m-in-2021 https://www.crn.com/news/components-peripherals/intel-ceo-pa...

nequo 3y ago
Where does one learn about the milestones and the actual compensation?
- pottertheotter 3y ago
  Proxy statements. You can find them either on the investor relations website for the company, or the SEC website
- carimura 3y ago
  https://investors.broadcom.com/node/61851/html https://investors.broadcom.com/node/61851/html
- BeetleB 3y ago
  Annual proxy statement. Will have details on the compensation of leadership, and (usually) a scorecard for the past year.
carimura 3y ago
Ya and vested over 5 years. See the actual SEC filing copy: 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. 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.”

kstrauser 3y ago

Right after layoffs. I'm sure Hock Tan would see it differently, but I interpret that as a vote of no-confidence in VMware followed by extracting as much cash as possible before the ship sinks. Were I in the market for VMware today, no, I would not be.

SteveNuts 3y ago
Which is a huge shame because historically it's been an incredibly stable and easy to use platform with tons of third party support and integrations. And starting with vSphere 7 it's been really easy to manage and snappy with a full web interface (it used to be a weird half thick client/half web interface management). People don't realize how revolutionary VMware was in the IT community, it was probably the biggest disruption between 2005-2015.
- kstrauser 3y ago
  And for now, I'm sure it's still great. However, I personally believe it's in keep-the-lights-on maintenance mode. If you like it today, great. I wouldn't have faith in any public roadmap though.

swozey 3y ago

I used to really look up to and want to work for Vmware. And a lot of other FAANG that lost their magic over the last decade.

deleted 3y ago

[deleted]

ChrisArchitect 3y ago

Related: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M https://news.ycombinator.com/item?id=39509506 https://news.ycombinator.com/item?id=39509506