Broadcom CEO Hock Tan could earn $616.6 million in stock if AI sales skyrocket

SourceCryptopolitan

Sep 10, 2025 14:40

Broadcom CEO Hock Tan has been promised one of the largest potential payouts in the semiconductor industry if the chipmaker achieves ambitious artificial intelligence sales targets by the end of this decade.

Tan could receive up to $616.6 million in shares if the company reaches $120 billion or more in AI product sales for fiscal year 2030, according to a document filed with the SEC.

This package resembles the performance-linked mega-deals that have made Elon Musk famous at Tesla, reflecting how executive pay is increasingly tied to the rise of AI. However, it completely eclipses the proposed package for Musk.

Reward linked to AI milestones

Under the terms of his new contract, Tan will receive 610,521 share units for yield if Broadcom’s AI revenue reaches $90 billion by fiscal year 2030, valued at about $205.5 million at current prices. If sales reach $120 billion, the reward would triple, making him eligible for approximately $616.6 million in share compensation.

Such rewards have precedents in Silicon Valley. Tesla’s 2018 package for Musk, then valued at $56 billion, set the model for linking extraordinary payments to equally extraordinary yields. Interestingly, last week, Tesla’s board proposed a new performance-linked compensation plan worth $1 trillion for Musk.

Broadcom’s AI bet

This compensation plan underscores Broadcom’s determination to carve out a more significant role in AI computing, where Nvidia currently dominates with its graphics processors. Broadcom has been positioning its custom chips as an alternative for hyperscale clients seeking dedicated silicon to train and run AI models.

This strategy appears to be paying off. Last week, Tan announced that Broadcom had secured a major AI client, widely reported as OpenAI, in an agreement valued at over $10 billion. This deal is expected to drive a strong increase in custom chip sales in 2026 and beyond.

Broadcom’s shares have risen 13% since reporting its third-quarter fiscal results. AI revenue increased to $5.2 billion in the quarter, and the company expects it to reach $6.2 billion in the fourth quarter.

Risks and governance concerns

Reaching $120 billion in AI sales by 2030, while possible, will not be easy given the formidable challenges posed by competitors. Nvidia’s dominance, intense competition from rivals like AMD, and potential supply chain bottlenecks pose risks to Broadcom’s trajectory.

Additionally, performance-based rewards are often designed to align executives with shareholder value, but their all-or-nothing binary nature can raise concerns about excessive risk-taking. If Tan leaves before 2030, he would forfeit the reward, highlighting the retention element built into the agreement.

However, investors seem more focused on the growth opportunity. The AI chip marketplace is expanding at an unprecedented pace, and Broadcom’s shift toward custom silicon has positioned it as one of the few credible challengers to Nvidia’s dominance in the sector.