Hock E. Tan
BroadcomAbout Hock E. Tan
Hock E. Tan is President & CEO of Broadcom Inc. and a director since 2006; he is 73 years old and has led Broadcom since March 2006 . Under Tan’s leadership, Broadcom delivered record FY2024 revenue of $51.6 billion, cash from operations of $20.0 billion, and free cash flow of $19.4 billion as VMware integration progressed and AI revenues scaled to $12.2 billion . Over the five-year period through FY2024, Broadcom’s TSR was 561%, materially outperforming the S&P 500 and its compensation peer group .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Integrated Circuit Systems (ICS) | President & CEO | 1999–2005 | Led publicly traded timing solutions IC company until sale to IDT |
| ICS | Chief Operating Officer | 1996–1999 | Operational leadership prior to CEO role |
| ICS | SVP & Chief Financial Officer | 1995–1999 | Financial leadership enabling growth prior to sale |
| Commodore International | Vice President of Finance | 1992–1994 | Finance leadership at global computer company |
| PepsiCo; General Motors | Senior management positions | Not disclosed | Multinational operations experience |
| Pacven Investment (Singapore VC) | Managing Director | 1988–1992 | Venture investing and portfolio management |
| Hume Industries (Malaysia) | Managing Director | 1983–1988 | Regional industrial operator leadership |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Meta Platforms, Inc. | Director | Current | Board service at a hyperscale customer/partner, technology and governance exposure |
| President’s National Security & Telecommunications Advisory Committee | Member | Since 2020 | National infrastructure/security advisory experience |
| Integrated Device Technology (IDT) | Chairman of the Board | 2005–2008 | Post-ICS sale industry stewardship |
Fixed Compensation
| Component | FY2024 Amount | Notes |
|---|---|---|
| Base Salary | $1,226,374 | FY2024 had 53 weeks; base rate effective FY2024 was $1,200,000 |
| Target Bonus % | 0% | Board front-loaded 2023 PSU to cover five years of cash incentive opportunities; no annual cash bonus eligibility through FY2027 |
| Actual Bonus Paid | $0 | No APB Plan payout for FY2024 |
| Perquisites (security, car, 401k match) | $1,408,168 total; includes $1,371,981 residential/personal security, $15,487 car service, $20,700 401(k) match | Security program based on risk assessment by independent directors |
Performance Compensation
| Award | Metric | Target/Structure | Actual/Payout | Vesting |
|---|---|---|---|---|
| 2022 Tan PSU Award (granted Nov 2021) | Relative TSR and absolute TSR | 3-year performance period (11/1/2021–11/3/2024) | Earned 300% of target; 1,477,110 shares at 99th percentile Relative TSR; absolute TSR positive | Vested on 11/3/2024 per award terms |
| 2023 Tan PSU Award (front-loaded) | Stock price performance hurdles (Price Hurdles) + continued service | Covers five years of annual cash and equity opportunities; Earning Period begins after 3rd anniversary and ends at 5th; three Price Hurdles, each earns one-third of award if met during Earning Period | Not yet earned as of FY2024; performance tracking above target; special CAGR Milestones (11.9%, 15.1%, 19.1%) apply for CoC/termination calculations prior to Earning Period | Any earned shares remain subject to continued employment; vesting conditioned on employment through 10/31/2027 |
Notes:
- Board explicitly stated no annual equity grants and no annual cash incentive eligibility for Tan during the five-year vesting period of the 2023 PSU award .
- The 2023 PSU award comprises 10,000,000 unearned shares subject to Price Hurdles and service; vesting requires employment on 10/31/2027 even if hurdles are met .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of Feb 21, 2025) | 1,844,746 shares; less than 1% of shares outstanding (4,701,930,317 shares outstanding) |
| Stock Ownership Guidelines | CEO required to hold 6x base salary; executive officers are in compliance |
| Anti-Hedging/Pledging | Hedging prohibited; pledging prohibited absent limited Board/NESG-approved exception; no executive officer or director other than Dr. Samueli has pledged shares |
| Vested vs Unvested | 2022 PSU vested on 11/3/2024; 2023 PSU unearned/unvested as of FY2024 with Earning Period starting after 10/31/2025 and vesting conditioned on employment through 10/31/2027 |
Supply dynamics:
- Company eliminated 7.4 million shares in Q4 FY2024 related to net-settled equity award tax withholdings; FY2024 eliminations totaled $5.2 billion of shares withheld, indicating net settlement practices that can affect float but are not Tan-specific .
Employment Terms
| Scenario | Cash Severance (Base) | Bonus Multiple | Health Benefits Continuation | Equity Acceleration |
|---|---|---|---|---|
| Change-in-Control (Double Trigger; Tan) | 24 months | 200% (lesser of prior year actual or target) | 12 months | 100% acceleration; for incomplete performance periods, deemed target or special terms for 2023 PSU (greater of pre-CoC performance or deal price; if before Earning Period, use CAGR Milestones) |
| Non-CoC Termination (Tan) | 12 months | 100% (lesser of prior year actual or target) | 6 months | Prorated for certain PSUs; for 2023 PSU before Earning Period, prorated based on CAGR Milestones in lieu of Price Hurdles |
| Death/Permanent Disability | Full acceleration of time-based awards; PSU performance deemed achieved at 100% of target for started periods; applies to officers and designated executives per policy |
Illustrative CoC values (as of 11/3/2024, using $168.92 share price):
- Tan total CoC package estimated at $1,941,148,598 including equity acceleration and cash/benefits .
Board Governance
- Director since 2006; not “independent” under Nasdaq due to CEO role .
- Committee roles: Member, Executive Committee (Board leadership structure separates CEO and independent Chairman; Lead Independent Director in place) .
- Board meeting attendance: Board held eight meetings in FY2024; each director attended at least 75% of Board/committee meetings .
- Dual-role implications: Independence mitigated by separate Chairman (Henry Samueli), Lead Independent Director (Eddy W. Hartenstein), regular executive sessions of independent directors, and majority-independent Board (8 of 9 nominees) .
- Director compensation: Tan receives no compensation for Board service or committee work .
Say-on-Pay & Shareholder Feedback
- FY2024 say-on-pay proposal received 61% approval; Board engaged broadly before and after the vote, with focus on the 2023 Tan PSU award and succession planning .
- Board responses included reaffirming that Tan will not receive annual cash incentives or annual equity grants during the five-year vesting period of the 2023 PSU award and providing enhanced disclosure on CEO succession planning .
Compensation Structure Analysis
- Shift to multi-year, performance equity: Tan’s 2023 PSU award front-loads five years of cash and LTI, eliminating annual grants and bonus eligibility through FY2027, increasing at-risk, long-duration pay tied to stock price hurdles and service .
- Governance safeguards: No excise tax gross-ups, no single-trigger CIC benefits, clawback policy aligned with SEC/Nasdaq, no hedging, and pledging prohibited absent Board-approved exceptions .
- Pay-for-performance evidence: 2022 PSU paid 300% at 99th percentile Relative TSR; five-year TSR of 561%; record FY2024 financials driven by AI and VMware integration .
Equity Ownership & Alignment Details
| Date | Shares Beneficially Owned | % of Outstanding | Ownership Guidelines Compliance |
|---|---|---|---|
| Feb 21, 2025 | 1,844,746 | * <1% (out of 4,701,930,317 shares) | CEO required 6x base salary; executives are in compliance |
Anti-pledging and anti-hedging policies apply to Tan; no pledging by Tan disclosed .
Performance & Track Record
- FY2024 highlights: Record revenue $51.6B; adjusted EBITDA $31.9B; free cash flow $19.4B; AI revenue $12.2B; quarterly dividend increased 11% to $0.59 per share for FY2025 .
- Strategic execution: Successful integration and simplification of VMware portfolio; AI product leadership (AI XPUs, Ethernet networking) driving revenue mix .
Investment Implications
- Alignment and retention: Front-loaded 2023 PSU with stringent price hurdles and employment through Oct 2027 creates strong long-term alignment, reduces near-term incentive to sell, and concentrates realization on 2025–2027 milestones .
- Potential overhang: If Price Hurdles are achieved, up to 10 million shares could be earned under the 2023 PSU and vest contingent on employment by Oct 31, 2027; investors should monitor progress toward hurdles and any disclosures on achievement timing .
- Governance risk moderating factors: Separate Chair/LID, robust clawback, no single-trigger CIC, anti-hedging/pledging help offset dual-role independence concerns; however, say-on-pay support at 61% indicates continued investor scrutiny on award quantum .
- Succession planning: Board emphasizes long-term and interim CEO succession plans with annual reviews; execution continuity mitigates key-person risk, but dependency on Tan remains a watch item for investors .