Broadcom Shares Soar 10% As CEO Pay Tied To $120 Billion AI Goal

This article first appeared on GuruFocus.

Sep 10 – Broadcom Inc. (NASDAQ:AVGO) shares soared about 10% on Wednesday morning after the company tied CEO Hock Tan’s compensation to ambitious artificial intelligence revenue targets, strengthening its long-term focus on AI growth.

The board approved a performance-based equity grant on September 3 that could deliver Tan up to $616 million in stock if Broadcom generates $120 billion in AI revenue by 2030. The award, known as the Tan PSU Award, requires Tan to stay on as CEO through the end of the decade.

At the midpoint, the grant covers roughly 610,000 shares. Broadcom will issue no payout if revenue remains below $60 billion, but the company could award up to three times the target shares if AI revenue surpasses $120 billion over four consecutive quarters.

Broadcom has already strengthened its AI position by securing a $10 billion custom chip deal with OpenAI, a move that analysts say could weigh on demand for rival NVIDIA Corp.’s (NASDAQ:NVDA) GPUs. The company also continues expanding into custom accelerators, networking, and cloud infrastructure.