TLDR
- Broadcom CEO Hock Tan received a performance stock award worth up to $616 million tied to AI revenue targets reaching $120 billion by 2030
- The award only vests if Broadcom hits demanding AI revenue goals between fiscal 2028-2030 and Tan remains CEO through that period
- Broadcom secured a $10 billion custom AI chip deal with OpenAI, positioning itself as competition to Nvidia
- AVGO stock has gained 45% year-to-date, outpacing the Nasdaq’s 13% gain
- Analysts estimate Broadcom’s AI chip revenue could reach $20 billion in 2025
Broadcom tied CEO Hock Tan’s compensation directly to the company’s artificial intelligence success with a massive performance stock award. The board approved the grant on September 3, 2025, linking Tan’s payout to specific AI revenue targets.
The award covers 610,521 shares at target performance levels. Tan gets zero shares if revenue fails to exceed $60 billion. He could earn up to 300% of target shares if revenue surpasses $120 billion in any four consecutive quarters.
The performance period runs from fiscal 2028 through fiscal 2030. Tan must remain CEO through the end of that period for the award to vest.
Board members called the performance hurdles “rigorous” in their filing. They said the targets reflected input from shareholders about tying executive pay to company performance.
The move comes as Broadcom positions itself at the center of the AI boom. Under Tan’s leadership, the company expanded into custom AI accelerators and data center infrastructure products.
Custom Chip Deal Challenges Nvidia
Broadcom recently secured a major AI chip customer that sources identified as OpenAI. The deal is worth $10 billion and represents a direct challenge to Nvidia’s dominance in AI processors.
Tan confirmed the OpenAI partnership during a Goldman Sachs conference. He said 2026 custom chip sales could exceed previous forecasts but avoided providing specific projections.
Citi analyst Atif Malik cut Nvidia’s price target from $220 to $210 after news of Broadcom’s OpenAI deal. Malik warned that Nvidia’s 2026 GPU sales could drop about 4% as competition heats up.
The custom silicon business gives Broadcom a path to compete with Nvidia’s dominant position. Analysts see this as a key growth driver for the company’s AI strategy.
Stock Performance and Leadership Extension
AVGO shares have risen more than 45% year-to-date. This performance far exceeds the Nasdaq Composite’s 13% gain over the same period.
Last week, Tan agreed to remain CEO through at least 2030. This timeline aligns with the vesting period of his new performance award.
Analysts surveyed by Bloomberg estimate Broadcom’s AI chip revenue could reach $20 billion in 2025. The company’s expansion into AI and cloud computing markets is expected to drive future growth.
The semiconductor industry is undergoing what Broadcom called an “unprecedented transformation” driven by artificial intelligence. The company’s board believes Tan’s continued leadership is critical during this period.
TipRanks’ AI analyst Spark rates AVGO as “Outperform” based on strong financial performance and positive earnings guidance in AI semiconductors. Technical analysis shows bullish momentum, though the stock appears overbought.
The most recent analyst rating on AVGO stock is a Buy with a $365 price target. The company’s focus on custom AI accelerators, XPUs, and network switches positions it well for continued growth in the AI sector.
AVGO stock traded 2.33% higher to $344.53 in premarket trading Wednesday following the compensation announcement.
