Broadcom Inc. (NASDAQ:AVGO) has granted Chief Executive Officer Hock E. Tan a long-term equity award that directly links his compensation to the company’s success in artificial intelligence, underscoring the board’s commitment to retaining his leadership through the end of the decade.
The award, approved by independent members of the board on September 3, 2025, gives Tan performance stock units that vest only if Broadcom meets demanding AI revenue goals between fiscal 2028 and fiscal 2030 and if he remains in his role through the end of that period.
At target, the grant covers 610,521 shares, with payouts ranging from zero if revenue fails to exceed $60 billion, to as much as 300% of target if revenue surpasses $120 billion in any four consecutive quarters.
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“The independent members of the board believe that for the company to compete successfully in a highly competitive technology industry that is undergoing profound change due to AI, the company must continue to develop increasingly advanced technologies or execute on new strategies and business models to meet the accelerating demand of its customers,” the filing stated. The directors said the performance hurdles were “rigorous” and reflected shareholder input.
The package, referred to as the “Tan PSU Award,” comes as Broadcom positions itself at the center of the AI and cloud computing boom.
Under Tan, the company has expanded into custom AI accelerators, XPUs, ASICs, networking switches, and data center infrastructure products, markets that are expected to drive growth in the coming years.
The move highlights Broadcom’s bet that Tan’s continued leadership is critical as the semiconductor industry undergoes what the company called an “unprecedented transformation” driven by artificial intelligence.
The award also signals Broadcom’s push to position its custom silicon as a viable alternative to Nvidia’s (NASDAQ:NVDA) dominant AI processors.
Tan recently confirmed that Broadcom secured a major AI chip customer, identified by sources as OpenAI, and said 2026 custom chip sales could outpace prior forecasts.
Speaking at a Goldman Sachs conference, he avoided providing detailed sales projections, though analysts surveyed by Bloomberg estimate AI chip revenue could reach $20 billion in 2025.
Citi analyst Atif Malik recently cut Nvidia’s price forecast to $210 from $220 after Broadcom’s $10 billion custom chip deal with OpenAI, warning that Nvidia’s 2026 GPU sales could fall about 4% as competition intensifies.
Last week, Tan agreed with Broadcom’s board to remain CEO through at least 2030, aligning his tenure with the vesting period of the new award.
The company’s stock has risen more than 45% year-to-date, far outpacing the Nasdaq Composite’s 13% gain.
Price Action: AVGO stock is trading higher by 2.33% to $344.53 premarket at last check Wednesday.
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