| 12 | 2023 Proxy Statement
BOARD OF DIRECTORS Nominating, Environmental, Social & Governance CommitteeEach member of the NESG Committee is independent in accordance with the applicable Nasdaq rules and regulations. | Members | Primary Responsibilities | | | | | | | Meetings
in Fiscal
Year 2022 | Members | Primary Responsibilities | Meetings in Fiscal Year 2021 | | | | Eddy W. Hartenstein
(Chair)
| • | Take a leadership role in shaping our corporate governance policies and procedures and develop recommendations for our Board | 4 | | • | Identify, evaluate and recommend to our Board qualified candidates to become directors and to fill vacancies on the Board | | | • | Assess director independence | | | • | Oversee the annual evaluation of our Board and its committees | | | • | Consider stockholder proposals submitted for consideration at the annual meeting of stockholders | | | • | Periodically assess director continuing education with respect to the business, financial statements, corporate governance and other appropriate subjects | | | • | Periodically review and assess the Corporate Governance Guidelines and recommend changes to our Board | | | • | Oversee Broadcom’s ESG corporate responsibility and sustainability program and initiatives, including environment, climate, diversity and inclusion, human rights and governance issues, and report to the Board on such program, initiatives and issues | 4 | | | | |
The Executive Committee is comprised of our CEO, the Chairman of the Board and such other directors as our Board appoints. | Members | | | | | | | | | Members | Primary Responsibilities | Meetings in Fiscal
Year 20212022 | | | | Henry Samueli, Ph.D.
(Chair) | Review and approve, subject to specified limitations: | 2 | | • | investments, acquisitions, dispositions and capital expenditures | | | • | new or incremental debt financings or borrowings, or amendments thereto, or refinancings thereof, including convertible debt, bond financing and commercial paper | | | • | treasury, cash management and other banking matters | | | Review and provide recommendations to our Board on matters requiring full Board approval, including: | | | • | business opportunities, strategies and proposals, and other strategic matters | | | • | business plans, annual budgets, targets, operational plans, capital structure and dividend policy | | | • | proposed transactions that exceed itstheir approval thresholds | | | • | efficient organization and management structure of Broadcom | 1 |
BOARD OF DIRECTORS
Board Evaluations Our Board is committed to reviewing its performance through an annual evaluation process, which is overseen by the NESG Committee. Through the evaluations, our directors provide feedback on our Board and its committees and our Board assesses its processes and overall effectiveness. The Chairman of the Board and the Lead Independent Director report the results to our full Board and the Chairpersons of each committee report the results to their respective committees. Director Compensation On an annual basis, the Compensation Committee reviews our non-employee director compensation, with input from its independent compensation consultant regarding market practice and the competitiveness of our non-employee director compensation. Our Board approves any changes to our non-employee director compensation, taking into consideration the recommendations of the Compensation Committee and based on its own review. Our non-employee directors receive cash and equity compensation in consideration for their service on our Board, as set forth in more detail below, butbelow. Our non-employee directors do not receive any non-equity incentive compensation or participate in any company pension plan or deferred compensation plan. Dr. Samueli has declined all compensation, including equity awards, for his service on our Board and as its Chairman. However, we provide Dr. Samueli with access to office space and administrative support in connection with the discharge of his duties as Chairman. The unvested equity awards that we previously granted to Dr. Samueli during his tenure as an employee of Broadcom continue to vest, subject to the terms and conditions of the awards. We also do not compensate Mr. Tan for his service on our Board or any committee of our Board. OurIn Fiscal Year 2022, our non-employee directors arewere entitled to receive the following annual cash compensation, payable quarterly: | | | | | | | Pay Component | Annual Fees | | Annual Retainer (payable to all non-employee directors) | $ | 90,000 | | Additional Fees: | | | Independent Chairperson of the Board | $ | 150,000 | | Lead Independent Director | $ | 100,000 | | Chairperson of the Audit Committee | $ | 40,000 | | Chairperson of the Compensation Committee | $ | 22,500 | | Chairperson of the NESG Committee | $ | 20,000 | | Member of the Audit Committee (other than chairperson) | $ | 15,000 | | Member of the Compensation Committee (other than chairperson) | $ | 10,000 | | Member of the NESG Committee (other than chairperson) | $ | 10,000 |
| Pay Component | | Annual Fees | | | Annual Retainer (payable to all non-employee directors) | | $ | 90,000 | | | Additional Fees: | | | | | Independent Chairperson of the Board | | $ | 150,000 | | | Lead Independent Director | | $ | 100,000 | | | Chairperson of the Audit Committee | | $ | 40,000 | | | Chairperson of the Compensation Committee | | $ | 22,500 | | | Chairperson of the NESG Committee | | $ | 20,000 | | | Member of the Audit Committee (other than chairperson) | | $ | 15,000 | | | Member of the Compensation Committee (other than chairperson) | | $ | 10,000 | | | Member of the NESG Committee (other than chairperson) | | $ | 10,000 | |
In December 2022, our Board approved an increase in the cash compensation paid to our non-employee directors based on the recommendation of the Compensation Committee and its independent compensation consultant, and taking into account that no changes to the non-employee director cash compensation has been made since December 2018. Effective December 7, 2022, the annual retainer increased to $105,000 and additional fees payable to Chairperson of the Compensation Committee and the Chairperson of the NESG Committee increased to $30,000 and $25,000, respectively. All other fees remain unchanged. In addition, we reimburse or pay non-employee directors for travel and other out-of-pocket expenses related to their attendance at Board and committee meetings, the annual meeting of stockholders and other Board-related travel undertaken at our request. BOARD OF DIRECTORS Equity Compensation Our non-employee directors are also entitled to receive the following equity awards: • upon appointment to our Board, an initial service-based RSU award using a target value of $220,000, prorated based on the expected portion of a year to be served between the time of such director’s appointment and the anticipated date of our annual meeting of stockholders immediately following the director’s appointment; and
• an annual service-based RSU award using a target value of $220,000, to be granted on the date of each annual meeting of stockholders, subject to the director’s re-election at such meeting.
| • | upon appointment to our Board, an initial RSU award using a target value of $250,000, prorated based on the expected portion of a year to be served between the time of such director’s appointment and the anticipated date of our annual meeting of stockholders immediately following the director’s appointment; and | | • | an annual RSU award using a target value of $250,000, to be granted on the date of each annual meeting of stockholders, subject to the director’s re-election at such meeting. |
To determine the number of shares of common stock granted pursuant to such awards, the value of the award is divided by the average of our per share closing market prices quoted on the Nasdaq Global Select Market over the 30 calendar days immediately preceding the grant date. These service-based RSU awards vest in full on the earlier of (i) the first anniversary of the grant date or (ii) the date on which the annual meeting of stockholders immediately following the grant date is held, subject to the director’s continued service on our Board. In connection with its annual review of non-employee director compensation, our Board approved in December 2021 an increase in the equity compensation granted to our non-employee directors based on the recommendation of the Compensation Committee and its independent compensation consultant and taking into account that no changes had been made to the non-employee director compensation since December 2018. Effective December 8, 2021, non-
employee directors will be entitled to receive an initial service-based RSU award and an annual service-based RSU award with a target value of $250,000, subject to the same terms and conditions as described above.
Director Compensation for Fiscal Year 2021 2022The following table sets forth information regardingthe compensation earned by our non-employee directors during Fiscal Year 2021. 2022.| Name | | Fees Earned or
Paid in Cash | | | Stock
Awards(1) | | | Total | | | Diane M. Bryant | | $100,000 | | | $255,474 | | | $355,474 | | | Gayla J. Delly | | $115,000 | | | $255,474 | | | $370,474 | | | Raul J. Fernandez | | $115,000 | | | $255,474 | | | $370,474 | | | Eddy W. Hartenstein | | $223,125 | | | $255,474 | | | $478,599 | | | Check Kian Low | | $110,000 | | | $255,474 | | | $365,474 | | | Justine F. Page | | $130,000 | | | $255,474 | | | $385,474 | | | Harry L. You | | $124,375 | | | $255,474 | | | $379,849 | |
| | | | | | | | | | | | | Name | Fees Earned or
Paid in Cash | Stock
Awards(1) | Total | | Diane M. Bryant | $ | 100,000 | $ | 225,662 | $ | 325,662 | | Gayla J. Delly | $ | 115,000 | $ | 225,662 | $ | 340,662 | | Raul J. Fernandez | $ | 115,000 | $ | 225,662 | $ | 340,662 | | Eddy W. Hartenstein | $ | 232,500 | $ | 225,662 | $ | 458,162 | | Check Kian Low | $ | 110,000 | $ | 225,662 | $ | 335,662 | | Justine F. Page | $ | 130,000 | $ | 225,662 | $ | 355,662 | | Harry L. You | $ | 115,000 | $ | 225,662 | $ | 340,662 |
(1) Represents the grant date fair value of service-based RSU awards granted in Fiscal Year 2021, determined in accordance with Accounting Standards Codification Topic Number 718 (“ASC 718”), which is the closing market price of Broadcom common stock on the date of grant, reduced by the present value of dividends expected to be paid on Broadcom common stock prior to vesting. The amounts shown represent the grant date fair value of a service-based RSU award for 476 shares of common stock granted to the director on April 5, 2021 following his or her election to our Board. The table below shows the aggregate number of shares of common stock underlying service-based RSUs held by our non-employee directors as of October 31, 2021:
| (1) | Represents the grant date fair value of RSU awards granted in Fiscal Year 2022, determined in accordance with Accounting Standards Codification Topic Number 718 (“ASC 718”), which is the closing market price of Broadcom common stock on the date of grant, reduced by the present value of dividends expected to be paid on Broadcom common stock prior to vesting. The amounts shown represent the grant date fair value of a RSU award for 413 shares of common stock granted to the director on April 4, 2022 following his or her election to our Board. The table below shows the aggregate number of shares of common stock underlying RSU awards held by our non-employee directors as of October 30, 2022: |
| Name | | | | | Name | Number of Shares
Underlying RSUs | | | Diane M. Bryant | 476413 | | | Gayla J. Delly | 476413 | | | Raul J. Fernandez | 476413 | | | Eddy W. Hartenstein | 476413 | | | Check Kian Low | 476413 | | | Justine F. Page | 476413 | | | Harry L. You | 476413 | |
PROPOSAL 1: ELECTION OF DIRECTORS
| | | PROPOSAL 1: ELECTION OF DIRECTORS |
PROPOSAL 1:
ELECTION OF DIRECTORS Our Board is comprised of nine directors and our directors are to be elected each year at the annual meeting of stockholders. Upon the recommendation of the NESG Committee, our Board nominated the nine individuals below for election as directors, all of whom are currently directors. Stockholders may not vote their proxies for a greater number of persons than the number of director nominees provided below. Our Board expects that each of the director nominees will be available to serve as a director. Stockholders may not vote their proxies for a greater number of persons than the number of nominees named below. In the event a director nominee resigns or otherwise becomes unwilling or unable to serve after the mailing of the Internet Notice but before the Annual Meeting, our intention would be to make a public announcement of such resignation and either reduce the size of our Board or appoint a substitute nominee, in accordance with our Amended and Restated Bylaws (the “Bylaws”). If we reduce the size of our Board, this would reduce the number of nominees to be elected at the Annual Meeting. Votes received in respect of such director would not be counted in such circumstances. In the event that we instead propose to elect a substitute nominee at the Annual Meeting to fill any such vacancy, it is intended that the shares represented by the proxy will be voted for such substitute nominee. Our Board believes that each director nominee has the experience, qualification, personal and professional integrity, and diversity of background and understandsunderstanding of our business and industry. After careful consideration,industries required for service on our Board. Our Board, in consultation with the NESG Committee, also believes that each director nominee has demonstrated the willingness and the ability to dedicate adequatesufficient time and attention to fulfill the responsibilities required as a director and that the service with other public companies does not and will not impact service on our Board. We also believe that the director nominees together have the skills and experience to form a board that is well suited to oversee the risks and opportunities facing Broadcom. The biographical information of each director nominee provided below is as of February 7, 2022. 6, 2023. | | | | | | | | | Diane M. Bryant | | | |
Director sinceSince: 2019
•Compensation
60 | Ms. Bryant has served as Chief Executive Officer of NovaSignal Corp. since January 2020. She was Chief Operating Officer of Google Cloud (cloud computing services) from December 2017 to July 2018. Prior to Google Cloud, she held several executive leadership positions at Intel Corporation, including as Group President in 2017 and Executive Vice President and General Manager from January 2012 to July 2017 of the Data Center Group, the worldwide organization that develops server, storage and network platforms for the digital services economy, and Corporate Vice President and Chief Information Officer from 2008 to 2012. She also serves on the Chancellor’s Board of Advisors at the University of California at Davis. Ms. Bryant served as a director of United Technologies Corporation from January 2017 until its acquisition by Raytheon Company in April 2020. Qualifications : Ms. Bryant brings semiconductor, manufacturing/supply chain, software/cloud computing, technology/innovation, global business, cybersecurity, business development and strategy, and executive leadership expertise to the Board from serving as Chief Executive Officer at NovaSignal, accelerating the scale and reach of Google Cloud’s business, and from her extensive business leadership experience at Intel Corporation, as well as her public company board and committee experience. |
PROPOSAL 1: ELECTION OF DIRECTORS
| | | PROPOSAL 1: ELECTION OF DIRECTORS |
| | | | | | | | | Gayla J. Delly | | | |
Director sinceSince: 2017
•Audit
•NESG
63 | Ms. Delly served as Chief Executive Officer of Benchmark Electronics Inc., a company that provides contract manufacturing, design, engineering, test and distribution services to manufacturers of computers, medical devices, telecommunications equipment and industrial control and test instruments, from 2012 to 2016. She also held several executive leadership positions at Benchmark, including as President from 2006 to 2011, Executive Vice President and Chief Financial Officer from 2001 to 2006, and Corporate Controller and Treasurer from 1995 to 2001. She is a certified public accountant and was a senior audit manager at KPMG before joining Benchmark. Ms. Delly currently serves as a director of Flowserve Corporation and National Instruments Corporation. She also served as a director of Benchmark from 2011 to 2016. Qualifications : Ms. Delly brings semiconductor, manufacturing/supply chain, technology/innovation, cybersecurity, global business, business development and strategy, executive leadership and finance/accounting expertise to the Board from her experience in senior executive and financial management positions, organizational management, international manufacturing and accounting, as well as her public company board and committee experience. |
| | | Raul J. Fernandez | | | |
Director sinceSince: 2020
•Audit
•NESG
56 | Mr. Fernandez has served as Vice Chairman and owner of Monumental Sports & Entertainment, a private partnership that co-owns the National Basketball Association’s Washington Wizards, the National Hockey League’s Washington Capitals, the Women’s National Basketball Association’s Washington Mystics and the Wizards District Gaming NBA 2K team and co-owns and operates the Capital One Arena in Washington, DC, since 2010. He is a Senior Advisor to and a Limited Partner of General Atlantic Partners, a growth equity firm, a Special Advisor to and a Limited Partner of Carrick Capital Partners, a private equity firm, and a member of the Strategic Advisory Board and a Limited Partner of Volition Capital, a growth equity firm. He was Chairman and Chief Executive Officer of ObjectVideo, Inc., a developer of intelligent video surveillance software, from January 2004 to March 2017. He founded and was Chief Executive Officer of Proxicom, Inc., a global provider of e-commerce solutions for Fortune 500 companies, from its inception in 1991 until its acquisition in 2001. He was also a member of President George W. Bush’s Council of Advisors on Science and Technology. Mr. Fernandez currently serves as a director of DXC Technology Company. He also served as a director of Capitol Investment Corp. V from October 2020 to July 2021, GameStop Corp. from April 2019 to June 2021 and Kate Spade & Co. from 2001 until its acquisition by Coach, Inc. in July 2017, and as Chairman of the board of Proxicom from 1991 until its acquisition in 2001. Qualifications : Mr. Fernandez brings software/cloud computing, cybersecurity, technology/innovation, global business, business development and strategy, executive leadership and finance/accounting expertise to the Board from his more than two decades of extensive operating experience and executive leadership, his experience as a founder and chief executive officer of technology and software companies, and his familiarity in government affairs, as well as his public company board and committee experience. |
PROPOSAL 1: ELECTION OF DIRECTORS
| | | PROPOSAL 1: ELECTION OF DIRECTORS |
| | | | | | | | | Eddy W. Hartenstein | | | | Lead Independent Director since 2018
Director sinceSince: 2016
•Compensation
•NESG (Chair)
•Executive
72 | Mr. Hartenstein served as the publisher and Chief Executive Officer of the Los Angeles Times from 2008 to 2014. He was President and Chief Executive Officer from 2011 to 2013 and co-President from 2010 to 2011 of the Tribune Company. He was Chief Executive Officer from 2001 to 2004 and President from its inception in 1990 to 2001 of DIRECTV Inc. Mr. Hartenstein currently serves as lead independent director on the board of SIRIUS XM Holdings Inc. He also served as a director of TiVo Corporation from September 2016 until its acquisition by Xperi Corporation in June 2020, Tribune Publishing Company from August 2014 to May 2020, Yahoo, Inc. from April 2016 to June 2017, Broadcom Corporation from 2008 to 2016, Rovi Corporation from 2015 until its acquisition by TiVo Corporation in 2016, and SanDisk Corporation from 2005 to until its acquisition by Western Digital Corporation in 2016, and as Vice Chairman of the board of The DIRECTV Group Inc. from 2003 to 2004 and Chairman of the board of DIRECTV Inc. from 2001 to 2004. Qualifications : Mr. Hartenstein brings semiconductor, technology/innovation, global business, business development and strategy, executive leadership and finance/accounting expertise to the Board from serving as Chief Executive Officer of the Los Angeles Times, the Tribune Company and DIRECTV and his extensive executive leadership in successfully creating and entering new markets and organizational management, as well as his considerable public company board and committee experience at various global technology companies. |
| | | Check Kian Low | | | |
Director sinceSince: 2016
•Compensation
•NESG
63 | Mr. Low has served as a founding partner and director of NewSmith Capital Partners LLP, an independent partnership providing corporate finance advice and investment management services, for which he manages the Asia Pacific offices, since 2003. He is an owner and director of Cluny Capital Limited (BVI) since 2007. He has also served as Special Advisor to Singapore Telecommunications Limited since October 2021. Prior to founding NewSmith in 2003, he held various positions at Merrill Lynch & Co., including as Senior Vice-President, member of the Executive Management Committee and Chairman for the Asia Pacific Region. Mr. Low also serves as a trustee of the Nanyang Technological University and Singapore London School of Economics Trust. Mr. Low served as a director of Singapore Telecommunications Limited from May 2011 to July 2021 and Neptune Orient Lines Limited from 2011 to 2016. Qualifications : Mr. Low brings global business, business development and strategy, executive leadership and finance/accounting expertise to the Board from his considerable executive management, global business and financial and investment experience, as well as his public company board and committee experience. |
PROPOSAL 1: ELECTION OF DIRECTORS
| | | PROPOSAL 1: ELECTION OF DIRECTORS |
| | | | | | | | | Justine F. Page | | | |
Director sinceSince: 2019
•Audit (Chair)
•Executive
60 | Ms. Page served as Vice President of Finance, Chief Financial Officer and Secretary of Integrated Circuit Systems, Inc. (“ICS”), a publicly-traded timing solutions IC company, from 1999 until its acquisition by Integrated Device Technology, Inc. (“IDT”) in 2005. She also held several leadership positions at ICS, including as Director of Finance and Administration and Assistant Treasurer from 1993 to 1999. She holds a B.A. degree in accounting from Immaculata College and a Master of Taxation degree from Villanova University. Ms. Page served as a director of Broadcom Limited from 2016 to 2017, SunEdison Semiconductor Limited from 2014 to 2016 and Avago Technologies Limited from 2008 to 2016. Qualifications : Ms. Page brings semiconductor, manufacturing/supply chain, cybersecurity, global business, executive leadership and finance/accounting expertise to the Board from serving as Chief Financial Officer of ICS, her leadership positions in finance at semiconductor companies and her education and training in accounting, as well as her public company board and committee experience. |
| | | Henry Samueli, Ph.D. | | | | Chairman of the Board since 2018
Director sinceSince: 2016
•Executive (Chair)
68 | Dr. Samueli served as our as Chief Technical Officer from February 2016 to December 2018. He co-founded Broadcom Corporation and was Chief Technical Officer from its inception in 1991 to 2008 and 2009 to 2016, a technology advisor from 2008 to 2009, and Vice President of Research and Development from 1991 to 2003. He is also the co-owner of the National Hockey League’s Anaheim Ducks since 2005. He is a Professor in the Electrical and Computer Engineering Department at the University of California, Los Angeles since 1985 (on leave of absence since 1995) and a Distinguished Adjunct Professor in the Electrical Engineering and Computer Science Department at the University of California, Irvine since 2003. Prior to Broadcom Corporation, he co-founded and was Chief Scientist at PairGain Technologies from 1988 to 1994. He held various engineering and management positions in the Electronics and Technology Division of TRW, Inc. from 1980 to 1985. He is a Fellow of the Institute of Electrical and Electronics Engineers (IEEE), a Fellow of the American Academy of Arts and Sciences, a Fellow of the National Academy of Inventors and a Member of the National Academy of Engineering. Dr. Samueli served as Chairman and Co-Chairman of the board of Broadcom Corporation from 2011 to 2016 and from 1991 to 2008. Qualifications : Dr. Samueli brings semiconductor, manufacturing/supply chain, technology/innovation, global business, business development and strategy, and executive leadership and finance/accounting expertise to the Board from co-founding Broadcom Corporation and PairGain Technologies, his over 40 years of engineering and management experience in the fields of communications systems and semiconductors, serving as Chief Technical Officer and his understanding of our technologies, business and industry. |
PROPOSAL 1: ELECTION OF DIRECTORS
| | | PROPOSAL 1: ELECTION OF DIRECTORS |
| | | | | | | | | Hock E. Tan | | | |
Director sinceSince: 2006
•Executive
71 | Mr. Tan has served as our President and CEO since March 2006. He was President and Chief Executive Officer at Integrated Circuit Systems, Inc. (“ICS”), a publicly-traded timing solutions IC company, from 1999 until its acquisition by Integrated Device Technology (“IDT”) in 2005. He also served in a number of executive positions at ICS, including as Chief Operating Officer from 1996 to 1999 and Senior Vice President and Chief Financial Officer from 1995 to 1999. He was Vice President of Finance at Commodore International, Ltd. from 1992 to 1994, and held senior management positions at PepsiCo, Inc. and General Motors Corporation. He was also managing director of Pacven Investment, Ltd., a venture capital fund in Singapore, from 1988 to 1992, and was managing director of Hume Industries Ltd. in Malaysia from 1983 to 1988. Mr. Tan was Chairman of the board of IDT, a publicly-traded semiconductor company, following its acquisition of ICS from 2005 to 2008. Qualifications : Mr. Tan brings semiconductor, software/cloud computing, manufacturing/supply chain, technology/innovation, global business, cybersecurity, business development and strategy, executive leadership and finance/accounting expertise to the Board from serving as our President and CEO and President and Chief Executive Officer of ICS and his extensive executive leadership in the technology and semiconductor industry and organizational management, as well as serving as Chairman of the board of IDT. |
PROPOSAL 1: ELECTION OF DIRECTORS | Harry L. You | | | |
Director sinceSince: 2019
•Audit
•Compensation (Chair)
•Executive
63 | Mr. You has served as Co-Chief Executive Officer of dMY Squared Technology Group (“dMY Squared”) since March 2022. He was Chief Financial Officer from September 2016 to August 2019 and President in May 2019 and from September 2016 to February 2019 of GTY Technology Holdings Inc., a software as a service company that offers cloud-based solutions for the public sector. He was Executive Vice President in the Office of the Chairman of EMC Corporation from 2008 to 2016. When Mr. You joined EMC in 2008, he oversaw corporate strategy and new business development, including mergers and acquisitions, joint ventures and venture capital activity. He was Chief Executive Officer from 2005 to 2007 and Interim Chief Financial Officer from 2005 to 2006 of BearingPoint Inc. He was Executive Vice President and Chief Financial Officer of Oracle Corporation from 2004 to 2005. Prior to joining Oracle, he held several key positions in finance, including as Chief Financial Officer of Accenture Ltd. and managing director in the Investment Banking Division of Morgan Stanley. He has also served as a trustee of the U.S. Olympic Committee Foundation since 2016. Mr. You currently serves as a director of Coupang, Inc., Genius Sports Limited, Rush Street Interactive, Inc. and IonQ, Inc. and as Vice Chairman of the board of GTY. Mr. You is also Chairman of the board of dMY Technology Group, Inc. VI and dMY Squared, each a special purpose acquisition company. |
| Mr. You plansserved as Vice Chairman of the board of GTY from February 2019 to reduce the number of boards on which he serves to no more than four other boards by the end of calendar 2022. Mr. You also servedJuly 2022 and as director of Genius Sports Limited from April 2021 to December 2022, Rush Street Interactive, Inc. from September 2019 to June 2022, dMY Technology Group, Inc. II a(a special purpose acquisition company,company) from June 2020 to April 2021, dMY Technology Group, Inc. IV a(a special purpose acquisition company,company) from December 2020 to December 2021, and Korn/Ferry International from 2005 to 2016.
Qualifications : Mr. You brings software/cloud computing, global business, cybersecurity, business development and strategy, executive leadership and finance/accounting expertise to the Board from serving as chief financial officer of multi-national companies, his extensive experience in mergers and acquisitions, financial and strategic planning, public company financial management, cybersecurity and organizational management and his executive leadership positions at various technology-driven companies, as well as his public company board and committee experience. |
Our Board recommends a vote FOR the election of each of the director nominees.
| Broadcom Inc. | | | PROPOSAL 2: RATIFICATION OF AUDITORS21 |
PROPOSAL 2: RATIFICATION OF AUDITORS PROPOSAL 2:
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee is responsible for the appointment, compensation, retention and oversight of the independent auditors retained to audit our consolidated financial statements. The Audit Committee has re-appointedreappointed PricewaterhouseCoopers LLP (“PwC”) as our independent auditorsregistered public accounting firm for Fiscal Year 2022.2023. Our Board and the Audit Committee believe that the continued retention of PwC is in the best interests of Broadcom and our stockholders. We expect a representative from PwC to be present at the Annual Meeting. This representative will have the opportunity to make a statement if the representative so desires and is expected to be available to respond to appropriate questions. Our stockholders are not required to ratify the appointment of PwC as our independent auditors. However, we are submitting the appointment of PwC to our stockholders for ratification as a matter of good corporate practice. In the event of a negative vote, the Audit Committee will reconsider whether or not to continue to retain PwC. Even if the appointment is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of Broadcom and our stockholders. Principal Accounting Fees and Services Set forth below are the fees for all services rendered by PwC to Broadcom for Fiscal Years 20212022 and 2020. | | | | | | | | | | | | | | | | Fiscal Year 2021 | Fiscal Year 2020 | | ($ in thousands) | | Audit Fees | $ | 13,965 | | $ | 16,131 | | | Audit-Related Fees | — | | — | | | Tax Fees | 1,731 | | 2,477 | | | All Other Fees | 24 | | 79 | | | | | | | | Total | $ | 15,720 | | $ | 18,687 | | | | | | |
2021.| | | Fiscal Year 2022 | | Fiscal Year 2021 | | | | | ($ in thousands) | | | Audit Fees | | $ | 14,505 | | | | $ | 13,965 | | | | | Audit-Related Fees | | | — | | | | | — | | | | | Tax Fees | | | 1,460 | | | | | 1,731 | | | | | All Other Fees | | | 24 | | | | | 24 | | | | | Total | | $ | 15,989 | | | | $ | 15,720 | | |
Audit Fees consist of fees billed for professional services provided in connection with the integrated audit of our annual consolidated financial statements, which includes an audit of internal controls over financial reporting, the review of our quarterly consolidated financial statements, and audit services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements for those fiscal years, such as statutory audits, comfort letters and consents. The fees include audit fees related to business combination accounting for our recently closed acquisitions, inclusive of the acquisition of the Symantec Enterprise Security business in Fiscal Year 2020. Tax Fees consist of fees billed for professional services for tax compliance and tax consulting. Corporate tax services encompass a variety of permissible services, including assistance with transfer pricing documentation, expatriate income tax matters, local tax compliance matters, tax audits, and tax credit documentation.All Other Fees consist of fees for professional services rendered by PwC for permissible non-audit services. In Fiscal Years 2021 and 2020, these fees includedservices, which include services for various license and compliance reviews and a license for specialized accounting research software.In considering the nature of the services provided by PwC, the Audit Committee determined that the provision of these services is compatible with maintaining the independence of PwC. The Audit Committee discussed these services with PwC and our management to determine that they are permitted under the rules and regulation concerning independent registered public accounting firms’ independence promulgated by the SEC, as well as by the American Institute of Certified Public Accountants. Other than as stated above, no fees were billed to Broadcom by PwC for Fiscal Years 20212022 and 2020.
2021.| 22 | | | PROPOSAL 2: RATIFICATION OF AUDITORS2023 Proxy Statement |
PROPOSAL 2: RATIFICATION OF AUDITORS Audit Committee Pre-Approval of Services Policy All engagements with our independent registered public accounting firm, regardless of amount, must be authorized in advance by the Audit Committee. The Audit Committee has delegated its pre-approval authority to the Chairperson of the Audit Committee, provided that any matters approved in such manner are presented to the Audit Committee at its next regularly scheduled meeting. Pursuant to the charter of the Audit Committee, committee approval of non-audit services (other than review and attest services) is not required, if such services fall within available exceptions established by the SEC. However, to date, the Audit Committee’s policy has been to approve all services provided by our independent registered public accounting firm. The independent registered public accounting firm and our management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with the Audit Committee’s pre-approval and the fees for the services performed to date. During Fiscal Years 20212022 and 2020,2021, all services provided to Broadcom by PwC were pre-approved by the Audit Committee. Our Board recommends a vote FOR the ratification of appointment of
PricewaterhouseCoopers LLP as ourthe independent registered public accounting firm
of Broadcom for Fiscal Year 2022.
2023.| Broadcom Inc. | | | AUDIT COMMITTEE REPORT23 |
AUDIT COMMITTEE REPORT AUDIT COMMITTEE REPORT The Audit Committee is responsible for assisting the Board with its oversight responsibilities regarding the following: • the quality and integrity of Broadcom’s financial statements and internal controls;
• the appointment, compensation, retention, qualifications and independence of Broadcom’s independent registered public accounting firm;
• the performance of Broadcom’s internal audit function and independent registered public accounting firm;
• Broadcom’s compliance with legal and regulatory requirements; and
• related party transactions.
| • | the quality and integrity of Broadcom’s financial statements and internal controls; | | • | the appointment, compensation, retention, qualifications and independence of Broadcom’s independent registered public accounting firm; | | • | the performance of Broadcom’s internal audit function and independent registered public accounting firm; | | • | Broadcom’s compliance with legal and regulatory requirements; and | | • | related party transactions. |
Fiscal Year 20212022 Financial Statements In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed Broadcom’s financial statements for the fiscal year ended October 31, 2021 (“Fiscal Year 2021”)2022 with Broadcom’s management and PricewaterhouseCoopers LLP (“PwC”).PwC. In addition, the Audit Committee has discussed with PwC, with and without management present, Broadcom’s internal controls over financial reporting and the overall quality of Broadcom’s financial reporting. The Audit Committee also discussed with PwC the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. Based on the Audit Committee’s review and discussions noted herein, as well as such other matters deemed relevant and appropriate by the Audit Committee, the Audit Committee recommended to the Board, and the Board approved, that the audited financial statements for Fiscal Year 20212022 be included in Broadcom’sthe 2022 Annual Report on Form 10-K for Fiscal Year 2021 for filing with the SEC. Independence and Pre-Approval Policy The Audit Committee also received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed the independence of PwC with that firm. The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by Broadcom’s independent registered public accounting firm. For each proposed service, PwC provides the Audit Committee with a description of the service and sufficient information to confirm PwC’s determination that the provision of such service will not impair its independence. The Audit Committee reviewed and pre-approved all audit and non-audit services performed by PwC during Fiscal Year 20212022 in accordance with established procedures. Independent Auditor Tenure and Rotation As part of its auditor engagement process, the Audit Committee considers whether to rotate the independent audit firm. PwC has been Broadcom’s independent auditor since 2006. The Audit Committee believes there are significant benefits to having PwC as its independent auditor. These include: • Higher quality audit work and accounting advice due to PwC’s institutional knowledge of and familiarity with Broadcom’s business and operations, accounting policies and financial systems, and internal control framework.
• Operational efficiencies and a resulting lower fee structure because of PwC’s history and familiarity with Broadcom’s business.
| • | Higher quality audit work and accounting advice due to PwC’s institutional knowledge of and familiarity with Broadcom’s business and operations, accounting policies and financial systems, and internal control framework. | | • | Operational efficiencies and a resulting lower fee structure because of PwC’s history and familiarity with Broadcom’s business. |
In addition, the Audit Committee oversees the process for, and ultimately approves, the selection of the lead audit engagement partner every five years. At the Audit Committee’s instruction, PwC selects candidates to be considered for this role, who are then interviewed by members of Broadcom’s senior management. After discussing the results of senior management’s interviews, the Audit Committee interviews the candidates. The Audit Committee then considers the appointment and votes on the selection. The Audit Committee and the Board approved the selection of PricewaterhouseCoopers LLP as Broadcom’s independent registered public accounting firm for the fiscal year ending October 30, 2022.
Justine F. Page, Chairperson
Gayla J. Delly
Raul J. Fernandez
Harry L. You PROPOSAL 3: APPROVAL OF 2012 STOCK INCENTIVE PLAN PROPOSAL 3:
APPROVAL OF AN AMENDMENT AND RESTATEMENT OF
THE 2012 STOCK INCENTIVE PLAN Overview Our Board is asking our stockholders to approve an amendment and restatement of the 2012 Stock Incentive Plan (the “2012 Plan”) to increase the number of shares of common stock authorized for issuance by 25,000,000 shares and extend the time period for which we may grant incentive stock options to February 6, 2033. On February 6, 2023, our Board approved amending and restating the 2012 Plan, subject to stockholder approval. A copy of the 2012 Plan is attached to this Proxy Statement as Appendix B. The 2012 Plan was originally adopted by the board of directors and shareholders of Broadcom Inc. 23Corporation in 2012. Our Board subsequently amended and restated the 2012 Plan in February 2021 to have terms consistent with good governance and stockholder interests, such as reducing the number of shares of common stock authorized for issuance. The 2012 Plan was last approved by our stockholders on April 5, 2021. Our Board approved amending and restating the 2012 Plan so that we could continue to grant equity awards to eligible participants. Competition for top talent is significant in many locations and the semiconductor and technology industries in which we operate. Granting equity awards is a key factor in attracting, motivating and retaining top talent, and is a common benefit offered by our competitors. We view equity awards as a highly-valued benefit that is necessary for Broadcom to effectively compete with other companies and is critical to our continued success. We believe granting equity awards to a vast majority of our employees is one of the main reasons why our global voluntary attrition rate in Fiscal Year 2022 was approximately 6.5%, which is below the technology industry benchmark (AON, 2022 Salary Increase and Turnover Study — Second Edition, September 2022). Broadcom is different than other companies because we grant equity awards to a vast majority of our employees. It is important to Broadcom that our employees align their interests with our stockholders and share in Broadcom’s success through equity awards. Broadcom also has a history of acquiring companies and businesses. We are proud that many knowledgeable and talented employees from our acquired companies and businesses have decided to join Broadcom. We believe granting equity awards assists in the successful and rapid integration of our employees who join Broadcom through acquisitions, as well as in retaining them. After our 2021 annual meeting, we have granted equity awards to eligible participants only under the 2012 Plan. As of the Record Date, 19,777,761 shares remained available for issuance under the 2012 Plan. The proposed increase in the number of shares of common stock authorized for issuance represents approximately 6.0% of our 416,923,260 shares of common stock outstanding as of January 29, 2023. We expect the number of shares of common stock authorized for issuance under the 2012 Plan will be reduced further in March 2023 due to grants of regular annual equity awards to a vast majority of our employees, including the recipients of the 2019 Multi-Year Equity Awards. In January 2019, we granted the 2019 Multi-Year Equity Awards to a vast majority of our employees, including our executive officers. Because the 2019 Multi-Year Equity Awards vest on the same basis as if four annual equity grants were made on March 15 of each year, beginning in 2019, the recipients of the 2019 Multi-Year Equity Awards have not received regular annual equity awards since 2019. However, the recipients of the 2019 Multi-Year Equity Awards will be eligible to receive equity awards again in March 2023. As such, we believe that it is prudent to replenish the share reserve in the 2012 Plan at this time. The ability to grant equity awards under the 2012 Plan to the recipients of the 2019 Multi-Year Equity Awards is necessary to motivate and retain them and to generate stockholder value. PROPOSAL 3: APPROVAL OF 2012 STOCK INCENTIVE PLAN
Information Regarding Equity Awards under Broadcom’s Equity Plans Outstanding Awards and Share Reserve under the Equity Plans The following table includes information regarding outstanding equity awards (with PSUs included at the maximum performance level) and shares available for future grants under the 2012 Plan, the Avago Technologies Limited 2009 Equity Incentive Plan (the “Avago Plan”) and LSI Corporation 2003 Equity Incentive Plan (the “LSI Plan”) as of January 29, 2023: | | | 2012
Plan | | | LSI
Plan(1) | | | Avago
Plan(2) | | | Total shares underlying outstanding stock options | | 1,575 | | | 1,863 | | | — | | | Weighted average exercise price of outstanding stock options | | $203.16 | | | $47.76 | | | — | | | Weighted average remaining contractual life of outstanding stock options, in years | | 4.87 | | | 3.73 | | | — | | | Total shares underlying outstanding unvested restricted stock, RSUs and PSUs | | 14,130,291 | | | 43,000 | | | 3,479,770 | | | Total shares currently available for grant | | 19,766,027 | | | — | | | — | |
| (1) | Following our 2021 annual meeting, we do not grant equity awards under the LSI Plan. |
PROPOSAL 3: SAY ON PAY | (2) | The Avago Plan expired in 2019. |
Dilution, Burn Rate and Overhang under the Equity Plans Our dilution, burn rate and overhang measurements below are calculated with respect to our equity compensation plans. We granted the 2019 Multi-Year Equity Awards to our employees, including our executive officers, which vest on the same basis as if four annual equity grants were made on March 15 of each year, beginning in 2019. For the burn rate and dilution calculations below, 25% of the 2019 Multi-Year Equity Awards are considered granted in each of Fiscal Year 2019, 2020, 2021 and 2022. Broadcom measures net burn rate as (a) the number of shares subject to equity-based awards (with PSUs included at the maximum performance level) granted under our 2012 Plan, LSI Plan and Avago Plan in a fiscal year (net of cancellations and forfeitures), divided by (b) the weighted average number of shares of common stock outstanding for that fiscal year. Our three-year average annual net burn rate is approximately 1.9%. If we exclude the effects of cancellations and forfeitures, our three-year average annual gross burn rate is approximately 2.5%. Broadcom measures dilution as (a) the total number of shares subject to equity awards outstanding under all of our equity compensation plans (with PSUs included at the maximum performance level) at the end of the fiscal year, divided by (b) the total shares of common stock outstanding at the end of the fiscal year. Our average dilution over the last three fiscal years is approximately 4.3%. | | | Fiscal Year | | | Three-Year Average (Fiscal Years 2020-2022) | | | | | | 2022 | | | 2021 | | | 2020 | | | | | | Stock Options Granted | | 13,463 | | | — | | | 7,501 | | | | | | | RSUs and PSUs Granted | | 10,548,827 | (1) | | 9,882,370 | (2) | | 10,361,745 | (3) | | | | | | Gross Burn Rate | | 2.6 | % | | 2.4 | % | | 2.6 | % | | 2.5% | | | | Options Cancelled/Forfeited | | 8,211 | | | 1,845 | | | 1,651 | | | | | | | RSUs and PSUs Cancelled/Forfeited | | 2,511,792 | (4) | | 2,846,727 | (5) | | 2,099,329 | (6) | | | | | | Net Burn Rate | | 2.0 | % | | 1.7 | % | | 2.1 | % | | 1.9% | | | | Total shares underlying outstanding equity awards | | 17,555,098 | | | 16,944,297 | (7) | | 18,774,448 | (8) | | | | | | Dilution | | 4.2 | % | | 4.1 | % | | 4.6 | % | | 4.3% | | | | Weighted-average common stock outstanding | | 408,827,512 | | | 409,930,111 | | | 401,836,391 | | | | | | | Common stock outstanding | | 417,876,276 | | | 412,870,534 | | | 406,502,394 | | | | | |
| (1) | Includes 7,800,726 shares subject to the 2019 Multi-Year Equity Awards with a vesting commencement date in Fiscal Year 2022. |
PROPOSAL 3: APPROVAL OF 2012 STOCK INCENTIVE PLAN | (2) | Includes 7,800,726 shares subject to the 2019 Multi-Year Equity Awards with a vesting commencement date in Fiscal Year 2021 and does not include 7,800,726 shares subject to the 2019 Multi-Year Equity Awards with a vesting commencement date in Fiscal Year 2022. | | (3) | Includes 7,800,726 shares subject to the 2019 Multi-Year Equity Awards with a vesting commencement date in Fiscal Year 2020 and does not include 15,601,452 shares subject to the 2019 Multi-Year Equity Awards with a vesting commencement date in Fiscal Years 2021 and 2022. | | (4) | Includes 1,377,619 shares subject to the 2019 Multi-Year Equity Awards with a vesting commencement date in Fiscal Year 2022 that were cancelled in Fiscal Years 2019, 2020 and 2021. | | (5) | Includes 880,878 shares subject to the 2019 Multi-Year Equity Awards with a vesting commencement date in Fiscal Year 2021 that were cancelled in Fiscal Years 2019 and 2020 and excludes 496,281 cancelled shares subject to the 2019 Multi-Year Equity Awards with a vesting commencement date in Fiscal Year 2022, which shares are referenced in footnote 4. | | (6) | Includes 277,451 shares subject to the 2019 Multi-Year Equity Awards with a vesting commencement date in Fiscal Year 2020 that were cancelled in Fiscal 2019 and excludes 1,207,314 cancelled shares subject to the 2019 Multi-Year Equity Awards with a vesting commencement date in Fiscal Years 2021 and 2022, of which 603,887 shares are referenced in footnote 4 and 603,427 shares are referenced in footnote 5. | | (7) | Excludes 6,423,107 shares subject to the 2019 Multi-Year Equity Awards with a vesting commencement date in Fiscal Year 2022. | | (8) | Excludes 13,839,236 shares subject to the 2019 Multi-Year Equity Awards with a vesting commencement date in Fiscal Years 2021 and 2022. |
An additional metric that we use to measure the cumulative impact of our equity compensation plans is overhang. Broadcom measures overhang as (a) the number of shares subject to equity awards outstanding (with PSUs included at the maximum performance level) plus the number of shares available for grant, divided by (b) the total shares of common stock outstanding at the end of the year. As of January 29, 2023, our overhang was approximately 9.0%, and the three-year average overhang was approximately 17.4%. However, assuming the 2012 Plan had been approved on January 29, 2023, our overhang would have been approximately 15.0% as of such date. | | | As of January 29, 2023 | | Adjusted for Increase
As of January 29, 2023 | | | Total shares underlying outstanding equity awards | | 17,656,499 | | 17,656,499 | | | Total shares available for grant | | 19,766,027 | | 44,766,027 | | | Common stock outstanding | | 416,923,260 | | 416,923,260 | | | Overhang | | 9.0% | | 15.0% | |
Good Governance Provisions in the 2012 Plan The following is a summary of provisions in the 2012 Plan that reflect good governance and are consistent with stockholder interests: | • | No Evergreen. No “evergreen” share replenishment provision. | | • | No Repricing Without Stockholder Approval. Prohibits repricing of outstanding stock options and stock appreciation rights to a lower exercise price without stockholder approval. | | • | No Dividends Payable on Awards Prior to Vesting. Prohibits payment of dividends or dividend equivalents on an award until it vests, although dividends or dividend equivalents may accrue on unvested awards. | | • | No grants in excess of shares available under the 2012 Plan. Does not allow the granting of awards covering more shares than are then available. | | • | Fair Market Value Grants. The exercise price of a stock option or stock appreciation right may not be less than the fair market value of a share on the date of grant, except when equity awards are assumed or replaced as part of a corporate transaction and the spread between fair market value and exercise price is not increased. | | • | Flexibility to Grant Various Types of Awards; Performance-Based Awards. We may grant stock options, stock appreciation rights, direct stock issuances, restricted stock, RSUs and other stock-based awards, as well as awards that are subject to performance vesting conditions, such as PSUs. |
| • | Specific Limits. We are limited to 4,000,000 shares that may be granted to any participant per calendar year. |
PROPOSAL 3: APPROVAL OF 2012 STOCK INCENTIVE PLAN | • | Double-Trigger Change-in-Control Vesting. Provides for accelerated vesting of outstanding awards only if successor entity fails to assume or replace awards following a change in control, unless otherwise provided for in an award agreement. | | • | No Liberal Change-in-Control Definition. Change-in-control events require consummation of the underlying transaction. |
Summary of the 2012 Plan The following summary of the material provisions of the 2012 Plan is qualified in its entirety by the complete text of the 2012 Plan, a copy of which is attached as Appendix B to this Proxy Statement. Share Reserve Subject to stockholder approval of the 2012 Plan, the total number of shares available for new equity award grants (including incentive stock options) will be increased by 25,000,000 shares. With the proposed increase, the total number of shares available for new equity award grants (including incentive stock options) will be 45,000,000 shares, plus the number of shares subject to unvested equity awards granted under the 2012 Plan prior to April 5, 2021 (which was 20,164,288 shares). The proposed increase represents approximately 6.0% of our 416,923,260 shares of common stock outstanding as of January 29, 2023. As of January 29, 2023, 14,131,866 shares were subject to outstanding equity awards under the 2012 Plan (consisting of 1,575 shares subject to options, 10,874,962 shares subject to RSU awards and 3,255,329 shares subject to PSU awards (assuming maximum performance levels)) and 19,766,027 shares remained available for grant under the 2012 Plan. Any Returning Shares will be available for equity award grants under the 2012 Plan to the extent such shares become available. “Returning Shares” means (i) shares subject to outstanding equity awards under the 2012 Plan that expire or terminate for any reason prior to the issuance of the shares subject to those equity awards, (ii) shares used to pay the exercise price or base price of an equity award and/or shares withheld to satisfy withholding taxes related to the issuance, exercise, vesting or settlement of an equity award, granted under the 2012 Plan, and (iii) unvested shares issued under the 2012 Plan that are cancelled or repurchased by Broadcom pursuant to repurchase rights under the award agreement. Equity awards assumed by Broadcom in connection with a merger, consolidation, stock purchase or similar transaction, or issued by Broadcom in substitution for equity awards granted by another entity in connection with such transaction will not reduce the shares available under the 2012 Plan, nor will shares subject to such assumed or substituted equity awards become available for issuance under the 2012 Plan. No participant in the 2012 Plan may be granted equity awards for more than 4,000,000 shares per calendar year. Eligibility Employees, non-employee directors and consultants in the service of Broadcom or any of its parents or subsidiaries are eligible to participate in the 2012 Plan. As of January 29, 2023, all non-employee directors and approximately 20,000 employees and 70 consultants are eligible to participate in and receive equity awards under the 2012 Plan. Valuation Under the 2012 Plan, the fair market value per share on any relevant date is the closing selling price per share in regular hours trading on the Nasdaq Global Select Market on that date, as reported by Nasdaq. If there is no closing selling price for the shares of Broadcom on the date in question, the fair market value is the closing selling price on the last preceding date for which such price exists. PROPOSAL 3: APPROVAL OF 2012 STOCK INCENTIVE PLAN Equity Incentive Programs The 2012 Plan consists of two equity incentive programs: (i) the discretionary grant program and (ii) the stock issuance program. The principal features of each program are described below. The term Plan Administrator, as used in this summary, means the Compensation Committee or other committee appointed by our Board, which is authorized to administer the discretionary grant and stock issuance programs. Under the 2012 Plan, the independent directors of our Board may serve as the Plan Administrator for awards granted to our CEO and a disinterested majority of our Board must approve discretionary awards granted to directors who serve on the committee acting as the Plan Administrator. Discretionary Grant Program The Plan Administrator can, subject to the terms of the 2012 Plan, determine who receives an equity award under the discretionary grant program, when equity awards are made, the number of shares subject to each award, the applicable vesting and exercisability schedule, the maximum term for each equity award and whether any option is an incentive stock option or a non-statutory option under the federal tax laws. Stock Options. The Plan Administrator will set the exercise price, which must not be less than 100% of the fair market value of the common stock on the grant date, except pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Internal Revenue Code of 1986, as amended (the “Code”), such as assumptions or substitutions of options in connection with certain mergers and acquisitions. No option will have a term in excess of ten years, and each option will generally become exercisable in one or more installments over a specified period of service. However, options may be structured so that they will be immediately exercisable for any or all of the option shares. Any unvested shares acquired under those immediately exercisable options will be subject to repurchase, at the exercise price paid per share, if the participant ceases service with Broadcom prior to vesting in those shares. The exercise price generally may be paid in cash, in shares valued at fair market value on the exercise date or through a sell-to-cover procedure. If a participant ceases service with Broadcom, such participant will have a limited period of time within which to exercise their outstanding options for any shares that are vested and exercisable at the time of such cessation of service. The Plan Administrator has discretion to extend the period during which the outstanding options may be exercised (but not beyond the option term) and/or to permit the option to be exercised with respect to additional shares that would have vested had the participant continued service with Broadcom. Such discretion may be exercised at any time while the options remain outstanding, whether before or after the participant’s actual cessation of service. If the participant ceases service with Broadcom for any reason other than misconduct and the entire exercise period falls within a trading blackout period imposed by Broadcom, the Plan Administrator may permit Broadcom to automatically (i) exercise any unexercised portion of the option on the last business day of the exercise period and (ii) withhold the number of shares having a fair market value equal to the aggregate exercise price and the amount necessary to satisfy any applicable withholding taxes, subject to certain limitations. Stock Appreciation Rights. The Plan Administrator has the authority to issue the following two types of stock appreciation rights under the discretionary grant program: | • | Tandem stock appreciation rights, which provide participants with the right to surrender their options for a payment in an amount equal to the excess of (i) the fair market value of the vested shares subject to the surrendered option over (ii) the aggregate exercise price payable for those shares. The 2012 Plan clarifies that the base price per share of any tandem stock appreciation rights will be set in accordance with the applicable rules for setting the exercise price of the underlying stock option, and tandem rights may not have a term in excess of ten years. | | | |
Standalone stock appreciation rights, which allow participants to exercise those rights as to a specific number of shares and receive in exchange a payment in an amount equal to the excess of (i) the fair market value of the shares as to which those rights are exercised over (ii) the aggregate base price in effect for those shares. The base price per share may not be less than the fair market value per share on the date the standalone stock appreciation right is granted, and the right may not have a term in excess of ten years. PROPOSAL 3: APPROVAL OF 2012 STOCK INCENTIVE PLAN Payments with respect to exercised tandem or standalone stock appreciation rights may, at the discretion of the Plan Administrator, be made in cash or in shares. Upon cessation of service with Broadcom, a participant holding one or more stock appreciation rights will have a limited period within which to exercise those rights as to any shares that are vested and exercisable at the time of such cessation of service. The Plan Administrator has the discretion to extend the period during which the outstanding stock appreciation rights may be exercised (but not beyond the stock appreciation right term) and/or to permit the stock appreciation right to be exercised with respect to additional stock appreciation rights that would have vested had a participant continued service with Broadcom. Such discretion may be exercised at any time while the stock appreciation rights remain outstanding, whether before or after a participant’s actual cessation of service. Repricing. The 2012 Plan does not permit options or stock appreciation rights to be repriced to a lower exercise price without first obtaining stockholder approval, except in connection with certain changes to the capital structure, as explained below under “General Provisions — Changes in Capitalization” or in issuing or assuming a stock option in a transaction to which Section 424(a) of the Code applies or in accordance with the assumption, continuation or replacement of equity awards in connection with a change in control pursuant to the 2012 Plan. Stock Issuance Program Shares may be issued under the stock issuance program for such valid consideration under the General Corporation Law of the State of Delaware as the Plan Administrator deems appropriate, such as cash or past or future services. In addition, shares of restricted stock may be issued that vest in one or more installments over a participant’s period of service or upon attainment of specified performance objectives. Shares may also be issued under such program pursuant to RSUs or other stock-based awards that entitle a participant to receive the shares underlying those awards upon the attainment of designated performance goals, the satisfaction of specified service requirements and/or upon the expiration of a designated deferral period following the vesting of those awards or units, including a deferred distribution date following the cessation of a participant’s service with Broadcom. In the Plan Administrator’s discretion, awards under the stock issuance program may be structured to vest upon a participant’s attainment of retirement eligibility. Alternatively, shares may be fully and immediately vested upon issuance. The Plan Administrator may, subject to the terms of the 2012 Plan, determine who receives an equity award under the stock issuance program, when those equity awards are to be made, the number of shares subject to each equity award, the applicable vesting and issuance schedule for each equity award and the cash consideration (if any) payable per share. The Plan Administrator has the discretionary authority to structure one or more equity awards under the stock issuance program so that the shares will not vest unless performance goals are achieved, including, goals based on total stockholder return. In addition, the performance goals may be based upon the attainment of specified levels of Broadcom’s performance relative to the performance of other entities and may also be based on the performance of any of the business groups or divisions thereof or any parent or subsidiary. Performance goals may include a minimum threshold level of performance below which no award will be earned, levels of performance at which specified portions of an award will be earned, and a maximum level of performance at which an award will be fully earned. The Plan Administrator may provide that, if the actual level of attainment for any performance objective is between two specified levels, the amount of the award attributable to that performance objective will be interpolated on a straight-line basis. The Plan Administrator has the discretionary authority at any time to accelerate the vesting and/or waive the vesting requirements of any and all shares of restricted stock or other equity awards outstanding under the stock issuance program. Outstanding RSUs or other stock-based awards under the stock issuance program will automatically terminate, and no shares will actually be issued and the shares subject to such awards will be surrendered (as applicable) if the performance goals or service requirements established for such awards are not attained, except as otherwise provided above or in the applicable award agreement or unless the Plan Administrator waives such requirements. PROPOSAL 3: APPROVAL OF 2012 STOCK INCENTIVE PLAN General Provisions Change in Control Unless otherwise provided in the applicable award agreement or another applicable agreement, any equity award that is outstanding immediately before a change in control will not vest, lapse (including, without limitation, with respect to forfeiture restrictions or rights of repurchase), and/or become exercisable (as applicable) solely as a result of the change in control, but will instead be assumed, continued, or replaced with a cash retention program that preserves the spread existing at the time of the change in control. The equity awards, so assumed, continued or replaced, will vest, become exercisable, or have any restrictions lapse pursuant to the terms of such equity awards in effect immediately before the change in control, subject to the following conditions. The 2012 Plan specifies that performance-based equity awards (including, without limitation, PSUs) will not be deemed to have been assumed, continued or replaced unless those with performance periods that remain in progress as of the date of the change in control are deemed to have been achieved at one hundred percent (100%) of target levels for the entire performance period (and not pro rata); provided that the performance-based equity awards will continue to be subject to any time-based vesting conditions that were applicable to them before assumption, continuation or replacement. Unless otherwise provided in the applicable award agreement or another applicable agreement, if the Plan Administrator determines the outstanding equity awards are not assumed, continued or replaced in accordance with the 2012 Plan, effective immediately before the change in control but conditioned upon its completion, with corresponding payments made no later than within thirty (30) days following the change in control: All outstanding equity awards under the discretionary grant program will become fully vested and exercisable (as applicable), and if a participant does not exercise all such awards, the Plan Administrator will pay such participant in exchange for the cancellation of each such unexercised award the difference between the per share consideration provided to other similarly situated stockholders in the change in control and the exercise price or base price per share (as applicable), with such payment generally to be made in cash and/or shares at the Plan Administrator’s discretion (less applicable withholding taxes); provided that any such awards for which the exercise or base price (as applicable) exceeds the per share consideration will be cancelled and terminated without payment; All restrictions imposed on equity awards made under the stock issuance program that are not performance-based will lapse and be of no further force and effect, such that all such equity awards will become fully vested, settled (if applicable) and paid generally in cash and/or shares at the Plan Administrator’s discretion; and All performance-based equity awards for which the performance period has been completed as of the date of the change in control but which have not yet been paid will vest and be paid in cash and/or shares at the Plan Administrator’s discretion, with all performance goals to be deemed achieved at actual performance. Further, unless otherwise provided in the applicable award agreement or another applicable agreement, all performance-based equity awards for which the performance period has not been completed as of the date of the change in control will, with respect to each applicable performance goal and other vesting criteria, be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met, and vest and be paid out for the entire performance period (and not pro rata), with the manner of payment to be made generally in cash or shares at the Plan Administrator’s discretion. Stockholder Rights and Option Transferability The holder of an option or stock appreciation right will have no stockholder rights with respect to the shares subject to that option or stock appreciation right unless and until such participant exercises the option or stock appreciation right and becomes a holder of record of the shares distributed upon exercise of such award. Incentive stock options are not assignable or transferable other than by will or the laws of inheritance following the participant’s death, and during the participant’s lifetime, may only be exercised by the participant. However, the Plan Administrator may structure non-statutory options and standalone stock appreciation rights so they may be transferred or assigned during the participant’s lifetime, by gift or pursuant to a domestic relations order, to one or more members of the participant’s family or to a trust established for the benefit of the participant and/or one or more such family members or to the participant’s former spouse. A participant will have the right to vote shares issued to the participant under the stock issuance program, regardless of whether the participant’s interest in those shares is vested. However, a participant will not have the right to vote the shares subject to a RSU or share right award until such award vests and the underlying shares are PROPOSAL 3: APPROVAL OF 2012 STOCK INCENTIVE PLAN issued. Dividend-equivalent units may be credited, either in cash or in actual or phantom shares, on outstanding unvested shares issued under the stock issuance program or RSU or share right awards, subject to such terms and conditions as the Plan Administrator may deem appropriate, provided that any applicable dividend and dividend equivalent amounts with respect to unvested shares or any share underlying any equity award may be accrued but not paid to a participant until all conditions or restrictions relating to such share have been satisfied or lapsed and will be forfeited if all of such conditions or restrictions are never satisfied or lapse. Changes in Capitalization If any change is made to shares by reason of any recapitalization, stock dividend, stock split, combination of shares, exchange of shares, spin-off transaction or other change affecting the outstanding shares as a class without our receipt of consideration or should the value of outstanding shares be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution, appropriate adjustments will be made to (i) the maximum number and/or class of securities issuable under the 2012 Plan, (ii) the maximum number and/or class of securities for which any one person may be granted equity awards under the 2012 Plan per calendar year, (iii) the class of securities and the exercise price or base price per share (or any other cash consideration payable per share) in effect under each outstanding option or stock appreciation right, and (iv) the number and/or class of securities subject to each outstanding RSU or other stock-based award under the 2012 Plan and the cash consideration (if any) payable per share. The adjustments will be made in such manner as the Plan Administrator deems appropriate to prevent the dilution or enlargement of rights and benefits under the 2012 Plan and the outstanding equity awards thereunder, and such adjustments will be final, binding and conclusive. Amendment and Termination Our Board may amend or modify the 2012 Plan at any time, subject to any required stockholder approval. Stockholder approval will be required for any amendment that (i) materially increases the number of shares available for issuance under the 2012 Plan, (ii) materially expands the class of individuals eligible to receive equity awards under the 2012 Plan, (iii) materially increases the benefits accruing to participants under the 2012 Plan or materially reduces the price at which shares may be issued or purchased under the 2012 Plan, (iv) materially extends the term of the 2012 Plan, (v) expands the types of awards available for issuance under the 2012 Plan, or (vi) is otherwise required by applicable law or the requirements of the stock exchange on which the shares are at the time primarily traded. In addition, our Board may not amend the 2012 Plan to remove the requirement for stockholder approval of any form of repricing of stock options or stock appreciation rights. Unless sooner terminated by our Board, the 2012 Plan will terminate on the earliest to occur (i) all shares available for issuance under the 2012 Plan have been issued as fully-vested shares or (ii) the termination of all outstanding equity awards in connection with a change in control. All equity awards outstanding at the time the 2012 Plan terminates will continue in force and effect in accordance with the provisions of the documents evidencing those awards. However, if our stockholders approve the 2012 Plan, no stock options intended to qualify as incentive stock options under Section 422 of the Code, may be granted after February 6, 2033. If our stockholders do not approve the 2012 Plan, no such stock options may be granted after February 5, 2031. New Plan Benefits Future grants under the 2012 Plan will be made at the discretion of the Plan Administrator and, accordingly, are not yet determinable. After the end of Fiscal Year 2022, Broadcom granted Mr. Tan and Dr. Kawwas PSU awards, however, the amount of shares are not determinable as the vesting is contingent on both achievement of formidable stock performance milestones and continued service requirements over a five-year period. Additional information about these PSU Awards are in “Compensation Discussion and Analysis — Fiscal Year 2023 Compensation Actions.” Broadcom also expects to grant each of our non-employee directors re-elected at the Annual Meeting annual RSU awards that have a target value of $250,000 on the date of the Annual Meeting. For additional information about these RSU awards, see “Board of Directors — Director Compensation — Equity Compensation.” Additional Information Regarding Equity Awards Granted under the 2012 Plan A summary of equity awards granted to our NEOs under equity compensation plans, including the 2012 Plan, that were outstanding as of October 30, 2022 is in the “Executive Compensation — Fiscal Year 2022 Outstanding Equity PROPOSAL 3: APPROVAL OF 2012 STOCK INCENTIVE PLAN Awards at Fiscal Year-End Table.” We granted equity awards under the 2012 Plan to our non-employee directors covering an aggregate of 50,857 shares from February 1, 2016 through January 29, 2023. Since February 1, 2016, we granted equity awards under the 2012 Plan covering an aggregate of 47,310,643 shares to employees who are not executive officers and to consultants. This number reflects PSU awards that have vested at actual performance levels and unvested PSU awards assuming target performance levels. Since February 1, 2016, we have granted 13,463 stock options under the 2012 Plan. Further information about historical grants made to our NEOs and non-employee directors can be found in proxy statements filed with the SEC by Broadcom and our predecessors (Broadcom Limited and Avago Technologies Limited). Federal Income Tax Consequences The following discussion summarizes material income tax consequences of the 2012 Plan under current federal income tax law and is intended for general information only. Other federal taxes and foreign, state and local income taxes are not discussed, and may vary depending upon individual circumstances and locality. Moreover, existing law is subject to change by new legislation, new regulations, administrative pronouncements, and court decisions or by new or clarified interpretations or applications of existing laws, regulations, administrative pronouncements and court decisions. Any such change may affect the federal income tax consequences described below. Interested parties should consult their own tax advisors as to specific tax consequences. Option Grants Options granted under the 2012 Plan may be either incentive stock options, which satisfy the requirements of Section 422 of the Code, or non-statutory stock options, which are not intended to meet such requirements. The federal income tax treatment for the two types of options is as follows: | • | Incentive Stock Options. No taxable income is recognized when an incentive stock option is granted or exercised (except for purposes of the alternative minimum tax, in which case taxation is the same as for non-statutory stock options). If the participant exercises the option and then later sells or otherwise disposes of the shares more than two years after the grant date and more than one year after the exercise date, the difference between the sale price and the exercise price will be taxed as capital gain or loss. If the participant exercises the option and then later sells or otherwise disposes of the shares before the end of the two- or one-year holding periods described above, the participant generally will have ordinary income at the time of the sale equal to the fair market value of the shares on the exercise date (or the sale price, if less) minus the exercise price of the option. Any excess of the sales price over the fair market value at the date of exercise will be recognized by the participant as capital gain (long-term or short-term depending on the length of time the shares were held after the stock option was exercised). | | | |
| • | Non-Statutory Stock Options. No taxable income is recognized when a non-statutory stock option is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the excess of the fair market value (on the exercise date) of the shares purchased over the exercise price of the option. Any taxable income recognized in connection with an option exercise by an employee participant is subject to tax withholding by Broadcom. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss. | | | |
| | If the shares acquired upon exercise of the non-statutory option are unvested and subject to repurchase in the event of the participant’s cessation of service prior to vesting in those shares, the participant will not recognize any taxable income at the time of exercise but will have to report as ordinary income, as and when the repurchase right lapses, an amount equal to the excess of (i) the fair market value of the shares on the date the repurchase right lapses over (ii) the exercise price paid for the shares. The participant may elect under Section 83(b) of the Code to include as ordinary income in the year of exercise of the option an amount equal to the excess of (i) the fair market value of the purchased shares on the exercise date over (ii) the exercise price paid for such shares. If such timely Section 83(b) election is made, the participant will not recognize any additional income as and when the repurchase right lapses. |
PROPOSAL 3: APPROVAL OF 2012 STOCK INCENTIVE PLAN Stock Appreciation Rights No taxable income is recognized upon receipt of a stock appreciation right. The participant will recognize ordinary income in the year in which the stock appreciation right is exercised, in an amount equal to the excess of the fair market value of the underlying shares on the exercise date over the base price in effect for the exercised right, and Broadcom will be required to collect certain withholding taxes applicable to such income from the participant. If the stock appreciation right is exercised for stock, any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss. Restricted Stock Unless a participant who receives an award of restricted stock makes an election under Section 83(b) of the Code as described below, the participant generally is not required to recognize ordinary income upon the grant of restricted stock. Instead, on the date the restrictions lapse and the shares vest (that is, become transferable and no longer subject to a substantial risk of forfeiture), the participant will be required to recognize ordinary income in an amount equal to the excess, if any, of the fair market value of the shares on that date over the amount, if any, paid for those shares. If a participant makes a Section 83(b) election to recognize ordinary income on the date the restricted shares are granted, the amount of ordinary income required to be recognized is equal to the excess, if any, of the fair market value of the shares on the date of grant over the amount, if any, paid for those shares. In that case, the participant will not be required to recognize additional ordinary income when the restrictions lapse and the shares vest. Direct Stock Issuances The participant will recognize ordinary income in the year in which shares are actually issued to the participant. The amount of that income will be equal to the fair market value of the shares on the date of issuance less the amount, if any, paid for those shares, and Broadcom will be required to collect certain withholding taxes applicable to such income from the participant. RSUs and Other Stock-Based Awards A participant generally is not required to recognize income upon the grant of a RSU or other stock-based award, including PSU awards. When such awards vest, the participant will be required to recognize ordinary income in an amount equal to the fair market value of the shares that vest. Broadcom will be required to collect certain withholding taxes applicable to such ordinary income from the participant. Upon the sale of any shares that are delivered to the participant pursuant to an award, the participant will realize either long-term or short-term capital gain (or loss), depending on how long the shares were held, equal to the difference between the amount realized and the fair market value of the shares on the date the shares were vested or delivered to the participant pursuant to the award. General Tax Effect for Broadcom Broadcom is generally entitled to a tax deduction in connection with an equity award under the 2012 Plan in an amount equal to the ordinary income realized by a participant and at the time the participant recognizes such income (for example, upon the exercise of a non-statutory stock option). Moreover, if a participant recognizes ordinary income due to a disqualifying disposition of an incentive stock option, Broadcom will generally be entitled to a deduction in the same amount. Impact of Section 409A of the Code The 2012 Plan, as well as payments and benefits under the 2012 Plan, are intended to be exempt from, or to the extent subject thereto, to comply with Section 409A of the Code, and, accordingly, to the maximum extent permitted, the 2012 Plan will be interpreted in accordance therewith. We make no representations that any or all payments or benefits described the 2012 Plan will be exempt from or comply with Section 409A of the Code and make no undertaking to preclude Section 409A of the Code from applying to any such payment. The optionee or the participate will be solely responsible for the payment of any taxes and penalties incurred under Section 409A of the Code. PROPOSAL 3: APPROVAL OF 2012 STOCK INCENTIVE PLAN Required Vote We believe strongly that the approval of the 2012 Plan is important to Broadcom’s continued success. Such approval will enable Broadcom to attract, motivate and retain individuals who are critical to the success of Broadcom. The affirmative vote of a majority of votes represented and entitled to vote at the Annual Meeting is required to approve the 2012 Plan. For the effects of abstentions and broker non-votes on this Proposal 3, see “Additional Meeting Information—Board Recommendations, Required Vote and Effects of Abstentions and Broker Non-Votes.” Our Board recommends a vote FOR approval
of an Amendment and Restatement of the 2012 Stock Incentive Plan. PROPOSAL 4: SAY ON PAY PROPOSAL 4: ADVISORY VOTE TO APPROVE COMPENSATION OF
OUR NAMED EXECUTIVE OFFICERS OFFICER COMPENSATIONIn accordance with the requirements of Section 14A of the Exchange Act, we are asking stockholders to approve, on an advisory basis, the compensation of our NEOs as described in the “ Compensation Discussion and Analysis” and the compensation tables and accompanying narrative disclosure under “Executive Compensation” in this Proxy Statement. We currently hold the say-on-pay vote annually and expect the next say-on-pay vote will occur at the 20232024 annual meeting of stockholders. OurOur executive compensation program structured around the achievement of near-termis based on challenging and rigorous short-term financial and operational targets and longer-termlong-term business objectives and strategies, and is designed to reward our executive officers for producing sustainable growth and to align their interests with the long-term interests of our stockholders, as well as attract and retain top talent. When setting financial and operational targets for the short-term incentives and performance goals for the long-term incentives, the Compensation Committee judiciously determines, in consultation with its independent compensation consultant, the target levels and peer index that would significantly enhance stockholder value, be difficult to attain and require substantial effort to achieve by our executive officers. For Fiscal Year 2021,2022, we increased revenue by 15%21% and operating income by 112%, and our total shareholder return increased by nearly 57%67%. We believe the compensation paid to our NEOs for Fiscal Year 20212022 appropriately reflects and rewards our executive officers’ contributions to Broadcom’s strong performance despite the on-going COVID-19 pandemic and the continued disruption in normal business activities, including the ongoing supply chain constraints, and is aligned with the long-term interests of our stockholders. Consistent with our previous commitment, we did not grant regular annual equity incentive awards to Ms. Spears, Messrs. Brazeal and Krause, and Dr. Kawwas in Fiscal Year 20212022 because they were granted multi-year equity awards in January 2019. 2019 Multi-Year Equity Awards.Stockholders are being asked to approve the following resolution: “RESOLVED THAT stockholders approve, on an advisory basis, the compensation of Broadcom’s named executive officers, as disclosed in “ Compensation Discussion and Analysis” and in the compensation tables and accompanying narrative disclosure under “Executive Compensation” in this Proxy Statement.”In deciding how to vote on this proposal, stockholders are encouraged to read the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this Proxy Statement.While the vote on this resolution is advisory and not binding, the Compensation Committee and our Board values input from stockholders and will consider the outcome of the vote on this resolution when considering future executive compensation decisions. Our Board recommends a vote FOR approval ofthe named executive officer compensation on an advisory basis.PROPOSAL 5: SAY ON PAY PROPOSAL 5: ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION In accordance with the U.S. Dodd-Frank Act of 2010, we are asking stockholders to approve, on an advisory basis, the frequency with which stockholders would have an opportunity to provide an advisory vote to approve the compensation of named executive officers. Stockholders have the option of selecting a frequency of one, two or three years, or abstaining. Our Board believes that holding an advisory vote on named executive officer compensation every year continues to be appropriate for Broadcom. This will enable our stockholders to vote, on an advisory basis, to approve the most recent compensation information that is presented in our proxy statement, leading to a more meaningful and coherent communication between us and our stockholders on the compensation of our named executive officersofficers. While the vote on this resolution is advisory and not binding, the Compensation Committee and our Board values input from stockholders and will consider the outcome of the vote on this resolution when determining how often stockholders will be asked to vote, on an advisory basis.
basis, on named executive officer compensation.Our Board recommends a vote for 1 YEAR with respect to the frequency of
the advisory vote on named executive officer compensation. | Broadcom Inc. | | | COMPENSATION DISCUSSION AND ANALYSIS37 |
COMPENSATION DISCUSSION AND ANALYSIS
COMPENSATION DISCUSSION AND ANALYSIS The following Compensation Discussion and Analysis (the “CD&A”) describes the philosophy, objectives and structure of our Fiscal Year 20212022 executive compensation program. This CD&A is intended to be read in conjunction with the tables and other information beginning on page 4558, which provide further historical compensation information for our NEOs, who are our CEO, CFO and three other most highly compensated executive officers serving at the end of Fiscal Year 2021. .Our NEOs for Fiscal Year 20212022 were: • | • | Hock E. Tan, President and Chief Executive Officer | | • | Kirsten M. Spears, Chief Financial Officer and Chief Accounting Officer | | • | Mark D. Brazeal, Chief Legal and Corporate Affairs Officer | | • | Charlie B. Kawwas, Ph.D., President, Semiconductor Solutions Group | | • | Thomas H. Krause, Jr., Former President, Broadcom Software Group |
Executive Officer • Kirsten M. Spears, Chief Financial Officer and Chief Accounting Officer
• Mark D. Brazeal, Chief Legal and Corporate Affairs Officer
• Charlie B. Kawwas, Ph.D., Chief Operating Officer
• Thomas H. Krause, Jr., President, Broadcom Software Group
Executive Summary:
Fiscal Year 2021 Company Performance and Key Pay Decisions
Despite the on-going COVID-19 pandemic and challenges to our business, our Fiscal Year 2021 performance continued to be strong. SummaryOur executive compensation program is structured around the achievement of near-termbased upon challenging and rigorous short-term financial and operational performance targets and longer-termcombined with long-term business objectives and strategies.strategies to create sustained stockholder value. We believe in rewardingprovide above-market pay opportunities for excellent performance and reflectingappropriately adjust for underperformance, if that occurs. We seek to closely align our executive officers’ interests with those of our stockholders and, accordingly, allocateby allocating a significant portion of our executives’ compensation opportunity to RSUs, the value of which fluctuates based onvariable compensation tied to our financial and strategic performance, our stock price value or both. Fiscal Year 2022 Performance Financial Results Highlights Our performance in Fiscal Year 2022 continued to be strong despite the on-going impact of the COVID-19 pandemic, supply chain challenges and other performance-based compensation, which is dependent on our TSR performance relative to thatmacroeconomic uncertainties. Highlights of our peers and our financial performance. Our Fiscal Year 2021 Performance
Financial Results Highlights
Our Fiscal Year 2021 financial results highlights* include increases in:
• Year-over-year revenue to $27,450 million, 15% above Fiscal Year 2020.
• GAAP operating income to $8,519 million, 112% above Fiscal Year 2020; and non-GAAP operating income to $15,912 million, 23% above Fiscal Year 2020.
• Net cash provided by operating activities to $13,764 million, 14% above Fiscal Year 2020; and free cash flow to $13,321 million, 15% above Fiscal Year 2020.
include: | • | Increased year-over-year revenue to $33,203 million, 21% above Fiscal Year 2021. | | • | Increased GAAP operating income to $14,225 million, 67% above Fiscal Year 2021; and increased non-GAAP operating income* to $20,294 million, 28% above Fiscal Year 2021. | | • | Increased net cash provided by operating activities to $16,736 million, 22% above Fiscal Year 2021; and increased free cash flow* to $16,312 million, 22% above Fiscal Year 2021. |
Revenue (in billions) | Operating Income (in billions) | Free Cash Flow (in billions) |  |  |  |
*See Appendix A for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.
| 38 | | | COMPENSATION DISCUSSION AND ANALYSIS2023 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
Return of Capital to StockholdersOur strong cash flow in Fiscal Year 20202021 enabled us to return an aggregate of $7,511$14,032 million to our stockholders during Fiscal Year 2021,2022, consisting of $6,212$7,032 million in cash dividends and $1,299$7,000 million under our stock repurchase program. We also paid $1,455 million for the elimination of shares withheld to cover employee withholding taxes due upon the vesting of net settled equity awards. In addition, our strong free cash flow in Fiscal Year 20212022 enabled us to increase our quarterly common stock dividend to $4.10$4.60 per share in the first quarter of our Fiscal Year 2022,2023, an increase of 14%12% over the quarterly dividend paid in Fiscal Year 2021. | | | | | | | | | | | | | | | | Dividend Increase YoY% | 23% | | 11% | |
Total Stockholder Return Our five-year TSR performance, based on an investment of $100 in Broadcom common stock on the last trading day of our fiscal year 2016, 2017 and assuming reinvestment of dividends, has been very strongsubstantial on both an absolute and relative basis.basis, returning $222 on a $100 investment. Although our one-year TSR increased significantly, we believe long-term TSR isdecreased as a more relevant measure, as our stock price over short periods is frequently impacted byresult of broader market volatility and macroeconomic events unrelated to our underlying performance. As Illustrated in the graph below:
• Our one-year TSR increased by 56.8% induring Fiscal Year 2021.
• Our TSR increased by 34.0% annually on average over the past three fiscal years, and by 25.7% annually on average over the past five fiscal years.
• Our TSR for all three of these periods2022, we still outperformed our peer group median and the S&P 500 Index.as shown below.• We significantly increased our absolute TSR since our initial public offering in 2009 by over 4,003%, with an annual average increase of 35.5%.
 | | Our one-, three- and five-year TSR outperformed our peer group median and the S&P 500 Index. | COMPENSATION DISCUSSION AND ANALYSIS | Our TSR increased by 21.1% annually on average over the past three fiscal years and by 17.3% annually on average over the past five fiscal years. |  | We significantly increased our absolute TSR since our initial public offering in 2009 by over 3,700%, with an annual average increase of 31.8%. |
Stockholder Engagement
During Fiscal Year 2021, our Lead Independent Director and chairperson ofSay-on-Pay At the Compensation Committee, along with our Chairman of the Board and members of management, engaged with2022 annual meeting, our stockholders and obtained feedback onshowed support of our executive compensation program. This resulted in discussionsprogram, with our largest stockholders on a variety of executive compensation related topics, including the proposed amendment and restatement of our 2012 Plan, executive management promotions and long-term incentive compensation. Say-on-Pay
At the 2021 annual meeting, we submitted the compensation of our NEOs to a non-binding, advisory vote of our stockholders (the “say-on-pay proposal”). Stockholders representing 95%approximately 80% of the shares present and voting on the matter werevotes cast in favor of the non-binding, advisory say-on-pay proposal. In lightCOMPENSATION DISCUSSION AND ANALYSIS Fiscal Year 20212022 Compensation Highlights Annual Cash Incentive Bonus Payouts Reflectfor Fiscal Year 20212022 Company Performance Payouts under the APB Plan were tied to challenging and rigorous pre-established annual corporate and divisional performance goals, as well as the individual contributions and performance of each executive. The APB Plan payouts reflected the following considerations: • The Compensation Committee set the two Fiscal Year 2021 corporate performance goals – revenue and adjusted non-GAAP operating margin (as defined in “Elements of Executive Compensation – Annual Cash Incentive Bonus Plan” below) – at target attainment levels that would potentially enhance stockholder value and require substantial effort to achieve. Both the revenue and adjusted non-GAAP operating margin targets were set significantly above our Fiscal Year 2020 actual performance. The divisional performance goals were also set at levels difficult to attain by the division and the NEO in charge of the division.
• Our Fiscal Year 2021 revenue, which increased 15% over Fiscal Year 2020, and our adjusted non-GAAP operating margin both exceeded the maximum attainment levels, resulting in 150.0% attainment of the corporate performance goals under the APB Plan.
• The divisional performance goals unrelated to revenue and operating margin exceeded target performance levels. This combined with the attainment of our corporate goals resulted in payouts for all eligible employees under both our executive and employee APB plans.
• The Compensation Committee considers our CEO’s recommendations (other than with respect to himself) and judiciously applies individual performance multipliers to recognize the extraordinary efforts of our executives and exceptional performance with respect to our corporate performance goals and divisional results.
• The Compensation Committee (and the independent directors in the case of our CEO) carefully assessed the extraordinary efforts of our executive officers and our significant increase in revenue and adjusted non-GAAP operating margin year-over-year despite the challenges of the COVID-19 pandemic, macroeconomic uncertainty and supply chain constraints. Based on the assessment, our NEOs received individual performance multipliers of 100% to 150%. Our CEO (upon approval of the independent directors) received an individual performance multiplier of 150%, resulting in a payout of 225% of his target bonus.
| • | The Compensation Committee set two challenging and rigorous Fiscal Year 2022 corporate performance goals – revenue and adjusted non-GAAP operating margin as a percentage of revenue (“adjusted non-GAAP operating margin”) – at target attainment levels that would enhance stockholder value and require substantial effort to achieve. | | • | Our NEOs achieved the maximum attainment level for the corporate performance goals despite headwinds from macroeconomic volatility, resulting in 150% attainment of the corporate performance goals under the APB Plan. | | • | The divisional performance goals unrelated to revenue and operating margin exceeded target performance levels. | | • | Our NEOs also exerted significant efforts in our pending acquisition of VMware, Inc. (“VMware”). | | • | | COMPENSATION DISCUSSION AND ANALYSISBased on careful assessment by the Compensation Committee (and the independent directors in the case of our CEO), our NEOs received individual performance multipliers between 120% and 150%. |
Compensation Changes in Connection with Promotions
Ms. Spears, Dr. Kawwas and Mr. Krause were promoted and assumed broader responsibilities to ensure the long-term stability of our leadership and culture. Their new roles are CFO, Chief Operating Officer and President, Broadcom Software Group (which was previously known as the Infrastructure Software Group), respectively.
The Compensation Committee approved the following changes in recognition of the competitive talent market and the executives’ increased responsibilities.
• Ms. Spears, Dr. Kawwas and Mr. Krause received base salary increases effective December 10, 2020.
• Ms. Spears’ APB Plan bonus target percentage was increased to 100% of eligible earnings effective December 10, 2020.
• The performance goals under the APB Plan for Dr. Kawwas and Mr. Krause were changed to the attainment of overall corporate goals instead of divisional performance goals effective December 10, 2020.
• Ms. Spears, Dr. Kawwas and Mr. Krause were granted promotion equity incentive awards for their increased responsibilities due to their promotions that were not anticipated when they were granted the 2019 Multi-Year Equity Awards. These promotion equity incentive awards consist of 50% service-based RSU awards and 50% PSU awards at target.
The aggregate target market value of each of the promotion equity incentive awards for Dr. Kawwas and Mr. Krause that the Compensation Committee approved was $15,000,000; however, the value of each of these promotion equity incentive awards in the “Fiscal Year 2021 Summary Compensation Table” below is $20,115,046 because it is the accounting grant date fair value under ASC 718 on April 5, 2021, when the stockholders approved the 2012 Plan and the actual grant date for accounting purposes. The factors provided below in the “Equity Awards Granted in Fiscal Year 2021” section explain the difference between the target market value approved by the Compensation Committee and the accounting grant date fair value.
See the “Elements of Executive Compensation – Long-Term Incentive Compensation” section below for more information relating to these awards.
There were no other increases to NEO base salaries orour NEOs’ target bonus opportunities in Fiscal Year 2021. Further,2022. Ms. Spears, Dr. Kawwas and Messrs. Brazeal and Krause and Dr. Kawwas were not granted regular annual equity incentive awards in Fiscal Year 2021 because of2022 due to their previously granted 2019 Multi-Year Equity Awards. PSU Grant for our Awards that covered regular annual equity incentive awards through Fiscal Year 2022.CEO Mr. Tan received Equity Incentive AwardsThe independent directors, in consultation with its independent compensation consultant, granted an annual PSU award due to the importance of his continued commitment, hisMr. Tan to incentivize and encourage Mr. Tan’s retention in a highly competitive talent market and to recognize his invaluable leadership in continuedincreasing stockholder value creation. Absent this award,and furthering our corporate strategy. Mr. Tan would not have had any unvested equity awards after June 2021.was also granted a separate, smaller in size strategic PSU award to reward achievement of specific strategic priorities in Fiscal Year 2022 that went beyond the standard day-to-day operations responsibilities and were critical in a year when there were expectations of a possible realignment in the global markets and increased macroeconomic uncertainties. See the “ Elements of Executive Compensation – Long-Term Incentive Compensation” section below for more information relating to this award.these awards.Promotion Equity Incentive Awards In December 2021, Mr. Brazeal was promoted and assumed responsibilities as our Chief Corporate Affairs Officer in addition to his continuing Chief Legal Officer responsibilities. The Compensation Committee granted Mr. Brazeal equity incentive awards solely in connection with his promotion and increased responsibilities. See the “Elements of Executive Compensation – Long-Term Incentive Compensation” section below for more information relating to these awards. Overview of Our Executive Compensation Program The Compensation Committee believes that, in general, about halfa significant portion of our executive officers’, and more of our CEO’s, target total direct compensation should be dependent upon our performance.comprised of performance-based incentives. Accordingly, our executive compensation program is designed to reward our executive officers for producing sustainable growth in stockholder value consistent with our strategic plan, align theirthe interests of our executive officers with the interests of our stockholders, and attract and retain top talent. 28 2022| 40 | 2023 Proxy Statement
| | | COMPENSATION DISCUSSION AND ANALYSIS |
COMPENSATION DISCUSSION AND ANALYSIS Target Total Direct CompensationOur annual total direct compensation consists of three principal elements: | | | | | | | Base Salary | Individual salaries reflect the executive’s responsibilities and sustained individual performance. Salaries are set to be competitive with market and industry norms. | Short-Term
Incentives (STI)
| The APB Plan is intended to reward the achievement of pre-established annual corporate and divisional performance goals, as well as the individual contributions and performance of each executive.
In Fiscal Year 2021,2022, our corporate performance goals were (i) revenue and (ii) adjusted non-GAAP operating income as a percentage of revenue.income. Pre-established attainment levels are designed to significantly enhance stockholder value, to be difficult to attain, and to require substantial effort to achieve. | Long-Term
Incentives (LTI)
| RSU awards and PSU awards are granted to encourage and reward the efforts of our executives to grow sustainable, long-term stockholder value. These equity awards further encourage retention and mitigate compensation-related risks.risks with related ownership guidelines. |
The following charts compare the Fiscal Year 20212022 target total direct compensation for our CEO and our other NEOs. NEOs, except for Mr. Krause who resigned in July 2022. Mr. Krause did not receive any severance or bonus payments and forfeited all outstanding, unvested equity awards in connection with his resignation. Target total direct compensation consists of (i) base salary, (ii) target STI through the APB Plan, and (iii) target LTI in the form of equity awards comprised of service-based RSU awards and PSU awards based on the fair market value of the awards on the grant date, or the effective date, as the case may be. As shown in the charts below, approximately 95% of our NEOs’ target total direct compensation in Fiscal Year 2021 is comprised of variable compensation elements. The CEO chart includes Mr. Tan’s Fiscal Year 2021 PSU award based on its fair market value on the December 15, 2020 effective date and assuming target performance.
performance, as applicable.The Average Other NEO chart includes the equity awards granted in connection with the promotion of three NEOs: (i) the service-based RSU awards and PSU awards granted to Ms. Spears, assuming target performance, and (ii) the annualized value of the service-based RSU awards and PSU awards, which vests over three years, granted to Dr. Kawwas and Mr. Krause, in each case based on the fair market value on the December 15, 2020 effective date and assuming target performance. In addition, the Other NEO chartalso includes the portion of the 2019 Multi-Year Equity Awards granted to the NEOs other than our CEO in January 2019 that began vesting in March 2021,2022 based on the fair market value on the January 2019 grant date fair market value and assuming target performance. The 2019 Multi-Year Equity Awards vest on the same basis as if four annual equity grants were made on March 15 each year, beginning in 2019 for four successive years.
As shown in the charts below, over 95% of our CEO’s and 90% of our other NEOs’ average target total direct compensation in Fiscal Year 2022 is comprised of variable, performance-based compensation. | CEO FY 2022 Target Pay Mix | Average Other NEO FY 2022 Target Pay Mix |  |  |
| Broadcom Inc. | | | COMPENSATION DISCUSSION AND ANALYSIS41 |
COMPENSATION DISCUSSION AND ANALYSIS Executive Compensation Program GovernanceThe table below highlights our key executive compensation program governance practices. | | | | | | | | | | | | Best Practices We Employ | | Practices We Do Not Employ | | ü | Majority of NEO compensation tied to long-term performance | X | No excessive risk taking in incentive plan designs | | ü | Performance metrics directly tied to value creation for stockholders | X | No re-pricing of underwater stock options without stockholder approval | | ü | Caps on cash and equity incentive plan payouts
| X | No excise tax gross-ups | | ü | Annual risk assessment of compensation programs
| X | No supplemental retirement or pension benefits | | ü | Engagement of an independent compensation consultant | X | No guaranteed bonuses | | ü | CEO compensation reviewed and approved by the independent directors | X | No “single trigger”trigger” change in control payments or benefits | | ü | StockRobust stock ownership guidelines for all executive officers and directors (see page 7) | X | No perquisites, other than in modest amounts | ü | Anti-hedging and anti-pledging policy forhedging or pledging of stock by employees and directors (see page 7) | | |
Compensation Philosophy and Objectives Our executive compensation program is designed to achieve the following: • attract qualified, experienced and talented executives in a highly competitive market;
• retain, motivate and reward these executives, whose skills, knowledge and performance are critical to our on-going success;
• encourage our executives to focus on the achievement of our corporate financial and operational performance goals by aligning their APB Plan payout to the achievement of pre-established annual corporate and divisional goals, as well as the individual contributions and performance of each executive; and
• align our executives’ interests with our stockholders interests by linking a significant portion of each executive’s target total direct compensation opportunity to stockholder returns in the form of PSUs that are subject to the attainment of pre-established performance-based objectives, and the rest in the form of service-based RSUs, the value of which fluctuates based on our stock price.
| • | attract qualified, experienced and talented executives in a highly competitive market; | | • | retain, motivate and reward these executives, whose skills, knowledge and performance are critical to our on-going success; | | • | encourage our executives to focus on the achievement of our rigorous corporate financial and operational performance goals by aligning their APB Plan payout opportunities to the achievement of pre-established annual corporate and divisional goals, as well as the individual contributions and performance of each executive; and | | • | align our executives’ interests with our stockholders interests by linking a significant portion of each executive’s target total direct compensation opportunity to stockholder returns in the form of PSUs that are subject to the attainment of pre-established performance-based objectives, and the rest in the form of RSU awards, where the delivered value fluctuates based on our stock price. |
Equity awards are a long-term retention tool for our key executives. When granting equity awards or when recommending to the independent directors an equity award grant to our CEO, the Compensation Committee considers each executive’s level ofrole, responsibilities, experience and expertise and overall value to Broadcom, as well as how much vested and unvested equity the executive then holds. holds as an indicator of retention risk.The Compensation Committee has adopted a compensation philosophy that is designed to keep our executives’ target total direct compensation competitive with the compensation of executives in comparable positions at other companies in our compensation peer group and third-party market pay surveys. Generally, target total cash compensation falls below the median of the competitive market, but in combination with equity, target total direct compensation may be higher. The Compensation Committee bases its decisions on the needs of Broadcom and an executive’s level of sustained performance, expertise, experience, marketability and internal equitability. While the Compensation Committee and our Board generally consider the accounting and tax implications of their executive compensation decisions, neither element has been a material consideration in the compensation awarded to our NEOs historically. COMPENSATION DISCUSSION AND ANALYSIS Say-on-Pay The Compensation Committee values the input received from our stockholders. Each year we engage with our stockholders and obtain feedback on our executive compensation program. At the 2022 annual meeting, our stockholders showed support of our executive compensation program, with approximately 80% of the votes cast in favor of the non-binding, advisory say-on-pay proposal. In Fiscal Year 2021,2022, we contacted stockholdersstockholders beneficially owning over 60%50% of our then outstanding shares of common stock and engaged with stockholders owning over 57% ofapproximately 49% of our then outstanding stock. Our Lead Independent Director and our chairperson of the Compensation Committee, along with our Chairman of the Board and members of management, participated in these engagements and discussed a variety ofcorporate governance, ESG initiatives, executive compensation, related topics, including the
| | | COMPENSATION DISCUSSION AND ANALYSIS |
proposed amendment and restatement of our 2012 Plan, executive management promotions and long-term incentive compensation.
compensation, and succession planning.These stockholders indicated that they continue to be generally supportive of our executive compensation actions and decisions and overall program design. The feedback received from our stockholders was reported by our Lead Independent Director and our chairperson of the Compensation Committee to both the full Compensation Committee and the Board. BoardCompensation Determination Process Role of the Compensation Committee The Compensation Committee devotes significantextensive time throughout the year to our executive compensation program to ensure that it aligns executive pay with corporate performance and incentivizesrewards our executives to pursuefor pursuing corporate financial, operational and strategic goals that will create sustainable, long-term stockholder value. The Compensation Committee reviews and approves the compensation of our key executives, except our CEO, for whom the Compensation Committee makes recommendations for review and approval by the independent directors of our Board. directors.Individual Executive Compensation Assessment . In addition to market compensation data provided by its compensation consultant, the Compensation Committee (and, in the case of our CEO, the independent directors) considers the following information, among other factors, for each executive when determining his or her compensation: •current base salary, target APB Plan opportunities (and prior fiscal year payouts), the accumulated value of outstanding and unvested equity awards and other benefits;
•the individual’s overall performance, as well as the importance of the role, the individual’sresponsibilities, knowledge, and skills, to Broadcom, the individual’s leadership within Broadcom and the individual’s contributions to Broadcom’s values and culture; and
•our CEO’s recommendation on compensation and individual performance (other than for himself).
This information helps the Compensation Committee and the independent directors to understand the long-term retentive elements and total compensation delivered to our executives. Internal Pay Parity .Parity. While we do not maintain a formal policy regarding internal pay parity, it is often considered by the Compensation Committee and the independent directors when determining compensation.Consistent with market practice, our CEO is compensated at a higher level than our other executives due to his higher level of responsibility, accountability and experience. Given Mr. Tan’s responsibility for our overall performance, the independent directors believe that compensating him at a higher level than our other executives and weighting his total compensation more heavily toward long-term, performance-based incentive compensation is consistent with market practice, appropriately reflects his contributions and directly aligns his incentives with the interests of our stockholders. Accordingly, Mr. Tan receives more of his target total direct compensation in the form of LTI compensation through PSU awards as compared to our other executives. COMPENSATION DISCUSSION AND ANALYSIS Compensation Risk Oversight. Oversight.While our Board has overall responsibility for risk oversight, the Compensation Committee annually reviews and discusses the risks that relate to all of our compensation policies and practices, including incentive and commission arrangements below the executive level. The Compensation Committee does not believe that our compensation policies or practices create potential material market risk for Broadcom. Role of Compensation Consultant In Fiscal YearDecember 2021, the Compensation Committee retained Meridian as its independent compensation consultant to assume the role previously held by Compensia, Inc. (“Compensia”). Meridian provided consulting services to the Compensation Committee and the independent directors, including assessments of executive and non-employee director compensation based on analyses of competitive market compensation data. In addition, the Compensation Committee relied on CompensiaMeridian for periodic updates on regulatory developments and market trends related to executive and non-employee director compensation matters. CompensiaMeridian did not provide any other services to Broadcom except advising the Compensation Committee and the independent directors on executive and non-employee director compensation-related matters. The Compensation Committee has assessed the independence of CompensiaMeridian pursuant to the six independence factors set forth in the SEC and Nasdaq rules and concluded that CompensiaMeridian was independent and its work for the Compensation Committee did not raise any conflict of interest.
| | | COMPENSATION DISCUSSION AND ANALYSIS |
Compensation Competitive Analysis The Compensation Committee works with its independent compensation consultant to develop a meaningful compensation peer group for purposes of understanding competitive market compensation practices. This peer group is annually reviewed and updated annually as necessary. The peer group is used for comparative purposes only. The Compensation Committee does not benchmark any pay elements or target total direct compensation to a specific percentile. In the absence of relevant peer group data, the Compensation Committee reviews industry-based market pay survey data (“market survey data”), such as the Radford Global Compensation Database Survey and Mercer High Tech Salary Survey (Asia).In October 2020,August 2021, the Compensation Committee approved the compensation peer group for Fiscal Year 2021,2022, which appears below and was developed in consultation with Compensia. The following selection criteria were considered as guidelines when developing the compensation peer group:
•Revenues: comparability across annual revenue, generally 0.5 to 2.0 times that of Broadcom;
•Market capitalization: market capitalization that generally fall between 0.3 to 3.0 times that of Broadcom; and
•Industry: companies in semiconductor-related and other technology-focused industries having a similar scale.
| | | | | | | | | | | | Fiscal Year 2021 Peer Group | 3M Company | Cisco Systems, Inc. | International Business Machines Corporation | PayPal Holdings, Inc. | Adobe, Inc. | Danaher Corporation | Mastercard, Inc. | Qualcomm Inc. | Applied Materials, Inc. | Dell Technologies, Inc. | Micron Technology, Inc. | Salesforce.com, Inc. | Automatic Data Processing, Inc. | Honeywell International, Inc. | NVIDIA Corporation | Texas Instruments, Inc. | Booking Holdings | Intel Corporation | Oracle Corporation | Thermo Fisher Scientific, Inc. |
| | | | | | | | | | | | | Percentile | Revenue ($mm)(1) | Market Capitalization ($mm)(1) | | Fiscal Year 2021 Peer Group | 25th
Median
75th | $ 15,266
$ 19,256
$ 36,983 | $ 85,186
$120,727
$195,320 | | Broadcom | | $ 22,891(2) | $125,500 | | Rank | 56% | 53% |
(1) As of July 15, 2020, using publicly reported data available at such date, except as noted in footnote 2.
(2) Represents publicly reported revenue for the trailing four quarters ended May 3, 2020.
In October 2021, Booking Holdings was removed from the compensation peer group was updated for Fiscal Year 2022 to reflect the growth in our revenue and market capitalization. Booking Holdings was removed due to its revenues and market capitalization falling outside of the selection criteria set forth above.below. Advanced Micro Devices was added to the compensation peer group which is viewed as an appropriate peer because its revenues, market capitalization and industry better aligned withfor Fiscal Year 2022 based on the applicable relevant selection criteria set forth above.below.The following selection criteria were considered as guidelines when developing the compensation peer group: Revenue: comparability across annual revenue, generally 0.5 to 2.0 times that of Broadcom Market capitalization: market capitalization that generally fall between 0.3 to 3.0 times that of Broadcom Industry: companies in semiconductor-related and other technology-focused industries having a similar scale | Fiscal Year 2022 Peer Group | | 3M Company | | Cisco Systems, Inc. | | International Business Machines Corporation | | PayPal Holdings, Inc. | Adobe, Inc.
| | Danaher Corporation | | Mastercard, Inc. | | Qualcomm Incorporated | Advanced Micro Devices
| | Dell Technologies, Inc. | | Micron Technology, Inc. | | Salesforce, Inc. | Applied Materials, Inc.
| | Honeywell International, Inc. | | NVIDIA Corporation | | Texas Instruments, Inc. | | Automatic Data Processing | | Intel Corporation | | Oracle Corporation | | Thermo Fisher Scientific, Inc. |
COMPENSATION DISCUSSION AND ANALYSIS | | Percentile | | Revenue
($mm)(1) | | Market Capitalization
($mm)(1) | | | | 25th | | $ | 18,633 | | | $122,194 | | | Fiscal Year 2022 Peer Group | Median | | $ | 26,104 | | | $187,150 | | | | 75th | | $ | 38,807 | | | $236,130 | | | Broadcom | | | $ | 25,553 | (2) | | $194,806 | | | | Rank | | | 48% | | | 52% | | | | | | | | | | | | |
| (1) | As of August 2, 2021, using publicly reported data available at such date, except as noted in footnote 2. |
| (2) | Represents publicly reported revenue for the trailing four quarters ended May 2, 2021. |
Elements of Executive Compensation The principal elements of our executive compensation program are: •base salary;
•an annual cash incentive bonus plan;
•LTI compensation in the form of equity awards, including a substantial weighting toward PSU awards;
•severance and change in control payments and benefits; and
•modest perquisites and other personal benefits.
| | | COMPENSATION DISCUSSION AND ANALYSIS |
We believe that a competitive base salary is an important element of our executive compensation program designed to attract, engage and retain our executive officers. Base salaries provide fixed, baseline compensation and are set at levels intended to reflect an executive’s sustained individual performance and level and scope of responsibility, to be within a competitive range for similar positions at the companies in our compensation peer group and/or market survey data, and to take into account internal pay parity among our executive officers. The Compensation Committee also reviews our economic and business conditions and outlook. The base salaries of our key executives are reviewed annually by the Compensation Committee. Our CEO makes recommendations to the Compensation Committee with respect to base salary adjustments for our executive officers (other than himself). The Compensation Committee also reviews and considers many factors in determining individual performance for the purposes of adjusting base salaries. These factors include division performance against budget, achievement of divisional goals, new product introductions and corporate strategy implementation. In December 2020, Consistent with this process and based on a market review of the NEOs’ roles and responsibilities in a highly competitive talent market, the Compensation Committee approved in consultation with Compensia and our CEO, increased the base salaries of Ms. Spears, Dr. Kawwas and Mr. Krause in connection with their promotions to positions with increased responsibilities and to bring their base salaries more in line with the competitive market levels for their new positions. TheseMay 2022 modest increases took effect on December 10, 2020 and are shown in the following table. Dr. Kawwas’ and Mr. Krause’s annual base salary will remain effective through December 15, 2023. No other changes were made to the base salaries of ourthe NEOs in Fiscal Year 2021.(other than the CEO), effective July 2022 and as set forth below.| NEO | Title | Base Salary
effective
July 2021 | | Base Salary
effective
July 2022 | | %
Change | | | Hock E. Tan | President and Chief Executive Officer | $ | 1,200,000 | | | $ | 1,200,000 | | | 0.0% | | | | Kirsten M. Spears | Chief Financial Officer and Chief Accounting Officer | $ | 400,000 | | | $ | 412,000 | | | 3.0% | | | | Mark D. Brazeal | Chief Legal and Corporate Affairs Officer | $ | 500,000 | | | $ | 515,000 | | | 3.0% | | | | Charlie B. Kawwas, Ph.D. | President, Semiconductor Solutions Group | $ | 700,000 | | | $ | 721,000 | | | 3.0% | | | | Thomas H. Krause, Jr. | Former President, Broadcom Software Group | $ | 700,000 | | | $ | 721,000 | | | 3.0% | | |
COMPENSATION DISCUSSION AND ANALYSIS | | | | | | | | | | | | | | | | NEO | Title | Base Salary
end of Fiscal Year 2020 | Base Salary
end of
Fiscal Year 2021 | % Change | | Hock E. Tan | President and Chief Executive Officer | $ 1,200,000 | $ 1,200,000 | 0.0% | | Kirsten M. Spears | Chief Financial Officer and Chief Accounting Officer | $ 332,964 | $ 400,000 | 20.1% | | Mark D. Brazeal | Chief Legal and Corporate Affairs Officer | $ 500,000 | $ 500,000 | 0.0% | | Charlie B. Kawwas, Ph.D. | Chief Operating Officer | $ 500,000 | $ 700,000 | 40.0% | | Thomas H. Krause, Jr. | President, Broadcom Software Group | $ 500,000 | $ 700,000 | 40.0% |
Annual Cash Incentive Bonus Plan We believe that a significant portion of our executive officers’ target total direct compensation should be dependent upon performance. Accordingly, we useUnder the APB Plan, towe provide a performance-based annual cash incentive bonus opportunity for our executive officers. The APB Plan is designed to encourage and motivate our executive officers to achieve our overall corporate goals for the fiscal year, as well as divisional goals where appropriate, and to drive positive contributions to Broadcom’s growth and performance. Each executive officer is annually assigned a specified target annual cash incentive bonus opportunity under the APB Plan, expressed as a percentage of the executive officer’s eligible earnings. The Compensation Committee considers compensation peer group and market data in determining the executive officer’s target annual cash incentive opportunity. In the case of our CEO, the Compensation Committee includesprovides the data in its recommendation to the independent directors. The Compensation Committee and the independent directors also consider other factors that influence corporate and operational results, such as the executive’s experience, performance, leadership, responsibility and responsibility.
| | | COMPENSATION DISCUSSION AND ANALYSIS |
internal equitability.Fiscal Year 20212022 APB Plan In consultation with Compensia, the Compensation Committee increased theThe target annual cash incentive opportunity for Ms. Spears to 100% of her eligible earnings from 50%, effective December 10, 2020, in connection with her promotion to CFO and to bring it in line with the competitive market levels for her position and the other NEOs. The other NEOs’ target annual cash incentive bonus opportunity as a percentage of their eligible earningsour NEOs did not change in Fiscal Year 2021. | | | | | | | | | | NEO | Fiscal Year 2020 APB Plan Target Bonus
(as a % of eligible earnings) | Fiscal Year 2021 APB Plan Target Bonus
(as a % of eligible earnings) | | Hock E. Tan | 200% | 200% | | Kirsten M. Spears | 50% | 100% | | Mark D. Brazeal | 100% | 100% | | Charlie B. Kawwas, Ph.D. | 100% | 100% | | Thomas H. Krause, Jr. | 100% | 100% |
2022. The following is the APB Plan target bonus percentage for our NEOs.| NEO | Fiscal Year 2022
APB Plan Target Bonus
(as a % of eligible earnings) | | Hock E. Tan | 200% | | Kirsten M. Spears | 100% | | Mark D. Brazeal | 100% | | Charlie B. Kawwas, Ph.D. | 100% | | Thomas H. Krause, Jr. | 100% |
Annual cash incentive bonuses under the APB Plan are calculated as follows:  
Bonuses under the APB Plan are payable to our NEOs in cash, with the exception ofexcept for our CEO in certain circumstances. In the event the independent directors assign our CEO an individual performance multiplier (discussed in more detail below) greater than 100%, they may elect to pay the difference between the dollar amount of our CEO’s actual annual cash incentive bonus payout and the dollar amount of his annual cash incentive bonus payout calculated using a performance factor of 100% in the form of an equity award. The type and terms of any such equity award are determined by the independent directors. The independent directors believe that this feature gives them the flexibility to further incentivize our CEO to focus on our mid-term to long-term performance and value creation for our stockholders and to provide continued retention of our CEO. COMPENSATION DISCUSSION AND ANALYSIS Corporate Performance Components The corporate performance goals for the Fiscal Year 20212022 APB Plan were: • revenue threshold attainment levelare set at $23,750 million, target set at $25,000 million and maximum set at $26,250 million; and
• adjusted non-GAAP operating income as a percentage of revenue (referred to as “adjusted non-GAAP operating margin”) threshold attainment level set at 57.3%, target set at 58.3% and maximum set at 60.3%.
forth below.| | Attainment Level | | | | Threshold | Target | Maximum | Revenue (in millions) | $ | 28,673 | | $ | 30,183 | | $ | 31,692 | | Adjusted non-GAAP operating income (as a % of revenue) | | 59.7 | % | | 60.7 | % | | 62.7 | % |
These performance levels were established in December 2021 by the Compensation Committee, based ontaking into account the recommendation of our CEO, and approved by the independent directors. As shown below in “Fiscal Year 2021 APB Plan Attainment,” the The target levels were set significantly above our Fiscal Year 2020 actual performance levels and were designed to significantly enhance stockholder value, while requiringrequire substantial effort to achieve.achieve, while driving a significant increase in stockholder value. Each goal carried an equal weighting of 50% of the corporate performance component.
Divisional Performance Components The Compensation Committee, taking into account our CEO’s recommendations, determined anin December 2021 the executive officer’s divisional goals and set their weightings based on its assessment of the business requirements of the particular division to which the goals related and the relative importance of the goals to the division. Each divisional goal was set by the Compensation Committee to be difficult to attain and to require substantial effort by the division and the NEO in charge of the division to achieve. The table below under “ Fiscal Year 20212022 APB Plan Attainment and Payout Amounts” sets forth the divisional goals for Fiscal Year 2021.
| | | COMPENSATION DISCUSSION AND ANALYSIS |
2022.Individual Performance Multiplier The final payouts under the APB Plan includedinclude the effect of a non-subjective individual performance multiplier applied judiciously to recognize the extraordinary efforts of our executives despite adverse market conditions or exceptional performance with respect to our corporate goals or an executive’s division results. Each individual NEO’s performance multiplier (other than our CEO’s) is approved by the Compensation Committee based, in part, on the recommendations of our CEO and by the independent directors, in the case of our CEO, with input from the Compensation Committee. In evaluating individual performance to determine the applicable multiplier, the Compensation Committee considers (i) the requirements of the NEO’s position and role, including the achievement of the corporate or divisional goals, (ii) fiscal responsibility as determined by the Compensation Committee with input from our CEO, (iii) the NEO’sdemonstration of senior leadership, ability and(iv) contribution to Broadcom’s values and culture, and (iv)(v) how each of these factors impact the overall performance of Broadcom or the NEO’s division, as applicable. Based on each NEO’s contribution to Broadcom’s performance and their respective division’s levels of performance,this evaluation, the Compensation Committee or, in the case of our CEO, the independent directors, assigns each NEO an individual performance multiplier of between 50% and 150%. NEOs who consistently meet or exceed the requirements of their position, as determined by the Compensation Committee, receive an individual performance multiplier between 100% and 150%. NEOs who meet some, but not all, of the requirements of their position or for whom the Compensation Committee believes that improvement is needed receive an individual performance multiplier between 50% and 100%. Fiscal Year 20212022 APB Plan Attainment In December 2021,2022, the Compensation Committee and the independent directors reviewed Broadcom’s actual performance for Fiscal Year 20212022 to determine the level of achievement for the corporate performance goals and the divisional goals, and to assign an individual performance multiplier for each of our executives. Corporate Performance Component For Fiscal Year 2021,2022, we achieved revenue of $27,450$33,203 million and adjusted non-GAAP operating margin was 60.7%63.8%, both of which were above the pre-established maximum attainment levels of performance. See Appendix A for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures. | | | | | | | | | | | | | | | | Revenue Performance Goal Attainment | Fiscal Year 2020
Revenue Achieved (in millions) | Fiscal Year 2021 Revenue Threshold Attainment Level (in millions) | Fiscal Year 2021 Revenue Target Attainment Level (in millions) | Fiscal Year 2021 Revenue Maximum
Attainment Level (in millions) | Fiscal Year 2021 Revenue Achieved (in millions) | | $23,888 | $23,750 | $25,000 | $26,250 | $27,450 |
| | | | | | | | | | | | | | | | | | | | | | | | | Non-GAAP Operating Margin Performance Goal Attainment | Fiscal Year 2020 APB Plan Adjusted Non-GAAP Operating Margin Achieved | Fiscal Year 2021 Adjusted Non-GAAP Operating Margin Threshold Attainment Level | Fiscal Year 2021
Adjusted Non-GAAP Operating Margin Target Attainment Level | Fiscal Year 2021 Adjusted Non-GAAP Operating Margin Maximum Attainment Level | Fiscal Year 2021 Non-GAAP Operating Income Achieved (in millions) | Provisions or Accruals for Anticipated Payouts Under APB Plan
(in millions) | Fiscal Year 2021 Adjusted Non- GAAP Operating Income Achieved (in millions) | Fiscal Year 2021 Adjusted Non-GAAP Operating Margin Achieved | | 56.5% | 57.3% | 58.3% | 60.3% | $15,912 | $764 | $16,676 | 60.7% |
| | | | | | | | | | | | | | | | Corporate Performance Attainment Level | | Corporate Performance Goals | Actual Fiscal Year
2021 Performance (in millions) | As a % of
Target
Attainment | Weight | Weighted Attainment | | Revenue | $27,450 | 150% | 50% | 75% | | Adjusted non-GAAP Operating Margin | 60.7% | 150% | 50% | 75% | | Total Attainment | | | | 150% |
| Broadcom Inc. | | | COMPENSATION DISCUSSION AND ANALYSIS47 |
COMPENSATION DISCUSSION AND ANALYSIS | | Fiscal Year 2022 Revenue Performance Goal Attainment | Fiscal Year 2021
Revenue Achieved
(in millions) | Revenue Attainment Level | | Threshold
(in millions) | Target
(in millions) | Maximum
(in millions) | Revenue Achieved
(in millions) | | $27,450 | $28,673 | $30,183 | $31,692 | $33,203 |
| | Fiscal Year 2022
Non-GAAP Operating Margin Performance Goal Attainment | Fiscal Year 2021
Adjusted
Non-GAAP
Operating
Margin
Achieved | Adjusted
Non-GAAP Operating Margin
Attainment Level | Non-GAAP
Operating
Income
Achieved
(in millions) | Provisions or
Accruals for
Anticipated
Payouts Under
APB Plan
(in millions) | Adjusted
Non-GAAP
Operating
Income
Achieved
(in millions) | Adjusted
Non-GAAP
Operating
Margin
Achieved | | Threshold | Target | Maximum | | 60.7% | 59.7% | 60.7% | 62.7% | $20,294 | $893 | $21,187 | 63.8% |
| | Fiscal Year 2022
Corporate Performance Attainment Level | | Corporate Performance Goals | Actual Performance
(in millions) | As a % of
Target | Weight | Weighted
Attainment | | Revenue | $33,203 | 150% | 50% | 75% | | Adjusted non-GAAP Operating Margin | 63.8% | 150% | 50% | 75% | | Total Attainment | | | | 150% |
Divisional Performance Components TheFor Ms. Spears and Mr. Brazeal, the Compensation Committee determined each NEO’sof their divisional performance percentage based on the actual level of achievement of pre-established divisional goals. For Fiscal Year 2022, the pre-establisheddivisional goals byfor Ms. Spears and Mr. Brazeal were based on fiscal responsibility of their divisions and ability to control the division overseen by the NEO.direct expenses of their division. In December 2021, 2022, the Compensation Committee determined that the NEO’s divisional goals had beenof Ms. Spears and Mr. Brazeal were achieved at the levelsas set forth below in the table below under “Fiscal Year 20212022 APB Plan Attainment and Payout Amounts.Amounts.” Due to their promotions in December 2020, Dr. Kawwas and Mr. Krause were not subject to divisional goals in Fiscal Year 2022.Individual Performance Multiplier Due to the strong leadership and significant efforts of our NEOs in addressing the continued disruption in our normal business activities due to the ongoing COVID-19 pandemic, supply chain constraints and macroeconomic uncertainties, we achieved a 15% increase in our revenue year-over-year and increased our non-GAAP operating margin. The Compensation Committee, with input from our CEO, determined thatthe individual performance multipliers for each of our NEOs (other than our CEO) should receiveCEO and, due to his resignation, Mr. Krause) for Fiscal Year 2022. Ms. Spears, Mr. Brazeal and Dr. Kawwas received an individual performance multiplier between 100120% to 150%, with higher multipliers attributable due to the NEOs’their strong leadership and extraordinary efforts in growingincreasing our businessrevenue by 21% and exceeding division targets while navigatingachieving our 63.8% non-GAAP operating margin in Fiscal Year 2022 despite the continued disruption in our business due to theongoing COVID-19 pandemic, challenging macroeconomic environment and continued supply chain constraintsdisruptions. Ms. Spears, Mr. Brazeal and macroeconomic uncertainties. Dr. Kawwas also exerted significant efforts, along with Mr. Tan, on the pending acquisition of VMware. In addition, Dr. Kawwas’ individual performance multiplier reflects his performance as President, Semiconductor Solutions Group in overseeing our broad semiconductor portfolio since July 2022 while continuing to lead worldwide semiconductor sales and global operations.The independent directors, based upon the recommendation of the Compensation Committee, determined that Mr. Tan should receive an individual performance multiplier of 150%. Mr. Tan successfully led and navigated Broadcom through many challenges in fiscal year 2021, including managing our business and workforce during the ongoing COVID-19 pandemic and addressing supply chain constraints and customer demands, and delivered strong financial and operational growth,, resulting in a payout of 225% of his target bonus. Under Mr. Tan’s strong leadership, we successfully navigated through the ongoing impact of the COVID-19 pandemic, supply chain disruptions and the challenging macroeconomic environment and achieved strong financial results for Fiscal Year 20212022. In addition, Mr. Tan and his strategic vision were critical in our entry into an agreement and plan of merger with VMware, and Mr. Tan has shown invaluable leadership in the integration planning of the pending acquisition of VMware.COMPENSATION DISCUSSION AND ANALYSIS Fiscal Year 2022 APB Plan Attainment and Payout Amounts Each of the corporate and applicable divisional goals for our NEOs, and their respective weighting, is set forth in the following table. | | | | | | | | | | | | | | | | | | | | | | Name | Bonus
Target
Percent | Fiscal Year 2021 Bonus Goals | Fiscal Year
2021 Bonus
Achievement | Fiscal Year 2021 Payout Amount
in Dollars and as a
Percentage of Base Salary Paid(1) | | Hock E. Tan | 200% | Revenue (50%) | 150 | | % | | | President and
Chief Executive Officer | | Adjusted non-GAAP Operating Margin (50%) | 150 | | % | | | | Fiscal Year 2021 Attainment | 150 | | % | $ 5,400,000 | 450.0 | % | | Kirsten M. Spears | 100%(2) | Revenue (25%) | 150 | | % | | | | Chief Financial Officer and Chief Accounting Officer | | Adjusted non-GAAP Operating Margin (25%) | 150 | | % | | | | Direct Expenses (50%)(3) | 102 | | % | | | | Fiscal Year 2021 Attainment | 126 | | % | $ 584,233 | 149.2 | % | | Mark D. Brazeal | 100% | Revenue (25%) | 150 | | % | | | | Chief Legal and Corporate Affairs Officer | | Adjusted non-GAAP Operating Margin (25%) | 150 | | % | | | | Direct Expenses (50%)(3) | 112 | | % | | | | | Fiscal Year 2021 Attainment | 131 | | % | $ $818,750 | 163.8 | % | | Charlie B. Kawwas, Ph.D. | 100% | Revenue (50%) | 150 | | % | | | | Chief Operating Officer | | Adjusted non-GAAP Operating Margin (50%) | 150 | | % | | | | | Fiscal Year 2021 Attainment | 150 | | % | $ 1,517,885 | 225.0 | % | | Thomas H. Krause, Jr. | 100% | Revenue (50%) | 150 | | % | | | | President, Broadcom Software Group | | Adjusted non-GAAP Operating Margin (50%) | 150 | | % | | | | Fiscal Year 2021 Attainment | 150 | | % | $ 1,011,923 | 150.0 | % |
(1) Includestable below. As Mr. Krause resigned from Broadcom in July 2022, he did not receive a payout under the quantitative effect of our NEOs’ applicable individual performance multiplier.
(2) Prior to her promotion to CFO, target bonus was 50%, which resultedAPB Plan in a pro-rated bonus target percent of 95% for Fiscal Year 2021.2022.| Name | | Bonus
Target
Percent | | Bonus Goals | | Bonus
Achievement | Payout Amount in Dollars
and as a Percentage of
Base Salary Paid(1) | | Hock E. Tan | | 200% | | | Revenue (50%) | | 150 % | | | | | | President and
Chief Executive Officer | | | | | Adjusted non-GAAP Operating Margin (50%) | | 150 % | | | | | | | | | | | Fiscal Year 2022 Attainment | | 150 % | | $ | 5,400,000 | | 450.0% | | Kirsten M. Spears | | 100% | | | Revenue (25%) | | 150 % | | | | | | | Chief Financial Officer and Chief Accounting Officer | | | | | Adjusted non-GAAP Operating Margin (25%) | | 150 % | | | | | | | | | | | Divisional Goal (50%) | | 115 % | | | | | | | | | | | | Fiscal Year 2022 Attainment | | 132 % | | $ | 641,854 | | 159.0% | | Mark D. Brazeal | | 100% | | | Revenue (25%) | | 150 % | | | | | | | Chief Legal and Corporate Affairs Officer | | | | | Adjusted non-GAAP Operating Margin (25%) | | 150 % | | | | | | | | | | | Divisional Goal (50%) | | 120 % | | | | | | | | | | | | Fiscal Year 2022 Attainment | | 135 % | | $ | 885,701 | | 175.5% | | Charlie B. Kawwas, Ph.D. | | 100% | | | Revenue (50%) | | 150 % | | | | | | | President, Semiconductor Solutions Group | | | | | Adjusted non-GAAP Operating Margin (50%) | | 150 % | | | | | | | | | | | Fiscal Year 2022 Attainment | | 150 % | | $ | 1,589,720 | | 225.0% |
(3) Represents direct expenses of the division, as applicable.
| (1) | Includes the quantitative effect of our NEOs’ applicable individual performance multiplier. |
Discretionary Cash Bonuses Each year, the Compensation Committee may supplement or substitute the APB Plan payout earned by our NEOs with discretionary cash bonuses that are awarded based on our CEO’s recommendations (other than with respect to himself) and the Compensation Committee’s assessment of individual contributions. Discretionary cash bonuses were not awarded to our NEOs for Fiscal Year 2021.
| | | COMPENSATION DISCUSSION AND ANALYSIS |
2022.Long-Term Incentive Compensation Our equity awards serve as a long-term reward and retention tool for our executives and are intended to reflect market practice and the value we place on their contribution to Broadcom. The philosophy behind our equity awards is to provide each executive with a strong incentive to remain with and build value in Broadcom over an extended period of time. period.The Compensation Committee believes that an annual grant ofgranting RSU and the PSU awards for our CEO and a combination of service-based RSU awards and PSU awards for our other executives further the objectives of our philosophy. Because the value of the service-based RSU awards fluctuates based on our stock price and the PSU awards motivatephilosophy by motivating strategic financial performance improvement and maximizemaximizing our stock price and TSR,TSR. By doing so, our executives’ interests are closely aligned with our stockholders’ interests. The Compensation Committee has historically granted equity awards under our annual equity program to our NEOs (other than our CEO) in March of each year, with 50% in the form of service-based RSU awards and 50% in the form of PSU awards. awards at target.Because our NEOs (other than our CEO) received the 2019 Multi-Year Equity Awards, they have not received since 2019 regular annual equity awards and will notsince 2019. However, these NEOs are eligible to receive regular annual equity awards until at least 2023.for events outside the ordinary course related to promotions or retention. Accordingly, in Fiscal Year 2021, our2022, these NEOs (other than our CEO) were not granted regular annual equity awards under our annual equity program. However, our NEOs (other than our CEO) would be eligible to receive equity awards for outside the ordinary course of events related to promotions or retention. As described below , equity awards were granted to Ms. Spears, Dr. Kawwas and Mr. Krause in Fiscal Year 2021 in connection with their promotions, which increased their respective responsibilities. See the “Compensation Discussion and Analysis – Elements of Executive Compensation – Long-Term Incentive Compensation” in our Proxy Statement filed with the SEC on February 18, 2020 for a detailed discussion of the 2019 Multi-Year Equity Awards.COMPENSATION DISCUSSION AND ANALYSIS Equity Awards Granted in Fiscal Year 2021 Annual 2022Equity Incentive Award GrantAwards Granted to Mr. Tan On December 8, 2020,The Compensation Committee and the independent directors, in consultation with Compensia who was their compensation consultant at that time, focused on retaining Mr. Tan in highly competitive talent market and uponincentivizing Mr. Tan to continue to increase value for our stockholders. They also considered the recommendationappropriate market value for the grant of equity awards to Mr. Tan in comparison to awards granted by our peer group companies and in connection with our corporate strategy. Mr. Tan was granted two equity incentive awards in Fiscal Year 2022 to address two different priorities. The first equity incentive award was approved in September 2021 and was Mr. Tan’s regular annual equity incentive award. The second equity incentive award was approved in October 2021, smaller in size and designed to reward significant achievement tied to our specific strategic priorities in Fiscal Year 2022 that went beyond the standard day-to-day operations responsibilities and were critical in a year when there were expectations of a possible realignment in the global markets and increased macroeconomic uncertainties. For the first equity incentive award granted to Mr. Tan, the Compensation Committee recommended and the independent directors approved an annual PSU award for Mr. Tanthat vests based on our TSR performance compared to the S&P 500 (“Relative TSR”) and absolute TSR (the “Tan “FY 2022 TSR PSU Award”) with a target value of $26,000,000 and effective as of and based on the closing price of our common stock on November 1, 2021. The target number of shares was determined by dividing the target value by the closing price of Broadcom’s common stock on November 1, 2021 (rounded down to the nearest share). The award value in the “Fiscal Year 2021 PSU Award”), contingent upon stockholder approval of our 2012 Plan that was obtained at2022 Summary Compensation Table” below is $44,186,269, which reflects the 2021 annual meetingaccounting grant date fair value under ASC 718 on April 5,November 1, 2021. Mr. Tan was awarded this PSU award as part of his regular total annual direct compensation to maintain alignment of his interests with our stockholders interests and to encourage his retention, as well as to reflect the competitive talent market. Absent such award, Mr. Tan would no longer have had any unvested equity awards after June 2021. Mr. Tan may earn up to 300% of the target number of shares based on our Relative TSR performance as compared to the S&P 500 (“Relative TSR”) and our absolute TSR performance measured fromover the period beginning on November 2, 2020 to October 29, 2023 (the “Performance Period”),1, 2021 and ending on November 3, 2024 as confirmed by the independent directors and subject to hisMr. Tan’s continued employment on the vesting date, of October 29, 2023.November 3, 2024. However, asif Mr. Tan has reached the age of 70, if he retires from Broadcom on or after the last day of Fiscal Year 2021,2022, the Performance Periodperformance period will end on the date of his retirement notice and vest on his retirement date. The number of shares earned will be determined by multiplying the target number of shares by the achievement factor (the “Achievement Factor”). In the event ofIf Mr. Tan’s employment terminates due to his death or permanent disability prior to October 29, 2023,November 3, 2024, 100% of the Tan Fiscal Year 2021FY 2022 TSR PSU Award will automatically vest with respect to the target number of shares. The table below sets forth the Relative TSR and the Achievement Factor for the Tan Fiscal Year 2021FY 2022 TSR PSU Award. | Relative TSR | | | | | Achievement Factor(1) | Relative TSR | Achievement Factor(1)
| Below the 25th percentile of the S&P 500 | 0 | At the 25th percentile of the S&P 500 | 0.25 | At the 50th percentile of the S&P 500 | 1.0 | At or above the 75th percentile of the S&P 500 | 3.0 | | |
(1) If the Relative TSR achieved during the applicable performance period is between two of the levels set forth in the table above, the Achievement Factor will be determined using linear interpolation, except if Relative TSR for the performance period is less than the 25th percentile of the S&P 500, the Achievement Factor will be 0. If our absolute TSR is negative, then the maximum number of shares that may be earned is 100% of the target shares.
| (1) | | COMPENSATION DISCUSSION AND ANALYSISIf the Relative TSR achieved during the performance period is between two of the levels set forth in the table above, the Achievement Factor will be determined using linear interpolation, except if Relative TSR for the performance period is less than the 25th percentile of the S&P 500, the Achievement Factor will be 0. If our absolute TSR is negative, then the maximum number of shares that may be earned is 100% of the target shares. |
TheFor the second equity incentive award value of thegranted to Mr. Tan, Fiscal Year 2021 PSU Award approved by the independent directors was $25,000,000 and the number of target shares subject to theapproved a PSU award was basedthat vests depending on the closing stock price on December 15, 2020, the effective datesatisfaction of the award. However, the award value in the “ Fiscal Year 2021 Summary Compensation Table” below is $54,056,808, which reflects the accounting grant date fair value under ASC 718 on April 5, 2021, when the stockholders approved the 2012 Planpre-established metrics and the actual grant date for accounting purposes. Several factors generally explain the difference, including: (i) Broadcom’s stock price increased from $418.06 on December 15, 2020, the effective date of the award,milestones related to $488.48 on April 5, 2021, the actual grant date; and (ii) Relative TSR iscertain strategic objectives (the “FY 2022 Strategic PSU Award”) with a “market-based measure” that requires the target number of shares to be valued using a Monte Carlo simulation model, which resulted in a higher value of the shares at the then-current price based on the plan design, including the potential achievement above target under the PSU award.Promotion Equity Incentive Award Grants to Dr. Kawwas$10,000,000 and Mr. Krause
On December 8, 2020, the Compensation Committee, in consultation with Compensia, approved promotion equity incentive awards for Dr. Kawwas and Mr. Krause, contingent upon stockholder approval of our 2012 Plan that was obtained at the 2021 annual meeting on April 5, 2021. Dr. Kawwas and Mr. Krause each received promotion equity incentive awards with a target market value of $15,000,000, consisting of 50% service-based RSU awards (the “Kawwas/Krause Promotion RSUs”) and 50% PSU awards at target (the “Kawwas/Krause Promotion PSUs” and, together with the Kawwas/Krause Promotion RSUs, the “Promotion Awards”), effective as of and based on the closing price of our common stock on December 15, 2020.November 1, 2021. The terms and amounts of the Promotion Awards were designed to align Dr. Kawwas’ and Mr. Krause’s long term equity incentive compensation to the competitive talent market and to reflect their increased responsibilities due to their promotions. The Compensation Committee does not anticipate granting Dr. Kawwas and Mr. Krause regular annual equity awards under our annual equity award program until at least 2023.
The Kawwas/Krause Promotion RSUs will vest over a three-year period, with one-third of the Kawwas/Krause Promotion RSUs vesting on each anniversary of December 15, 2020, subject to Dr. Kawwas’ or Mr. Krause’s (as applicable) continued employment on the relevant vesting dates. Dr. Kawwas and Mr. Krause may earn up to 200% of the target number of shares under their respective Kawwas/Krause Promotion PSUs based on our Relative TSR and absolute TSR measured over the period beginning on November 2, 2020 and ending on October 29, 2023, as determined by the Compensation Committee. The number of shares earned will be determined by multiplying the target number of shares by the Achievement Factor. Subject to Dr. Kawwas’ or Mr. Krause’s (as applicable) continued employment on the vesting date, the Kawwas/Krause Promotion PSUs will vest on October 29, 2023.
The table below sets forth the Relative TSR and Achievement Factor for the Kawwas/Krause Promotion PSUs.
| | | | | | Relative TSR | Achievement Factor(1)
| Below the 25th percentile of the S&P 500
| 0 | At the 25th percentile of the S&P 500
| 0.5 | At the 50th percentile of the S&P 500
| 1.0 | At or above the 75th percentile of the S&P 500
| 2.0 |
(1) If the Relative TSR achieved during the applicable performance period is between two of the levels set forthvalue in the table above, the Achievement Factor will be determined using linear interpolation, except if Relative TSR for the performance period is less than the 25th percentile of the S&P 500, the Achievement Factor will be 0. If our absolute TSR is negative, then the maximum number of shares that may be earned is 100% of the target shares.
The value of each of the Promotion Awards in the “Fiscal Year 20212022 Summary Compensation Table” below is $20,115,046 because it is$9,727,179, which reflects the accounting grant date fair value under ASC 718 on April 5,November 1, 2021. The number of shares subject to the award was determined by dividing the award value by the closing price of Broadcom’s common stock on November 1, 2021 when(rounded down to the stockholders approvednearest share). To earn the 2012 Planshares, all of the pre-established metrics and milestones related to strategic objectives such asCOMPENSATION DISCUSSION AND ANALYSIS corporate strategy, acquisition strategy and leadership development must be satisfied during the actual grantperformance period from November 1, 2021 to October 30, 2022, as determined by the independent directors in their sole discretion, and Mr. Tan must remain employed through the vesting date, for accounting purposes. The same factors provided above forOctober 30, 2022. If any of the pre-established metrics and milestones were not satisfied, Mr. Tan Fiscal Year 2021would not have earned any shares. If Mr. Tan’s employment had terminated due to his death or permanent disability prior to October 30, 2022, 100% of the FY 2022 Strategic PSU Award explainwould have automatically vested. In November 2021, the difference betweenindependent directors determined that Mr. Tan satisfied all of the target market value approved bypre-established metrics and milestones and earned the Compensation Committee andshares under the accounting grant date fair value. FY 2022 Strategic PSU Award.Promotion Equity Incentive Award GrantsAwards Granted to Ms. Spears OnMr. BrazealIn December 8, 2020,2021, the Compensation Committee, in consultation with Compensia, approvedMeridian, granted to Mr. Brazeal promotion equity incentive awards for Ms. Spears. Ms. Spears was grantedcomprised of a service-based RSU award for 13,0008,000 shares (the “Spears“Brazeal Promotion RSUs”) and a PSU award for 13,0008,000 shares (the “Spears“Brazeal Promotion PSUs”) at target on December 15, 2020.target. The terms and amounts of Ms. Spears’Mr. Brazeal’s promotion equity incentive awards were solely designed to align Ms. Spears long term equity incentive compensation to the competitive talent marketreflect his promotion and to reflect her increased responsibilities dueas the Chief Corporate Affairs Officer in addition to her
| | | COMPENSATION DISCUSSION AND ANALYSIS |
promotion. his continuing responsibilities as Chief Legal Officer.The Compensation Committee does not anticipate granting Ms. Spears regular annual equity awards under our annual equity award program until at least 2023. The SpearsBrazeal Promotion RSUs will vest over four years at a rate of 25% per year on each anniversary of the grant date, subject to Ms. Spears’Mr. Brazeal’s continued employment on the relevant vesting date. The SpearsBrazeal Promotion PSUs are earned based on our Relative TSR and our absolute TSR over four overlapping performance periods that begin on March 2, 20202021 and end on March 1st of 2021, 2022, 2023, 2024 and 2024.2025. The number of shares of common stock that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, Ms. SpearsMr. Brazeal may earn up to 200% of the target number of shares, if at the end of the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is below the 25th percentile of the S&P 500 Index. The SpearsBrazeal Promotion PSUs vest, to the extent earned, on each anniversary of the grant date, subject to herhis continued employment on the relevant vesting date.
Within 60 days after the end of each performance period, the Compensation Committee will determine the number of shares earned by multiplying the target number of shares subject to the performance period (25% of the total target number of shares) by an Achievement Factor .Factor. The Achievement Factor is based on our Relative TSR for the performance period. For the fourth performance period the Achievement Factor is based on our Relative TSR, as well as the sum of the Achievement Factors for the first three performance periods (the “Prior Achievement Sum”). However, if our absolute TSR is negative for the fourth performance period, then the maximum number of shares of common stock that may be earned is 100% of the total target number of shares. If the Relative TSR is between two of the percentile levels, the number of shares earned will be determined using linear interpolation. COMPENSATION DISCUSSION AND ANALYSIS The table below sets forth the Relative TSR and Achievement Factor for the SpearsBrazeal Promotion PSUs. | | | | | | | Relative TSR | Achievement Factor | | Performance Periods 1, 2 and 3 | | | At the 50th Percentile of the S&P 500 | 1 | | At the 25th Percentile of the S&P 500 | 0.5 | | Below the 25th Percentile of the S&P 500 | 0 | | Performance Period 4 | | | At the 75th Percentile of the S&P 500 | Absolute TSR Negative = 4 less the Prior Achievement Sum
Absolute TSR Neutral or Positive = 8 less the Prior Achievement Sum
(not to exceed, in aggregate, 200% of the target number of shares) | | At the 50th Percentile of the S&P 500 | 4 less the Prior Achievement Sum | | At the 25th Percentile of the S&P 500 | Prior Achievement Sum greater than or equal to 1.5=0.5
Prior Achievement Sum less than 1.5=2 less the Prior Achievement Sum | | Below the 25th Percentile of the S&P 500 | 0 |
The table below sets forth the Relative TSR attainment and the number of shares earned by Ms. Spears under the Spears Promotion PSUs for the performance period ending March 1, 2021, as determined by the Compensation Committee, which vested on the first anniversary of the grant date on December 15, 2021.
| | | | | | | | | Performance Period | 2020-2021 | | Relative TSR Attainment | 92nd Percentile
| | Percentage of Target Shares Earned | 100% | | Shares earned | 3,250 shares | |
 | | | | | | | | | | | | | | | | Achievement
Factor | | Performance Period
Relative TSR Achieved | |
| | | COMPENSATION DISCUSSION AND ANALYSIS |
For information about how the equity awards granted to our NEOs in Fiscal Year 2021 may accelerate in connection with certain terminations of their employment or a change in control of Broadcom, see “Executive Compensation – Severance and Change in Control Agreements with Named Executive Officers; Death and Permanent Disability Policies; Retirement” below.
PSU Awards Earned for the 2017-2021, 2018-2021, 2019-20212018-2022, 2019-2022, 2020-2022 and 2020-20212021-2022 Performance Periods The PSU award granted to our CEO in Fiscal Year 2017 consisted of an aggregate of 168,000 shares, with the opportunity to earn up to 756,000 shares based on our Relative TSR and our absolute TSR, over two overlapping performance periods, consisting of one three-year performance period that ended in Fiscal Year 2020 (“Performance Period #1”) and one four-year performance period that ended in Fiscal Year 2021 (“Performance Period #2”). Following completion of each performance period, the independent directors confirmed the Relative TSR attained for the completed performance period and the shares earned under the PSU award. The table below sets forth the Relative TSR attainment and the number of shares earned by Mr. Tan under the PSU award for Performance Period #1 and Performance Period #2, as confirmed by the independent directors. Our absolute TSR was positive for both performance periods.
| | | | | | | | | | Performance Period | 2017-2020 | 2017-2021 | | Relative TSR Attainment | 60th Percentile | 76th Percentile | | Percentage of Target Shares Earned | 181.95% | 307.64% | | Shares Earned | 152,838 shares | 363,996 shares |
 | | | | | | | | | | Percent of
Target Shares | Performance Period
Relative TSR Achieved |
The PSU awards granted to our NEOs (other than our CEO) in Fiscal Years 2017, 2018, 2019, 2021 and 20192022 are subject to four overlapping performance periods. Following completion of each performance period, the Compensation Committee confirms the Relative TSR attained, and the shares earned under the applicable PSU award pursuant to the following calculation: 
The Fiscal Year 2017 PSU awards were subject to four overlapping performance periods that ended on each March 14th of 2018, 2019, 2020 and 2021. The table below sets forth the Relative TSR attainment and the number of shares earned under the PSU award for each completed performance period, as confirmed by the Compensation Committee. Our absolute TSR was positive for the fourth performance period. | | | | | | | | | | | | | | | | Performance Period | 2017-2018 | 2017-2019 | 2017-2020 | 2017-2021 | | Relative TSR Attainment | 57th Percentile | 67th Percentile | 59th Percentile | 83rd Percentile | | Percentage of Target Shares Earned | 100% | 100% | 100% | 200% | | Kirsten M. Spears | 1,875 shares | 1,875 shares | 1,875 shares | 9,375 shares | | Mark D. Brazeal | 3,125 shares | 3,125 shares | 3,125 shares | 15,625 shares | | Charlie B. Kawwas, Ph.D. | 3,125 shares | 3,125 shares | 3,125 shares | 15,625 shares | | Thomas H. Krause, Jr. | 3,125 shares | 3,125 shares | 3,125 shares | 15,625 shares | | | | | |
 | | | | | | | | | | | | | Achievement Factor | | Performance Period
Relative TSR Achieved |
| | | COMPENSATION DISCUSSION AND ANALYSIS |
The Fiscal Yearfiscal year 2018 PSU awards are subject to four overlapping performance periods ending on each March 1st of 2019, 2020, 2021 and 2022. The table below sets forth the Relative TSR attainment and the number of shares earned for each complete performance period, as confirmed by the Compensation Committee. Our absolute TSR was positive for the fourth performance period.| Performance Period | 2018-2019 | 2018-2020 | 2018-2021 | 2018-2022 | | Relative TSR Attainment | 71st Percentile | 64th Percentile | 91st Percentile | 92rd Percentile | | Percentage of Target Shares Earned | 100% | 100% | 100% | 200% | | Kirsten M. Spears | 1,250 shares | 1,250 shares | 1,250 shares | 6,250 shares | | Mark D. Brazeal | 1,625 shares | 1,625 shares | 1,625 shares | 8,125 shares | | Charlie B. Kawwas, Ph.D. | 1,875 shares | 1,875 shares | 1,875 shares | 9,375 shares | | Thomas H. Krause, Jr. | 2,000 shares | 2,000 shares | 2,000 shares | 10,000 shares |
| | | | | | | | | | | | | Performance Period | 2018-2019 | 2018-2020 | 2018-2021 | | Relative TSR Attainment | 71st Percentile | 64th Percentile | 91st Percentile | | Percentage of Target Shares Earned | 100% | 100% | 100% | | Kirsten M. Spears | 1,250 shares | 1,250 shares | 1,250 shares | | Mark D. Brazeal | 1,625 shares | 1,625 shares | 1,625 shares | | Charlie B. Kawwas, Ph.D. | 1,875 shares | 1,875 shares | 1,875 shares | | Thomas H. Krause, Jr. | 2,000 shares | 2,000 shares | 2,000 shares | | | | |
 2018 PSU 
| 52 | | | | | | | | | | | | | | | | Achievement Factor | | Performance Period
Relative TSR Achieved | 2023 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS The PSU Multi-Year Awards that commenced vesting in Fiscal Year 2019 are subject to four overlapping performance periods ending on each March 1st of 2020, 2021, 2022 and 2023. The table below sets forth the Relative TSR attainment and the number of shares earned for the completed performance period, as confirmed by the Compensation Committee. | Performance Period | 2019-2020 | 2019-2021 | 2019-2022 | | Relative TSR Attainment | 48th Percentile | 90th Percentile | 90th Percentile | Percentage of Target
Shares Earned | 95.76% | 100% | 100% | | Kirsten M. Spears | 1,495 shares | 1,562 shares | 1,562 shares | | Mark D. Brazeal | 1,795 shares | 1,875 shares | 1,875 shares | | Charlie B. Kawwas, Ph.D. | 2,394 shares | 2,500 shares | 2,500 shares | | Thomas H. Krause, Jr. | 2,394 shares | 2,500 shares | 2,500 shares |
| | | | | | | | | | | | | Performance Period | 2019-2020 | 2019-2021 | | | Relative TSR Attainment | 48th Percentile | 90th Percentile | | | Percentage of Target Shares Earned | 95.76% | 100% | | | Kirsten M. Spears | 1,495 shares | 1,562 shares | | | Mark D. Brazeal | 1,795 shares | 1,875 shares | | | Charlie B. Kawwas, Ph.D. | 2,394 shares | 2,500 shares | | | Thomas H. Krause, Jr. | 2,394 shares | 2,500 shares | | | | | |
 2019 PSU 
| | | | | | | | | | | | | Achievement
Factor | | Performance Period
Relative TSR Achieved |
The PSU Multi-Year Awards that commenced vesting in Fiscal Year 2020 are subject to four overlapping performance periods ending on each March 1st of 2021, 2022, 2023 and 2024. The table below sets forth the Relative TSR attainment and the number of shares earned for the completed performance period, as confirmed by the Compensation Committee. | Performance Period | 2020-2021 | 2020-2022 | | Relative TSR Attainment | 92nd Percentile | 93rd Percentile | Percentage of Target
Shares Earned | 100% | 100% | | Kirsten M. Spears | 1,562 shares | 1,562 shares | | Mark D. Brazeal | 1,875 shares | 1,875 shares | | Charlie B. Kawwas, Ph.D. | 2,500 shares | 2,500 shares | | Thomas H. Krause, Jr. | 2,500 shares | 2,500 shares |
2020 PSU 
The promotion PSU Award granted to Ms. Spears in December 2020 is subject to four overlapping performance periods ending on each March 1st of 2021, 2022, 2023 and 2024 and vest, to the extent earned, on the anniversary of the grant date, subject to Ms. Spears’ continued employment on the vesting date. The table below sets forth the Relative TSR attainment and the number of shares earned for the completed performance period, as confirmed by the Compensation Committee. The shares earned for the performance period ending March 1, 2022 vest on December 15, 2022. | Performance Period | 2020-2021 | 2020-2022 | | Relative TSR Attainment | 92nd Percentile | 93rd Percentile | Percentage of Target Shares
Earned | 100% | 100% | | Kirsten M. Spears | 3,250 shares | 3,250 shares |
SPEARS PROMOTION PSU 
COMPENSATION DISCUSSION AND ANALYSIS The PSU Multi-Year Awards that commenced vesting in Fiscal Year 2021 are subject to four overlapping performance periods ending on each March 1st of 2022, 2023, 2024 and 2025. The table below sets forth the Relative TSR attainment and the number of shares earned for the completed performance period, as confirmed by the Compensation Committee. | Performance Period | 2020-2021 | | 2021-2022 | | Relative TSR Attainment | 92nd69th Percentile
| | | Percentage of Target Shares
Earned | 100% | | | | Kirsten M. Spears | 1,562 shares | | | | Mark D. Brazeal | 1,875 shares | | | | Charlie B. Kawwas, Ph.D. | 2,500 shares | | | | Thomas H. Krause, Jr. | 2,500 shares |
2021 PSU 
The Brazeal Promotion PSU is subject to four overlapping performance periods ending on each March 1st of 2022, 2023, 2024 and 2025 and vest, to the extent earned, on the anniversary of the grant date, subject to Mr. Brazeal’s continued employment. The table below sets forth the Relative TSR attainment and the number of shares earned for the performance period ending March 1, 2022, as confirmed by the Compensation Committee, which vest on December 15, 2022. | Performance Period | 2021-2022 | | Relative TSR Attainment | | | |
 | | | | | | | | | | | 69th Percentile | Percentage of Target Shares
Earned | Achievement
Factor100% | | Shares earned | | Performance Period
Relative TSR Achieved2,000 shares |
BRAZEAL PROMOTION PSU 
| | | COMPENSATION DISCUSSION AND ANALYSIS |
The FY 2022 Strategic Award granted to Mr. Tan consisted of 18,937 shares that could be earned upon satisfaction of pre-approved metrics and milestones related to corporate strategy, acquisition strategy and leadership development during the performance period from November 1, 2021 to October 30, 2022. Following Fiscal Year 2022, the independent directors confirmed that all of the metrics and milestones set forth in the FY 2022 Strategic Award were satisfied during the performance period and, as a result, Mr. Tan earned the 18,937 shares, which vested immediately. Additional Compensation Practices and Policies Employee Stock Purchase Plan Executives employed by our participating subsidiaries, including all of our NEOs, may also participate in our Employee Stock Purchase Plan (the “ESPP”). Our ESPP provides eligible employees with the opportunity to acquire Broadcom common stock through periodic payroll deductions, at a 15% discount, based on a six-month “look-back” period. Our ESPP is structured in the U.S. as a qualified plan under Section 423 COMPENSATION DISCUSSION AND ANALYSIS Other Compensation The Compensation Committee provides modest perquisites and other personal benefits to our executives on a case-by-case basis. Typically, the Compensation Committee will provide a perquisite to an executive in limited circumstances, such as where it believes that such benefit is appropriate to assist in the performance of the executive’s duties, to make the executive more efficient and effective, and for recruitment, motivation, retention or security purposes. For example, in Fiscal Year 2021,2022, Mr. Tan received reimbursement for travel to his residence in Pennsylvania and a car service for business-related travel in the San Francisco Bay Area, both of which wereas approved by the independent directors. For additional information on the perquisites and other personal benefits provided to our NEOs in Fiscal Year 2021,2022, see the “ Fiscal Year 20212022 Summary Compensation Table” below.Severance and Change in Control Benefits The Compensation Committee believes that severance and change in control arrangements are important parts of the overall compensation program for our NEOs. Severance arrangements provide a stable work environment and are used primarily to attract and retain individuals with the requisite experience and ability to drive our success. Change in control provisions help to secure the continued employment and dedication of our NEOs, to reduce any concern that they might have regarding their own continued employment prior to or following a change in control of Broadcom and to promote continuity of management during a corporate transaction. Each of our NEOs (except Mr. Krause due to his resignation) is eligible for severance and change in control payments and benefits under their respective severance benefit agreement, including vesting acceleration of the equity awards following a Covered Termination (as defined below under “ Executive Compensation — Severance and Change in Control Agreements with Named Executive Officers; Death and Permanent Disability Policies; Retirement”) in connection with a change in control, which is commonly referred to as a “double trigger” provision. The Compensation Committee provides such payments and benefits to our NEOs based on its review of severance practices at the companies in our compensation peer group and as the result of arms’ length negotiations at the time our NEOs enter intocommence employment with Broadcom, when they are requested to take on additional responsibilities, or from time to time if deemed necessary or desirable to achieve parity with other NEOs or otherwise. Further, we believe our double trigger change in control arrangements protects stockholder value by allowing us the opportunity to deliver a motivated management team to any potential acquirer. If we did not offer any such change in control arrangements, our NEOs could be less motivated to pursue a potential acquisition even if such a transaction would benefit our stockholders, due to the possibility that they would lose the potential value of their unvested equity compensation upon an acquisition.For a summary of the material terms and conditions of these arrangements, as well as an estimate of the post-employment payments and benefits that our NEOs are eligible to receive, see “ Executive Compensation – Severance and Change in Control Agreements with Named Executive Officers; Death and Permanent Disability Policies; Retirement” below.Fiscal Year 20222023 Compensation Actions The Compensation CommitteeEquity Awards Granted in Fiscal Year 2023 On October 31, 2022 (the “Grant Date”), in connection with the annual equity incentive award grant review and in consultation with Meridian, the independent directors carefully considered the desirability of retaining and further incentivizinggranted Mr. Tan a PSU award with the opportunity to create additionalearn up to 1,000,000 shares contingent on both achievement of formidable stock price performance milestones and continued service requirements over a five-year period (the “FY 2023 Tan PSU Award”). In addition, the Compensation Committee, in consultation with Meridian, granted Dr. Kawwas on the Grant Date a PSU award with the opportunity to earn up to 300,000 shares with vesting terms similar to the FY 2023 Tan PSU Award and contingent on both achievement of formidable stock performance milestones and continued service requirements over a five-year period (the “FY 2023 Kawwas PSU Award,” and together with the FY 2023 Tan PSU Award, the “FY 2023 PSU Awards”). COMPENSATION DISCUSSION AND ANALYSIS The grant date fair value of the maximum vesting opportunities for our stockholders. They also considered the appropriate market valuethese FY 2023 PSU Awards (per ASC 718) is estimated to be approximately $161,000,000 for the grant of equity awards to Mr. Tan in comparison to awards granted by our peer group companies and in connection with our corporate strategy. In light$48,000,000 for Dr. Kawwas. Leading Broadcom through the Next Stage of these considerations, Mr. Tan was granted an annual PSU award that vests based on our Relative TSR and absolute TSR (the “Fiscal Year 2022 TSR PSU Award”) and PSU award that vests depending on the satisfaction of pre-approved metrics and milestones related to certain strategic objectives (the “Fiscal Year 2022 Strategic PSU Award”), as described below.
| | | COMPENSATION DISCUSSION AND ANALYSIS |
In September 2021, theGrowthThe independent directors approved the Fiscal Year 2022 TSRFY 2023 Tan PSU Award with a target value of $26,000,000 and effective as of and based on the closing priceto incentivize achievement of our common stock on November 1, 2021. The target numberlong-term growth strategy and drive substantial return to stockholders by (i) aligning Mr. Tan’s interests with those of shares was determinedour stockholders by dividing the target value by the closing priceshifting material elements of Broadcom’s common stock on November 1, 2021 (rounded downMr. Tan’s compensation opportunity to the nearest share).performance-based compensation and (ii) providing a significant incentive for Mr. Tan may earn up to 300%continue to lead Broadcom, while executing critical growth initiatives, including the pending acquisition of VMware. Under Mr. Tan’s leadership, we increased our TSR by over 3,700% since our initial public offering in 2009. Mr. Tan has been and continues to be the target numberdriving force behind our transformation from a semiconductor company into the world’s leading infrastructure technology company that is poised to continue our platform expansion to accelerate innovation and address the most complex information technology infrastructure needs. The independent directors believe that Mr. Tan’s leadership is a key factor for our ongoing success and growth potential, and thus, a long-term equity incentive award that motivates Mr. Tan to realize our success and growth potential is in the best interests of all of our stockholders. The Compensation Committee approved the FY 2023 Kawwas PSU Award to reflect Dr. Kawwas’ promotion as President, Semiconductor Solutions Group in July 2022 and increased responsibilities in overseeing our broad semiconductor portfolio in addition to continuing to oversee worldwide semiconductor sales and global operations, and to provide a significant incentive for Dr. Kawwas to continue to contribute towards the achievement of our long-term performance goals. Incentive Opportunities Aligned with Stockholders The FY 2023 PSU Awards are 100% at risk and deliver value to Mr. Tan and Dr. Kawwas only if our stockholders have also received significant and sustained value appreciation during the five-year performance period. The shares based on our Relative TSR and absolute TSR performance measured overunder the FY 2023 PSU Awards can be earned only during the period beginning on November 1, 2021after the third anniversary of the Grant Date and ending on November 3, 2024 as confirmed by the independent directors and subject to Mr. Tan’s continued employmentconcluding on the vesting date, November 3, 2024. However, if Mr. Tan retires from Broadcom on or after the last day of Fiscal Year 2022, the performance period will end on the date of his retirement notice and vest on his retirement date. If Mr. Tan’s employment terminates due to his death or permanent disability prior to November 3, 2024, 100%fifth anniversary of the Fiscal Year 2022 TSR PSU Award will automatically vest with respect toGrant Date (the “Earning Period”) (i) if our consecutive 20-trading days closing stock price average (the “Average Stock Price”) meets or exceeds the target number of shares. In October 2021, the independent directors also approved the Fiscal Year 2022 Strategic PSU Award with a maximum value of $10,000,000pre-established and effective as of and based on the closingformidable per share stock price of our common stock on November 1, 2021. The maximum number of shares was determined by dividing the maximum value by the closing price of Broadcom’s common stock on November 1, 2021 (rounded down to the nearest share). Mr. Tan will not earn any shares unless the independent directors confirm in their sole discretion that all of the pre-approved metrics and milestones related to corporate strategy, acquisition strategy and leadership development are satisfiedhurdles set forth below during the performance period from November 1, 2021 to October 30, 2022, in which case Mr. Tan will earn the maximum numberEarning Period and (ii) there is no termination of shares. Subject to Mr. Tan’s continued employment, on the vesting date and achievement of the award’s performance goals, the Fiscal Year 2022 Strategic PSU Award will vest on October 30, 2022. If Mr. Tan’s employment terminates due to his deathconsultancy or permanent disability prior to October 30, 2022, 100% of the Fiscal Year 2022 Strategic PSU Award will automatically vest with respect to the maximum number of shares.
In December 2021, the Compensation Committee retained Meridian,Board membership, except as its independent compensation consultant to assume the role previously held by Compensia. The Compensation Committee has assessed the independence of Meridian pursuant to the six independence factorsotherwise set forth in the SEC and Nasdaq rules and concluded that Meridian was independent and its work forPSU agreements. One-third of the Compensation Committee did not raise any conflict of interest. Starting in Fiscal Year 2022, Meridian will provide consulting servicesshares subject to the Compensation CommitteeFY 2023 PSU Awards will be earned for each per share stock price hurdle attained, with no interpolation between the price hurdles.Stock Price
Performance Milestone | Number of Tan PSUs
that Could be Earned | Number of Kawwas PSUs
that Could be Earned | | $ 825 | 333,333 | 100,000 | | $ 950 | 333,334 | 100,000 | | $ 1,125 | 333,333 | 100,000 |
The stock price hurdles reflect a 75.5%, 102.1% and 139.3% increase to the independent directors. The Compensation Committee has reliedGrant Date closing stock price over a five-year period. If the Average Stock Price does not equal or exceed $825 during the Earning Period, the FY 2023 PSU Awards will be forfeited in full on Meridian to review management’s Fiscal Year 2021 annual assessmentthe fifth anniversary of compensation-related risks. Meridian will not provide any other services to Broadcom except advising the Compensation Committee and the independent directors on compensation-related matters.
Grant Date.| 56 | | | COMPENSATION COMMITTEE REPORT2023 Proxy Statement |
COMPENSATION COMMITTEE REPORT COMPENSATION COMMITTEE REPORT The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis section included in this Proxy Statement, as required by Item 402(b) of Regulation S-K. Based upon such review and related discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement for the Annual Meeting and Broadcom’s Annual Report on Form 10-K for the Fiscal Year 2021. 2022.COMPENSATION COMMITTEE
Harry L. You, Chairperson
Diane M. Bryant
Check Kian Low
Eddy W. Hartenstein
| Broadcom Inc. | | | EXECUTIVE COMPENSATION57 |
EXECUTIVE COMPENSATION EXECUTIVE COMPENSATION Fiscal Year 20212022 Summary Compensation Table The following table sets forth information about compensation awarded to, paid to, or earned by our NEOs during Fiscal Years 2022, 2021 2020 and 2019, except in the case of Ms. Spears who was not a NEO in Fiscal Year 2019.2020. Our NEOs consist of our CEO, our CFO, and each of our three other most highly compensated executive officers serving at the end of Fiscal Year 2021. | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal
Positions | Fiscal
Year | Salary
($) | Bonus ($) | Stock
Awards
($)(1) | Non-Equity
Incentive Plan
Compensation
($)(2) | All Other
Compensation
($) | Total
($) | | Hock E. Tan | 2021 | 1,200,000 | — | 54,056,808(3) | 5,400,000 | 46,819(4) | 60,703,627 | President and Chief Executive Officer | 2020 | 1,171,154 | — | — | 2,452,930 | 71,768 | 3,695,852 | | 2019 | 1,100,000 | — | — | 1,202,281 | 64,607 | 2,366,888 | | | | | | | | | Kirsten M. Spears(5) | 2021 | 392,781 | — | 13,451,047 | 584,233 | 17,596(6) | 14,445,657 | | Chief Financial Officer and Chief Accounting Officer | 2020 | 332,964 | — | — | 187,205 | 16,904 | 537,073 | | | | | | | | | | | | | | | | | | | | | | | Mark D. Brazeal(7) | 2021 | 500,000 | — | — | 818,750 | 17,400(5) | 1,336,150 | | Chief Legal and Corporate Affairs Officer | 2020 | 485,577 | 455,062 | — | 544,938 | 43,490 | 1,529,067 | | 2019 | 450,000 | — | 12,804,863 | 285,436 | 16,800 | 13,557,099 | | | | | | | | | Charlie B. Kawwas, Ph.D.(8) | 2021 | 678,462 | — | 20,115,046(9) | 1,517,885 | 17,400(5) | 22,328,793 | | Chief Operating Officer | 2020 | 496,691 | — | — | 518,478 | 17,100 | 1,032,269 | | 2019 | 488,529 | — | 17,073,150 | 351,418 | 16,800 | 17,929,897 | | | | | | | | | Thomas H. Krause, Jr.(10) | 2021 | 678,462 | — | 20,115,046(9) | 1,011,923 | 17,400(5) | 21,822,831 | | President, Broadcom Software Group | 2020 | 471,154 | — | — | 527,638 | 17,100 | 1,015,892 | | 2019 | 400,000 | — | 17,073,150 | 355,443 | 16,800 | 17,845,393 | | | | | | | | |
(1) Represents the grant date fair value of service-based RSU awards and PSU awards, determined in accordance with ASC 718. Although the 2019 Multi-Year Equity Awards have four staggered vesting start dates of March 15, 2019, 2020, 2021 and 2022, under ASC 718 we were required to include the grant date fair value of all the 2019 Multi-Year Equity Awards in Fiscal Year 2019. As the PSU awards are not subject to performance conditions as defined under ASC 718, the maximum grant date fair values for such awards do not differ from the values presented in this table. The amounts in this column do not reflect compensation actually received by the NEOs or the actual value that may be recognized by the NEOs. For a discussion of the valuation assumptions used in the calculations, see Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of our 2021 Annual Report filed with the SEC on December 17, 2021.
(2) Represents amounts paid under the APB Plan for each fiscal year. See the plan description in “Compensation Discussion and Analysis—Elements of Executive Compensation—Annual Cash Incentive Bonus Plan” above.
(3) Although the stock grant approved by the independent directors has a December 15, 2020 effective date, the stock award was contingent upon stockholder approval of the 2012 Plan at the 2021 annual meeting. The amount represents the value of the stock awardwell as of April 5, 2021, the date when the stockholders approved the 2012 Plan. Target market value of the stock award was $25,000,000 when approved by the independent directors.
(4) Represents $2,020 in expense reimbursements for travel to Mr. Tan’s residence in Pennsylvania, $17,400 401(k) plan employer matching contribution and $27,400 for car service.
(5) Ms. Spears was promoted to Chief Financial Officer on December 10, 2020.
(6) Represents 401(k) plan employer matching contributions.
(7) Following the end of Fiscal Year 2021, Mr. Brazeal was promoted to Chief Legal and Corporate Affairs Officer.
(8) Dr. Kawwas was promoted to Chief Operating Officer on December 10, 2020.
(9) Although the stock grants approved by the Compensation Committee has a December 15, 2020 effective date, the stock awards were contingent upon stockholder approval of the 2012 Plan at the 2021 annual meeting. The amount represents the accounting value of the stock awards as of April 5, 2021, the date when the stockholders approved the 2012 Plan. Target market value of the stock awards was $15,000,000 when approved by the Compensation Committee.
(10) Mr. Krause, served as our Chief Financial Officer until his promotion to President, Infrastructure Software Group on December 10, 2020. In August 2021, Infrastructure Software Group changed its name towho resigned from Broadcom Software Group.
in July 2022.| | Name and Principal
Positions | | Fiscal
Year | | Salary
($) | | Bonus
($) | | Stock
Awards
($)(1) | | Non-Equity
Incentive Plan
Compensation
($)(2) | | All Other Compensation
($) | | Total
($) | | | | Hock E. Tan | | 2022 | | 1,200,000 | | — | | 53,913,448 | (3) | | 5,400,000 | | 93,523 | (4) | | 60,606,971 | | | | President and
Chief Executive Officer | | 2021 | | 1,200,000 | | — | | 54,056,808 | | | 5,400,000 | | 46,819 | | | 60,703,627 | | | | | 2020 | | 1,171,154 | | — | | — | | | 2,452,930 | | 71,768 | | | 3,695,852 | | | | Kirsten M. Spears | | 2022 | | 403,969 | | — | | — | | | 641,854 | | 18,300 | (5) | | 1,064,124 | | | | Chief Financial Officer and
Chief Accounting Officer | | 2021 | | 392,781 | | — | | 13,451,047 | | | 584,233 | | 17,596 | | | 14,445,657 | | | | | 2020 | | 332,964 | | — | | — | | | 187,205 | | 16,904 | | | 537,073 | | | | Mark D. Brazeal(6) | | 2022 | | 504,962 | | — | | 12,474,520 | | | 885,701 | | 18,300 | (5) | | 13,883,483 | | | | Chief Legal and
Corporate Affairs Officer | | 2021 | | 500,000 | | — | | — | | | 818,750 | | 17,400 | | | 1,336,150 | | | | | 2020 | | 485,577 | | 455,062 | | — | | | 544,938 | | 43,490 | | | 1,529,067 | | | | Charlie B. Kawwas, Ph.D.(7) | | 2022 | | 706,946 | | — | | — | | | 1,589,720 | | 18,300 | (5) | | 2,314,967 | | | | President, Semiconductor
Solutions Group | | 2021 | | 678,462 | | — | | 20,115,046 | | | 1,517,885 | | 17,400 | | | 22,328,793 | | | | | 2020 | | 496,691 | | — | | — | | | 518,478 | | 17,100 | | | 1,032,269 | | | | Thomas H. Krause, Jr.(8) | | 2022 | | 498,965 | | — | | — | | | — | | 18,300 | (5) | | 517,265 | | | | Former President, Broadcom
Software Group | | 2021 | | 678,462 | | — | | 20,115,046 | | | 1,011,923 | | 17,400 | | | 21,822,831 | | | | | 2020 | | 471,154 | | — | | — | | | 527,638 | | 17,100 | | | 1,015,892 | |
| (1) | Represents the grant date fair value of RSU and PSU awards, determined in accordance with ASC 718. As the PSU awards are not subject to performance conditions as defined under ASC 718, the maximum grant date fair values for such awards do not differ from the values presented in this table. The amounts in this column do not reflect compensation actually received by the NEOs or the actual value that may be recognized by the NEOs. For a discussion of the valuation assumptions used in the calculations, see Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of our 2022 Annual Report filed with the SEC on December 16, 2022. | EXECUTIVE COMPENSATION | (2) | Represents amounts paid under the APB Plan for each fiscal year. See the plan description in “Compensation Discussion and Analysis—Elements of Executive Compensation—Annual Cash Incentive Bonus Plan” above. | | (3) | Represents the grant date fair value of two PSU awards, determined in accordance with ASC 718. The aggregate target market value of these two PSU awards on the grant date was $36,000,000. | | (4) | Represents $7,788 in expense reimbursements for travel to Mr. Tan’s residence in Pennsylvania, $18,300 401(k) plan employer matching contribution and $67,435 for car service. | | (5) | Represents 401(k) plan employer matching contributions. | | (6) | Mr. Brazeal was promoted to Chief Legal and Corporate Affairs Officer on December 15, 2021. | | (7) | Dr. Kawwas was promoted to President, Semiconductor Solutions Group on July 11, 2022. | | (8) | Mr. Krause resigned from Broadcom on July 15, 2022. |
EXECUTIVE COMPENSATION Fiscal Year 20212022 Grants of Plan-Based Awards Table The following table sets forth information regarding grants of plan-based awards during Fiscal Year 20212022 to each of our NEOs. All equity awards were granted under the 2012 Plan, unless otherwise noted. | | | | | | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(2) | | Estimated Future Payouts
Under Equity Incentive
Plan Awards | All Other Stock
Awards:
Number of
Shares of
Stock or
Units (#) | | Grant Date
Fair Value
of Stock
Awards
($)(3) | | | Name | | Approval
Date(1) | | Grant
Date(1) | | Threshold
($) | Target
($) | Maximum
($) | | Threshold
(#) | Target
(#) | Maximum
(#) | | | | Hock E. Tan | | | | | | 300,000 | 2,400,000 | 5,400,000 | | | | | | | | | | | | 09/01/21 | | 11/01/21 | | | | | | 12,309(4) | 49,237(4) | 147,711(4) | | | 44,186,269 | | | | | 10/27/21 | | 11/01/21 | | | | | | —(5) | 18,937(5) | —(5) | | | 9,727,179 | | | Kirsten M. Spears | | | | | | 25,234 | 403,739 | 817,570 | | | | | | | | | | Mark D. Brazeal | | | | | | 31,542 | 504,673 | 1,021,963 | | | | | | | | | | | | 12/14/21 | | 12/15/21 | | | | | | 1,000(6) | 8,000(6) | 16,000(6) | | | 7,680,360 | | | | | 12/14/21 | | 12/15/21 | | | | | | | | | 8,000(7) | | 4,794,160 | | | Charlie B. Kawwas, Ph.D. | | | | | | 88,318 | 706,542 | 1,589,720 | | | | | | | | | | Thomas H. Krause, Jr.(8) | | | | | | — | — | — | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(3) | | Name | Approval Date(1) | Grant Date(1) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | Hock E. Tan | | | 300,000 | 2,400,000 | 5,400,000 | | | | | | | 12/09/20 | 04/05/21 | | | | 14,950 (4) | 59,800(4) | 179,400(4) | | 54,056,808 | | | | | | | | | | | | | | Kirsten M. Spears | | | 23,191 | 371,057 | 751,390 | | | | | | | 12/08/20 | 12/15/20 | | | | 1,625(5) | 13,000(5) | 26,000(5) | | 8,483,357 | | | 12/08/20 | 12/15/20 | | | | | | | 13,000(6) | 4,967,690 | | | | | | | | | | | | | | Mark D. Brazeal | | | 31,250 | 500,000 | 1,012,500 | | | | | | | | | | | | | | | | | | Charlie B. Kawwas, Ph.D. | | | 84,327 | 674,615 | 1,517,885 | | | | | | | 12/08/20 | 04/05/21 | | | | 8,970 (7) | 17,940(7) | 35,880(7) | | 11,738,860 | | | 12/08/20 | 04/05/21 | | | | | | | 17,940 (8) | 8,376,186 | | | | | | | | | | | | | | Thomas H. Krause, Jr. | | | 84,327 | 674,615 | 1,517,885 | | | | | | | 12/08/20 | 04/05/21 | | | | 8,970 (7) | 17,940(7) | 35,880(7) | | 11,738,860 | | | 12/08/20 | 04/05/21 | | | | | | | 17,940(8) | 8,376,186 | |
(1) The approval date represents the date on which the equity award was approved by the Compensation Committee or the independent directors, as applicable. The grant date is determined in accordance with ASC 718. Awards in this table with a grant date listed as April 5, 2021 were granted effective as of December 15, 2020 but contingent upon stockholder approval of the 2012 Plan at the 2021 annual meeting.
(2) Represents potential payouts under the APB Plan for Fiscal Year 2021. Target bonus amounts were as follows, in each case, as a percentage of eligible earnings: Mr. Tan 200%, Ms. Spears 95% (represents pro-rated percentage due to her promotion on December 10, 2020), Mr. Brazeal 100%, Dr. Kawwas 100% and Mr. Krause 100%. The threshold amounts for Mr. Tan, Dr. Kawwas and Mr. Krause was 12.5% of their respective target bonus amounts, calculated based on the achievement of a single corporate goal at 50% of the target for such goal and with the individual performance multiplier of 50%. The threshold amount for each of Ms. Spears and Mr. Brazeal was 6.25% of their respective target bonus amounts, calculated based on the achievement of a single corporate or divisional goal at 25% of the target for such goal and with the individual performance multiplier of 50%. The maximum bonus payable was 225% of the target bonus amount for Mr. Tan, Dr. Kawwas and Mr. Krause, which assumes maximum (150%) performance for each corporate goal and with the individual performance multiplier of 150%.The maximum bonus payable was 202.5% of the target bonus amount for each of Ms. Spears and Mr. Brazeal, which assumes maximum (150%) performance for each corporate goal and maximum (120%) performance for their divisional goals and with the maximum individual performance multiplier of 150%.
(3) Represents the grant date fair value of the equity awards, as determined in accordance with ASC 718. For a discussion of the valuation assumptions used in the calculations, see Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of our 2021 Annual Report filed with the SEC on December 17, 2021.
(4) Represents a PSU award earned based on our Relative TSR and absolute TSR performance measured over the period beginning on November 2, 2020 and ending on October 29, 2023, as determined by the independent directors and subject to Mr. Tan’s continued employment on the vesting date of October 29, 2023. In the aggregate, Mr. Tan may earn up to 300% of the target number of shares if our Relative TSR is at or above the 75th percentile of the S&P 500 Index and absolute TSR is not negative, provided that no shares will be earned if our Relative TSR is below the 25th percentile of the S&P 500 Index. However, as Mr. Tan has reached the age of 70, if he retires from Broadcom on or after the last day of Fiscal Year 2021, the performance period will end on the date of his retirement notice and vest on his retirement date. In the event Mr. Tan’s employment terminates due to his death or permanent disability prior to October 29, 2023, 100% of the PSU award will automatically vest with respect to the target number of shares.
(5) Represents a PSU award earned based on our Relative TSR and absolute TSR over four overlapping performance periods that begin on March 2, 2020 and end on March 1 of 2021, 2022, 2023 and 2024, as determined by the Compensation Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, Ms. Spears may earn up to 200% of the target number of shares if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned for a performance period if our Relative TSR is below the 25th percentile of the S&P 500 Index. This PSU award will vest on each anniversary of the grant date, subject to Ms. Spears’ continued employment as of the vesting dates.
(6) Represents a service-based RSU award that will vest over four years at a rate of 25% per year on each anniversary of the grant date, subject to Ms. Spears’ continued employment on the relevant vesting dates.
(7) Represents PSU awards earned based on our Relative TSR and absolute TSR measured over the period beginning on November 2, 2020 and ending on October 29, 2023, as determined by the Compensation Committee, subject to the NEO’s continued employment on the vesting date of October 29, 2023. In the aggregate, the NEO may earn up to 200% of the target number of shares if our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned if our Relative TSR is below the 25th percentile of the S&P 500 Index.
(8) Represents service-based RSU awards that will vest over three years at a rate of one-third on each anniversary of December 15, 2020, subject to the NEO’s continued employment on the relevant vesting dates.
| (1) | The approval date represents the date on which the equity award was approved by the Compensation Committee or the independent directors, as applicable. The grant date is determined in accordance with ASC 718. |
EXECUTIVE COMPENSATION | (2) | Represents potential payouts under the APB Plan for Fiscal Year 2022. Target bonus amounts were as follows, in each case, as a percentage of eligible earnings: Mr. Tan 200%, Ms. Spears 100%, Mr. Brazeal 100%, and Dr. Kawwas 100%. The threshold amounts for Mr. Tan and Dr. Kawwas was 12.5% of their respective target bonus amounts, calculated based on the achievement of a single corporate goal at 50% of the target for such goal and with the individual performance multiplier of 50%. The threshold amount for each of Ms. Spears and Mr. Brazeal was 6.25% of their respective target bonus amounts, calculated based on the achievement of a single corporate or divisional goal at 25% of the target for such goal and with the individual performance multiplier of 50%. The maximum bonus payable was 225% of the target bonus amount for Mr. Tan and Dr. Kawwas, which assumes maximum (150%) performance for each corporate goal and with the individual performance multiplier of 150%.The maximum bonus payable was 202.5% of the target bonus amount for each of Ms. Spears and Mr. Brazeal, which assumes maximum (150%) performance for each corporate goal and maximum (120%) performance for their divisional goals and with the individual performance multiplier of 150%. |
| (3) | Represents the grant date fair value of the equity awards, as determined in accordance with ASC 718. For a discussion of the valuation assumptions used in the calculations, see Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of our 2022 Annual Report filed with the SEC on December 16, 2022. |
| (4) | Represents the FY 2022 TSR PSU Award earned based on our Relative TSR and absolute TSR performance measured over the period beginning on November 1, 2021 and ending on November 3, 2024, as determined by the independent directors and subject to Mr. Tan’s continued employment on the vesting date of November 3, 2024. In the aggregate, Mr. Tan may earn up to 300% of the target number of shares if our Relative TSR is at or above the 75th percentile of the S&P 500 Index and absolute TSR is not negative, provided that no shares will be earned if our Relative TSR is below the 25th percentile of the S&P 500 Index. |
| (5) | Represents the FY 2022 Strategic PSU Award earned based on the achievement of pre-approved metrics and milestones related to corporate strategy, acquisition strategy and leadership development over the period beginning on November 1, 2021 and ending on October 30, 2022, as determined by the independent directors and subject to Mr. Tan’s continued employment on the vesting date of October 30, 2022. |
| (6) | Represents the Brazeal Promotion PSUs earned based on our Relative TSR and absolute TSR over four overlapping performance periods that begin on March 2, 2021 and end on March 1 of 2022, 2023, 2024 and 2025, as determined by the Compensation Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, Mr. Brazeal may earn up to 200% of the target number of shares if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned for a performance period if our Relative TSR is below the 25th percentile of the S&P 500 Index. The Brazeal Promotion PSUs, to the extent earned, will vest on each anniversary of the grant date, subject to Mr. Brazeal's continued employment as of the vesting dates. |
| (7) | Represents the Brazeal Promotion RSUs that will vest over four years at a rate of 25% per year on each anniversary of the grant date, subject to Mr. Brazeal’s continued employment on the relevant vesting dates. |
| (8) | Mr. Krause resigned from Broadcom in July 2022 and was not eligible to receive a payout under the APB Plan. If Mr. Krause had not left, as a percentage of eligible earnings, the target bonus amount was 100%. The threshold amount was 12.5% of the target bonus amount, calculated based on the achievement of a single corporate goal at 50% of the target for such goal and with the individual performance multiplier of 50%. The maximum bonus payable was 225% of the target bonus amount, which assumes maximum (150%) performance for each corporate goal and with the individual performance multiplier of 150%. Mr. Krause was not granted an equity award in Fiscal Year 2022. |
EXECUTIVE COMPENSATION Fiscal Year 20212022 Outstanding Equity Awards at Fiscal Year-End Table The following table sets forth information about stock options and RSU awards outstanding on October 31, 2021,30, 2022, the last day of Fiscal Year 2021,2022, held by each of our NEOs. | | | | | | | | | | | | | | | | | | | | | | | Stock Awards(1) | | | Name | Grant Date | Number of Shares or Units of Stock that Have Not Vested
(#) | Market Value of Shares or Units of Stock that Have Not Vested
($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested
(#) | Market Value of Unearned Shares, Units or Other Rights that Have Not Vested
($)(2) | 2019 Multi-Year Equity Award Vest Start Date | | Hock E. Tan | 04/05/21 | — | — | 179,400(3) | 95,381,598 | | | | | | | | | | Kirsten M. Spears | 12/15/17 | 750(4) | 398,753 | — | — | | | 03/15/18 | 1,250(4) | 664,588 | 6,250(5) | 3,322,938 | | | 01/15/19 | 3,124(6) | 1,660,937 | 9,443(7) | 5,020,560 | 03/15/19 | | 01/15/19 | 4,687(6) | 2,491,937 | 10,938(8) | 5,815,406 | 03/15/20 | | 01/15/19 | 6,250(6) | 3,322,938 | 6,250(9) | 3,322,938 | 03/15/21 | | 01/15/19 | 6,250(6) | 3,322,938 | 6,250(10) | 3,322,938 | 03/15/22 | | 12/15/20 | 13,000(4) | 6,911,710 | 26,000(11) | 13,823,420 | | | | | | | | | | Mark D. Brazeal | 12/15/17 | 750(4) | 398,753 | — | — | | | 03/15/18 | 1,625(4) | 863,964 | 8,125(5) | 4,319,819 | | | 01/15/19 | 3,750(6) | 1,993,763 | 11,330(7) | 6,023,821 | 03/15/19 | | 01/15/19 | 5,625(6) | 2,990,644 | 13,125(8) | 6,978,169 | 03/15/20 | | 01/15/19 | 7,500(6) | 3,987,525 | 7,500(9) | 3,987,525 | 03/15/21 | | 01/15/19 | 7,500(6) | 3,987,525 | 7,500(10) | 3,987,525 | 03/15/22 | | | | | | | | | Charlie B. Kawwas, Ph.D. | 12/15/17 | 1,250(4) | 664,588 | — | — | | | 03/15/18 | 1,875(4) | 996,881 | 9,375(5) | 4,984,406 | | | 01/15/19 | 5,000(6) | 2,658,350 | 15,106(7) | 8,031,407 | 03/15/19 | | 01/15/19 | 7,500(6) | 3,987,525 | 17,500(8) | 9,304,225 | 03/15/20 | | 01/15/19 | 10,000(6) | 5,316,700 | 10,000(9) | 5,316,700 | 03/15/21 | | 01/15/19 | 10,000(6) | 5,316,700 | 10,000(10) | 5,316,700 | 03/15/22 | | 04/05/21 | 17,940(12) | 9,538,160 | 35,880(13) | 19,076,320 | | | | | | | | | | Thomas H. Krause, Jr. | 12/15/17 | 1,250(4) | 664,588 | — | — | | | 03/15/18 | 2,000(4) | 1,063,340 | 10,000(5) | 5,316,700 | | | 01/15/19 | 5,000(6) | 2,658,350 | 15,106(7) | 8,031,407 | 03/15/19 | | 01/15/19 | 7,500(6) | 3,987,525 | 17,500(8) | 9,304,225 | 03/15/20 | | 01/15/19 | 10,000(6) | 5,316,700 | 10,000(9) | 5,316,700 | 03/15/21 | | 01/15/19 | 10,000(6) | 5,316,700 | 10,000(10) | 5,316,700 | 03/15/22 | | 04/05/21 | 17,940(12) | 9,538,160 | 35,880(13) | 19,076,320 | |
(1) The All outstanding, unvested stock awards shownpreviously granted to Mr. Krause were forfeited and cancelled upon his resignation from Broadcom in these columns areJuly 2022 and, as such, no stock awards granted under our Avago Technologies Limited 2009 Equity Incentive Plan (“Avago Plan”) unless otherwise noted.
(2) The amounts shown in this column represent the number of shares of common stock that have not vested multiplied by $531.67, the closing price per share of common stockwere outstanding on October 29, 2021, the last trading day of Fiscal Year 2021.
(3) Represents a PSU award granted under our 2012 Plan, based on attainment of the maximum performance level, given that the level of performance through October 31, 2021 is tracking above target. This PSU award is earned based on our Relative TSR and absolute TSR performance measured over the period beginning on November 2, 2020 and ending on October 29, 2023, as determined by the independent directors and subject to Mr. Tan’s continued employment on the vesting date of October 29, 2023. In the aggregate, Mr. Tan may earn up to 300% of the target number of shares if our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500 Index. However, as Mr. Tan has reached the age of 70, if he retires from Broadcom on or after the last day of Fiscal Year 2021, the performance period will end on the date of his retirement notice and vest on his retirement date.
(4) Represents service-based RSU awards that vest at a rate of 25% per year on each anniversary of the grant date, subject to the NEO’s continued employment through the applicable vesting date. The grant on December 15, 2020 to Ms. Spears was made under the LSI Corporation 2003 Equity Incentive Plan (the “LSI Plan”).
(5) Represents a PSU award based on attainment of the maximum performance level, given that the level of performance through October 31, 2021 is tracking at above target. The PSU award will vest at a rate of 25% per year on each anniversary of the grant date, subject to the NEO’s continued employment through the applicable vesting date and subject to the achievement of specified performance goals over each performance period, as determined by the Compensation Committee within 60 days following the end of each performance period. The performance criteria is based on our Relative TSR over four performance periods beginning on March 2, 2018 and ending on each of March 1 of 2019, 2020, 2021 and30, 2022. The number of shares that may be earned is capped at one-quarter of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares, if during the fourth performance period our Relative
| | Name | | Grant
Date | | Stock Awards(1) | | 2019 Multi-
Year Equity
Award Vest
Start Date | | | | | | Number of
Shares or
Units of Stock
that Have Not
Vested
(#) | | Market Value
of Shares or
Units of Stock
that Have Not
Vested
($)(2) | | Equity Incentive Plan
Awards: Number of
Unearned Shares,
Units or Other Rights
that Have
Not Vested
(#) | | Market Value
of Unearned
Shares, Units
or Other Rights
that Have Not
Vested
($)(2) | | | | | Hock E. Tan | | 04/05/21 | | — | | | — | | 179,400 | (3) | | 84,838,260 | | | | | | | | 11/01/21 | | — | | | — | | 147,711 | (4) | | 69,852,532 | | | | | | | | 11/01/21 | | — | | | — | | 18,937 | (5) | | 8,955,307 | | | | | | | | | | | | | | | | | | | | | | | | Kirsten M. Spears | | 01/15/19 | | 1,562 | (6) | | 738,670 | | 7,881 | (7) | | 3,726,925 | | 03/15/19 | | | | | | 01/15/19 | | 3,124 | (6) | | 1,477,340 | | 9,376 | (8) | | 4,433,910 | | 03/15/20 | | | | | | 01/15/19 | | 4,687 | (6) | | 2,216,482 | | 10,938 | (9) | | 5,172,580 | | 03/15/21 | | | | | | 01/15/19 | | 6,250 | (6) | | 2,955,625 | | 12,500 | (10) | | 5,911,250 | | 03/15/22 | | | | | | 12/15/20 | | 9,750 | (11) | | 4,610,775 | | 19,500 | (12) | | 9,221,550 | | | | | | | | 12/15/20 | | 3,250 | (13) | | 1,536,925 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mark D. Brazeal | | 01/15/19 | | 1,875 | (6) | | 886,688 | | 9,455 | (7) | | 4,471,270 | | 03/15/19 | | | | | | 01/15/19 | | 3,750 | (6) | | 1,773,375 | | 11,250 | (8) | | 5,320,125 | | 03/15/20 | | | | | | 01/15/19 | | 5,625 | (6) | | 2,660,063 | | 13,125 | (9) | | 6,206,813 | | 03/15/21 | | | | | | 01/15/19 | | 7,500 | (6) | | 3,546,750 | | 15,000 | (10) | | 7,093,500 | | 03/15/22 | | | | | | 12/15/21 | | 8,000 | (14) | | 3,783,200 | | 14,000 | (15) | | 6,620,600 | | | | | | | | 12/15/21 | | 2,000 | (16) | | 945,800 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Charlie B. Kawwas, Ph.D. | | 01/15/19 | | 2,500 | (6) | | 1,182,250 | | 12,606 | (7) | | 5,961,377 | | 03/15/19 | | | | | | 01/15/19 | | 5,000 | (6) | | 2,364,500 | | 15,000 | (8) | | 7,093,500 | | 03/15/20 | | | | | | 01/15/19 | | 7,500 | (6) | | 3,546,750 | | 17,500 | (9) | | 8,275,750 | | 03/15/21 | | | | | | 01/15/19 | | 10,000 | (6) | | 4,729,000 | | 20,000 | (10) | | 9,458,000 | | 03/15/22 | | | | | | 04/05/21 | | 11,960 | (17) | | 5,655,884 | | 35,880 | (18) | | 16,967,652 | | | |
| (1) | The awards shown in these columns are awards granted under our Avago Plan unless otherwise noted. |
EXECUTIVE COMPENSATION | (2) | The amounts shown in this column represent the number of shares of common stock that have not vested multiplied by $472.90, the closing price per share of common stock on October 28, 2022, the last trading day of Fiscal Year 2022. |
| (3) | Represents a PSU award granted under our 2012 Plan, based on attainment of the maximum performance level, given that the level of performance through October 30, 2022 is tracking above target. This PSU award is earned based on our Relative TSR and absolute TSR performance measured over the period of November 2, 2020 through October 29, 2023, as determined by the independent directors and subject to Mr. Tan’s continued employment on the vesting date of October 29, 2023. In the aggregate, Mr. Tan may earn up to 300% of the target number of shares if our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned if our Relative TSR is not at or above the 25th percentile of the S&P 500 Index. |
| (4) | Represents the FY 2022 TSR PSU Award granted under our 2012 Plan, based on attainment of the maximum performance level, given that the level of performance through October 30, 2022 is tracking above target. The FY 2022 TSR PSU Award is earned based on our Relative TSR and absolute TSR performance measured over the period of November 1, 2021 through November 3, 2024, as determined by the independent directors and subject to Mr. Tan’s continued employment on the vesting date of November 3, 2024. In the aggregate, Mr. Tan may earn up to 300% of the target number of shares if our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned if our Relative TSR is not at or above the 25th percentile of the S&P 500 Index. |
| (5) | Represents the FY 2022 Strategic PSU Award granted under our 2012 Plan that is earned based on the achievement of all preset metrics and milestones related to corporate strategy, acquisition strategy and leadership development during the performance period of November 1, 2021 through October 30, 2022, as determined by the independent directors determination and subject to Mr. Tan’s continued employment on the vesting date of October 30, 2022. Following Fiscal Year 2022, the independent directors determined that all preset metrics and milestones had been achieved and the shares were issued to Mr. Tan. |
(6) Represents a service-based RSU Multi-Year Award that will vest at a rate of 25% per year on each anniversary of the applicable vesting start date, subject to the NEO’s continued employment through the relevant vesting date. The 2019 Multi-Year Equity Awards have staggered vesting start dates of March 15, 2019, 2020, 2021 and 2022.
(7) Represents a PSU Multi-Year Award based on attainment of the maximum performance level, given that the level of performance through October 31, 2021 is tracking at above target. The PSU award will vest at a rate of 25% per year on each anniversary of the March 15, 2019, subject to the NEO’s continued employment through the applicable vesting date and subject to the achievement of specified performance goals over each performance period, as determined by the Compensation Committee within 60 days following the end of each performance period. The performance criteria is based on our Relative TSR over four performance periods beginning on March 2, 2019 and ending on each of March 1 of 2020, 2021, 2022 and 2023. The number of shares that may be earned is capped at one-quarter of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500 Index. Our Relative TSR for the first performance period was at the 48th percentile and for the second performance period was at the 90th percentile and, as a result, 23.9% and 25% of the PSU award was earned in Fiscal Year 2020 and Fiscal Year 2021, respectively. The amounts shown in the table reflect the shares that may be earned with respect to the remaining performance periods.
(8) Represents a PSU Multi-Year Award based on attainment of the maximum performance level, given that the level of performance through October 31, 2021 is tracking at above target. The PSU award will vest at a rate of 25% per year on each anniversary of March 15, 2020, subject to the NEO’s continued employment through the applicable vesting date and subject to the achievement of specified performance goals over each performance period, as determined by the Compensation Committee within 60 days following the end of each performance period. The performance criteria is based on our Relative TSR over four performance periods beginning on March 2, 2020 and ending on each of March 1 of 2021, 2022, 2023 and 2024. The number of shares that may be earned is capped at one-quarter of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500 Index. Our Relative TSR for the first performance period was at the 92nd percentile and, as a result, 25% was earned in Fiscal Year 2021. The amounts shown in the table reflect the shares that may be earned with respect to the remaining performance periods.
(9) Represents a PSU Multi-Year Award based on attainment of the target performance level, given that the level of performance through October 31, 2021 is tracking at below target. The PSU award will vest at a rate of 25% per year on each anniversary of March 15, 2021, subject to the NEO’s continued employment through the applicable vesting date and subject to the achievement of specified performance goals over each performance period, as determined by the Compensation Committee within 60 days following the end of each performance period. The performance criteria is based on our Relative TSR over four performance periods beginning on March 2, 2021 and ending on each of March 1 of 2022, 2023, 2024 and 2025. The number of shares that may be earned is capped at one-quarter of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares for each PSU award, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500 Index.
(10) Represents a PSU Multi-Year Award based on attainment of the target performance level, given that the level of performance through October 31, 2021 is tracking at below target. The PSU award will vest at a rate of 25% per year on each anniversary of March 15, 2022, subject to the NEO’s continued employment through the applicable vesting date and subject to the achievement of specified performance goals over each performance period, as determined by the Compensation Committee within 60 days following the end of each performance period. The performance criteria is based on our Relative TSR over four performance periods beginning on March 2, 2022 and ending on each of March 1 of 2023, 2024, 2025 and 2026. The number of shares that may be earned is capped at one-quarter of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares for each PSU award, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500 Index.
(11) Represents a PSU award granted under the LSI Plan based on the attainment of the maximum performance level, given that the level of performance through October 31, 2021 is tracking above target. The PSU award will vest at a rate of 25% per year on each anniversary of the grant date, subject to Ms. Spears’ continued employment through the applicable vesting date and subject to the achievement of specified performance goals over each performance period, as determined by the Compensation Committee within 60 days following the end of each performance period. The performance criteria is based on our Relative TSR over four performance periods beginning on March 2, 2020 and ending on each of March 1 of 2021, 2022, 2023 and 2024. The number of shares that may be earned is capped at one-quarter of the target number of shares for each of the first three performance periods. In the aggregate, Ms. Spears may earn up to 200% of the target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned for a performance period if our Relative TSR is below the 25th percentile of the S&P 500 Index.
(12) Represents service-based RSU awards granted under our 2012 Plan that vest at a rate of one-third per year on each anniversary of December 15, 2020, subject to the NEO’s continued employment through the applicable vesting dates.
(13) Represents PSU awards granted under our 2012 Plan based on attainment of the maximum performance level, given that the level of performance through October 31, 2021 is tracking above target. This PSU is earned based on our Relative TSR and absolute TSR measured over the period beginning on November 2, 2020 and ending on October 29, 2023, as determined by the Compensation Committee, subject to the NEO’s continued employment on the vesting date of October 29, 2023. In the aggregate, the NEO may earn up to 200% of the target number of shares if our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned if our Relative TSR is below the 25th percentile of the S&P 500 Index.
EXECUTIVE COMPENSATION
| (6) | Represents a RSU Multi-Year Award that will vest as to 25% on each anniversary of the applicable vesting start date, subject to the NEO’s continued employment through the relevant vesting date. The 2019 Multi-Year Equity Awards have staggered vesting start dates of March 15, 2019, 2020, 2021 and 2022. |
EXECUTIVE COMPENSATION | (7) | Represents a PSU Multi-Year Award based on attainment of the maximum performance level as performance through October 30, 2022 is tracking at above target. The PSU award will vest as to 25% of the target number of shares on each anniversary of March 15, 2019, subject to the NEO’s continued employment through the applicable vesting date and subject to the achievement of specified performance goals based on our Relative TSR over four performance periods beginning on March 2, 2019 and ending on each of March 1 of 2020, 2021, 2022 and 2023, as determined by the Compensation Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500 Index. Our Relative TSR for the first, second and third performance periods was at the 48th, 90th and 90th percentile, respectively, and, as a result, 23.9%, 25% and 25% of the PSU award was earned in Fiscal Years 2020, 2021 and 2022, respectively. |
| (8) | Represents a PSU Multi-Year Award based on attainment of the maximum performance level as performance through October 30, 2022 is tracking at above target. The PSU award will vest as to 25% of the target number of shares on each anniversary of March 15, 2020, subject to the NEO’s continued employment through the applicable vesting date and subject to the achievement of specified performance goals based on our Relative TSR over four performance periods beginning on March 2, 2020 and ending on each of March 1 of 2021, 2022, 2023 and 2024, as determined by the Compensation Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500 Index. Our Relative TSR for the first and second performance periods was at the 92nd and 93rd percentile, respectively, and, as a result, 25% of the PSU award was earned in each of Fiscal Years 2021 and 2022. |
| (9) | Represents a PSU Multi-Year Award based on attainment of the maximum performance level as performance through October 30, 2022 is tracking at above target. The PSU award will vest as to 25% of the target number of shares on each anniversary of March 15, 2021, subject to the NEO’s continued employment through the applicable vesting date and subject to the achievement of specified performance goals based on our Relative TSR over four performance periods beginning on March 2, 2021 and ending on each of March 1 of 2022, 2023, 2024 and 2025, as determined by the Compensation Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500 Index. Our Relative TSR for the first performance period was at the 69th percentile and, as a result, 25% of the PSU award was earned in Fiscal Year 2022. |
| (10) | Represents a PSU Multi-Year Award based on attainment of the target performance level as performance through October 30, 2022 is tracking at below target. The PSU award will vest as to 25% of the target number of shares on each anniversary of March 15, 2022, subject to the NEO’s continued employment through the applicable vesting date and subject to the achievement of specified performance goals based on our Relative TSR over four performance periods beginning on March 2, 2022 and ending on each of March 1 of 2023, 2024, 2025 and 2026, as determined by the Compensation Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is not at or above the 25th percentile of the S&P 500 Index. |
| (11) | Represents a RSU award granted under the LSI Plan that vests as to 25% on each anniversary of the grant date, subject to Ms. Spears’ continued employment through the applicable vesting date. |
| (12) | Represents a PSU award granted under the LSI Plan based on the attainment of the maximum performance level as performance through October 30, 2022 is tracking above target. The PSU award will vest as to 25% of the target number of shares on each anniversary of December 15, 2020, the grant date, subject to Ms. Spears’ continued employment through the applicable vesting date and subject to the achievement of specified performance goals based on our Relative TSR over four performance periods beginning on March 2, 2020 and ending on each of March 1 of 2021, 2022, 2023 and 2024, as determined by the Compensation Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, Ms. Spears may earn up to 200% of the target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is below the 25th percentile of the S&P 500 Index. Our Relative TSR for the first performance period was at the 92nd percentile and, as a result, 25% (3,250 shares) of the PSU award was earned in Fiscal Year 2021 and vested in Fiscal Year 2022. Our Relative TSR for the second performance period was at the 93rd percentile and, as a result, 25% (3,250 shares) of the PSU award was earned in Fiscal Year 2022 but remained unvested until December 15, 2022. |
| (13) | Represent shares earned under a PSU award (referenced in footnote (12)) in Fiscal Year 2022 but remain subject to time-based vesting. Subject to the NEO’s continued employment, the shares vest on December 15, 2022. |
| (14) | Represents the Brazeal Promotion RSUs granted under the 2012 Plan that vests as to 25% on each anniversary of the grant date, subject to Mr. Brazeal’s continued employment through the applicable vesting date. |
| (15) | Represents the Brazeal Promotion PSUs granted under the 2012 Plan based on the attainment of the maximum performance level as performance through October 30, 2022 is tracking above target. The Brazeal Promotion PSUs will vest as to 25% on each anniversary of December 15, 2021, the grant date, subject to Mr. Brazeal’s continued employment through the applicable vesting date and subject to the achievement of specified performance goals based on our Relative TSR over four performance periods beginning on March 2, 2021 and ending on each of March 1 of 2022, 2023, 2024 and 2025, as determined by the Compensation |
EXECUTIVE COMPENSATION | | Committee. The number of shares that may be earned is capped at 25% of the target number of shares for each of the first three performance periods. In the aggregate, Mr. Brazeal may earn up to 200% of the target number of shares, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative. No shares will be earned for a performance period if our Relative TSR is below the 25th percentile of the S&P 500 Index. Our Relative TSR for the first performance period was at the 69th percentile and, as a result, 25% (2,000 shares) of this award was earned in Fiscal Year 2022, but remained unvested until December 15, 2022. |
| (16) | Represent shares earned under the Brazeal Promotion PSUs (referenced in footnote (15)) in Fiscal Year 2022 but remain subject to time-based vesting. Subject to the NEO’s continued employment, the shares vest on December 15, 2022. |
| (17) | Represents a RSU award granted under our 2012 Plan that vest as to one-third on each anniversary of December 15, 2020, subject to Dr. Kawwas’ continued employment through the applicable vesting dates. |
| (18) | Represents a PSU award granted under our 2012 Plan based on attainment of the maximum performance level as performance through October 30, 2022 is tracking above target. This PSU award is earned based on our Relative TSR and absolute TSR measured over the period of November 2, 2020 through October 29, 2023, as determined by the Compensation Committee, subject to Dr. Kawwas’ continued employment on the vesting date of October 29, 2023. In the aggregate, Dr. Kawwas may earn up to 200% of the target number of shares if our Relative TSR is at or above the 75th percentile of the S&P 500 Index and our absolute TSR is not negative, provided that no shares will be earned if our Relative TSR is below the 25th percentile of the S&P 500 Index. |
Fiscal Year 20212022 Option Exercises and Stock Vested Table The following table sets forth information regarding the exercisevesting of stock options and the vesting of service-based RSU awards during Fiscal Year 20212022 for each of our NEOs. StockNo NEO held outstanding option award value realized is calculated by multiplyingawards at the numberend of stock options exercised by the aggregate sale price, less the aggregate exercise price of the exercised stock options. RSUFiscal Year 2022. Stock award value realized is calculated by multiplying the number of shares of common stock shown in the table by the closing market price of our shares of common stock, as reported on the Nasdaq Global Select Market, on the date the service-based RSUstock awards vested. Value Realized on Exercise and Value Realized on Vesting representrepresents long-term gain over multiple years of service by the NEO and are not considered as part of a NEO’s Fiscal Year 20212022 compensation. | | Name | Stock Awards | | | Number of Shares
Acquired on Vesting
(#) | Value Realized
on Vesting
($)(1) | | | Hock E. Tan | — | — | | | Kirsten M. Spears | 24,124 | 14,641,217 | | | Mark D. Brazeal | 21,750 | 12,927,855 | | | Charlie B. Kawwas, Ph.D. | 33,480 | 20,186,138 | | | Thomas H. Krause, Jr. | 34,230 | 20,630,708 |
| | | | | | | | | | | | | | | | | | | Option Awards | | | Stock Awards | | Name | Number of Shares
Acquired on Exercise
(#) | Value Realized
on Exercise
($) | | Number of Shares
Acquired on Vesting
(#) | Value Realized on Vesting ($)(1) | | Hock E. Tan | 312,500 | 109,260,734 | | 365,498 | 172,131,921 | | Kirsten M. Spears | — | — | | 21,500 | 10,042,490 | | Mark D. Brazeal | — | — | | 30,250 | 14,374,323 | | Charlie B. Kawwas, Ph.D. | — | — | | 35,000 | 16,345,175 | | Thomas H. Krause, Jr. | — | — | | 40,250 | 18,330,368 |
(1) These shares include shares vested under service-based RSU awards and PSU awards granted in Fiscal Year 2017, Fiscal Year 2018 and Fiscal Year 2019.
| (1) | These shares include shares vested under RSU and PSU awards granted in fiscal years 2018, 2019 and 2021. |
Severance and Change in Control Agreements with Named Executive Officers; Death and Permanent Disability Policies; Retirement Severance Benefit Agreements — General Terms In Fiscal Year 20212022 each of our NEOs was party to a severance benefits agreement with Broadcom (as may be amended or restated from time to time, a “severance benefit agreement”). In December 2020, we amendedMr. Krause’s severance benefits agreement terminated in July 2022 upon his resignation from Broadcom and restated theno payments were made pursuant to his severance benefit agreements with each of Messrs. Tan and Krause and Dr. Kawwas. benefits agreement.These severance benefits agreements provide each NEO with severance payments and other benefits in the event termination of employment is without cause, due to death or permanent disability or for “good reason,” as such terms are defined in the severance benefits agreements (a “Covered Termination”), provided that the NEO timely executes a general release of claims in Broadcom’s favor. EXECUTIVE COMPENSATION If a Covered Termination takes place within 12 months following (or in the case of Mr. Tan, within three months prior to or 12 months following) a “change in control” (as defined in the severance benefits agreement) of Broadcom, Broadcom must provide the NEO with: | Name | Continued
Base Salary | Bonus(1) | Health Benefits
Continuation Coverage | Equity Award
Vesting Acceleration(2) | | Hock E. Tan | 24 months | 200% | — | 100% | | Kirsten M. Spears | 12 months | 100% | 12 months | 100% | | Mark D. Brazeal | 12 months | 100% | 12 months | 100% | | Charlie B. Kawwas, Ph.D. | 12 months | 100% | 12 months | 100% |
| | | | | | | | | | | | | | | | Name | Continued
Base Salary | Bonus(1) | Health Benefits
Continuation Coverage | Equity Award Vesting Acceleration(2) | | Hock E. Tan | 24 months | 200% | — | 100% | | Kirsten M. Spears | 12 months | 100% | 12 months | 100% | | Mark D. Brazeal | 12 months | 100% | 12 months | 100% | | Charlie B. Kawwas, Ph.D. | 12 months | 100% | 12 months | 100% | | Thomas H. Krause, Jr. | 12 months | 100% | 12 months | 100% |
(1) Bonus payments are calculated using the lesser of the NEO’s prior year’s actual bonus or target bonus.
(2) | (1) | Bonus payments are calculated using the lesser of the NEO’s prior year’s actual bonus or target bonus. |
| (2) | The NEO will receive full acceleration of all outstanding service-based RSU awards and acceleration of outstanding PSU awards, after giving effect to any deemed satisfaction of performance goals in accordance with this footnote (2). |
For Mr. Tan, Dr. Kawwas and acceleration of outstanding PSU awards, after giving effect to any deemed satisfaction of performance goals in accordance with this footnote (2). Effective Fiscal Year 2021, for Messrs. Tan and Krause, Ms. Spears, and Dr. Kawwas, except as otherwise provided in an applicable award agreement, for PSU awards for which the performance period has not been completed, the performance goals will be deemed met at target levels. For Mr. Brazeal, the performance goals applicable to his PSU awards will be deemed satisfied up to 100% in the discretion of our Board, based on Broadcom’s performance through the date of the change in control. The severance benefit agreements for Messrs. Tan and Brazeal, Krause and Dr. Kawwas also contain alternative language that would apply to PSU awards that vest based on share price contingencies, but no such awards were outstanding as of October 31, 2021.
30, 2022.Under the terms of the FY 2022 TSR PSU Award and Brazeal Promotion PSUs, as well as the PSU awards granted to Mr. Tan, Dr. Kawwas and Ms. Spears in Fiscal Year 2021, PSU Award, the Kawwas/Krause Promotion PSUs and the Spears Promotion PSUs, the performance goals will be based on Broadcom’s performance through a date within 10 days prior to the change in control and the Achievement Factor will be calculated on a date before the change in control, as determined by the plan administrator of the 2012 Plan.
If a Covered Termination takes place other than in connection with a “change in control” (as defined in the severance benefits agreement) of Broadcom, Broadcom must provide the NEO with: | Name | | | | | | | | | | | | | | Name | Continued
Base Salary | Bonus(1)
| Bonus(1) | | Health Benefits
Continuation Coverage | | Cash Payments in
Exchange for Equity
Cancellation(2)(2) | | | Hock E. Tan | 12 months | | 100% | | — | | — | | | Kirsten M. Spears | 9 months | | 50% | | 6 months | | — | | | Mark D. Brazeal | 9 months | | 50% | | 6 months | | — | | | Charlie B. Kawwas, Ph.D.(2)(2) | 9 months | | 50% | | 6 months | | 18 months acceleration | |
Thomas H. Krause, Jr.(2)
| 9 months(1) | 50%Bonus payments are calculated using the lesser of the NEO’s prior year’s actual bonus or prior year’s target bonus. |
| 6 months(2) | If termination of employment without “cause” or for “good reason” occurs during the Continuation Period (as defined below), Dr. Kawwas will receive a lump sum cash amount shortly after his release of claims becomes effective and irrevocable equal to: (x) that number of shares that would have vested under his outstanding RSU and PSU awards had he remained continuously employed by Broadcom for an additional 18 months accelerationfollowing his termination, with the performance goals deemed met at target performance, multiplied by (y) the closing price of Broadcom common stock on the date his employment terminates (or, if there is no closing price on such date, then the closing price on the last preceding trading date). |
(1) Bonus payments are calculated using the lesser of the NEO’s prior year’s actual bonus or prior year’s target bonus.
(2) If termination of employment without “cause” or for “good reason” occurs during the Continuation Period (as defined below), the NEO will receive a lump sum cash amount shortly after their release of claims becomes effective and irrevocable equal to: (x) that number of shares that would have vested under the Kawwas/Krause Promotion RSUs and PSUs had the NEO remained continuously employed by Broadcom for an additional 18 months following his termination, with the performance goals deemed met at target performance, multiplied by (y) the closing price of Broadcom common stock on the date his employment terminates (or, if there is no closing price on such date, then the closing price on the last preceding trading date).
The definition of “good reason” generally means any of the following, subject to certain notice and cure period provisions: (A) a material reduction in the NEO’s salary (other than as part of a broad salary reduction program instituted because Broadcom is in financial distress); (B) a substantial reduction in the NEO’s duties and responsibilities; (C) the elimination or reduction of the NEO’s eligibility to participate in Broadcom’s benefit programs that is inconsistent with the eligibility of our executives to participate therein; (D) Broadcom informs the NEO of its intention to transfer the NEO’s primary workplace to a location that is more than 50 miles from the location of the NEO’s primary workplace as of such date; (E) Broadcom’s material breach of the severance benefits agreement that is not cured within 60 days written notice thereof; and (F) any serious chronic mental or physical illness of the NEO or a member of the NEO’s family that requires the NEO to terminate their employment because of substantial interference with the NEOs duties; provided, that at Broadcom’s request the NEO provides Broadcom with a written physician’s statement confirming the existence of such mental or physical illness. For each of Dr. Kawwas, and Mr. Krause, a termination during the period between and inclusive of December 10, 2020 and December 15, 2023 (such period, EXECUTIVE COMPENSATION the “Continuation Period”) for “good reason” also includes: (A) an adverse change or reduction in either (i) their position, title, reporting responsibilities or duties or (ii) compensation, or (B) being required to report to anyone other than our CEO or the Board. Acceleration of Equity Awards in the Event of Death or Permanent Disability Upon an executive’s death or permanent disability, Broadcom’s Death and Permanent Disability Policies updated in June 2021, provide for the full acceleration of vesting of the executive’s outstanding and unvested equity awards that have started vesting and would otherwise vest solely based on the executive’s continued service, including PSU awards for which the performance criteria have been met as of the date of such death or permanent disability. Under such circumstances, any PSU awards held by executives with performance periods that have started but not ended will have their performance goals deemed achieved at 100% of target levels, with all other terms and conditions deemed met. However, pursuant to the terms of the 2019 Multi-Year Equity Awards, holders are not entitled to full acceleration of vesting of these awards except with respect to those awards for which the vesting start date has already occurred at the time of the applicable executive’s death or disability. The Death Policy applies to all of our employees, directors and other service providers, including the NEOs, while the Permanent Disability Policy applies to (i) any officer of Broadcom, as such term is defined in Exchange Act Rule 16a-1 and (ii) any member of the CEO’s executive staff, including the NEOs, as determined by the CEO. The benefits provided under the Death and Permanent Disability Policies are intended to be additive to any benefits a NEO becomes entitled to under any other policy, program, plan or agreement (including severance benefit agreements), generally unless the Board, the Compensation Committee or the Policy Committee (as defined in the applicable policy) determines otherwise. AsUnder the FY 2022 TSR PSU Award and the PSU award granted to Mr. Tan has reached the age of 70,in Fiscal Year 2021 (the "FY 2021 PSU Award"), if heMr. Tan retires from Broadcom on or afterprior to the last day of Fiscal Year 2021,applicable vesting date (as noted in the table below), the performance period for the Tan Fiscal Year 2021each of these PSU Awardawards will end on the date of his retirement notice and vest on his retirement date, subject to achievement of the applicable performance goals. Such retirement notice must be provided at least 30 days prior to Mr. Tan’s retirement date fordate. The following table reflects the Tan Fiscal Year 2021 PSU Award to vest in accordance with this paragraph. Ifpotential payments Mr. Tan would be entitled to receive if he had provided a retirement notice on October 1, 2021September 29, 2022 and retired effective October 31, 2021, 98,227 shares | | PSU Award | Vesting
Date | | Shares
Accelerated(1)
(#) | Value of PSU
Acceleration(2)
($) | | | | FY 2021 PSU Award | 10/29/2023 | | 135,973 | 64,301,632 | | | | FY 2022 TSR PSU Award | 11/03/2024 | | 49,237 | 23,284,177 | |
| (1) | Number of shares for which the performance goals having been deemed satisfied based on Broadcom’s actual performance immediately prior to October 30, 2022. |
EXECUTIVE COMPENSATION | (2) | Based on a per share price of $472.90, the closing price per share of Broadcom common stock on October 28, 2022, the last trading day of Fiscal Year 2022. |
EXECUTIVE COMPENSATION Potential Payments and Benefits upon Certain Terminations of Employment in Connection with a Change in Control The following table reflects the potential payments and benefits to which our NEOs, except for Mr. Krause, would be entitled under their severance benefits agreements and equity award agreements in effect as of the end of Fiscal Year 20212022 in the event of a Covered Termination taking place within 12 months following a change in control of Broadcom (or in the case of Mr. Tan three months before or 12 months following a change in control of Broadcom). The amounts presented in the table assume an employment termination date and a change in control date of October 31, 202130, 2022 and that all eligibility requirements contemplated by the NEO’s respective agreements and our policies and practices, as applicable, were met. | | Name | | Cash Severance
Base Salary
($) | | Cash Severance
Bonus
($) | | Health Benefits
Continuation
Coverage
($)(1) | | Value of RSU/PSU
Acceleration
($) | | Total
($) | | | | Hock E. Tan | | 2,400,000 | | 4,800,000 | | — | | 87,585,809(2) | | 94,785,809 | | | | Kirsten M. Spears | | 412,000 | | 371,057 | | 24,449 | | 35,257,532(3) | | 36,065,038 | | | | Mark D. Brazeal | | 515,000 | | 500,000 | | 23,917 | | 31,414,274(3) | | 32,453,191 | | | | Charlie B. Kawwas, Ph.D. | | 721,000 | | 674,615 | | 24,449 | | 51,364,034(3) | | 52,784,098 | |
| | | | | | | | | | | | | | | | | | | Name | Cash Severance Base Salary
($) | Cash Severance Bonus
($) | Health Benefits Continuation Coverage
($)(1) | Value of RSU/PSU
Acceleration ($) | Total
($) | | Hock E. Tan | 2,400,000 | 4,800,000 | — | 51,712,351(2) | 58,912,351 | | Kirsten M. Spears | 400,000 | 166,482 | 23,800 | 36,872,910(3) | 37,463,192 | | Mark D. Brazeal | 500,000 | 500,000 | 23,285 | 30,053,178(3) | 31,076,464 | | Charlie B. Kawwas, Ph.D. | 700,000 | 500,000 | 23,800 | 61,338,768(3) | 62,562,568 | | Thomas H. Krause, Jr. | 700,000 | 500,000 | 23,449 | 61,737,520(3) | 62,960,969 |
(1) Represents the cost of our subsidized continued healthcare benefits based on our current costs to provide such coverage.
(2) This amount includes the number of shares subject to the Tan Fiscal Year 2021 PSU Award for which the performance goals have been deemed satisfied based on Broadcom’s actual performance immediately prior to October 31, 2021, multiplied by $531.67, the closing price per share of Broadcom common stock on October 29, 2021, the last trading day of Fiscal Year 2021.
(3) This amount includes the number of shares subject to (a) service-based RSU awards; and (b) PSU awards for which the performance goals have been deemed satisfied based on Broadcom’s actual performance immediately prior to October 31, 2021, in each case multiplied by $531.67, the closing price per share of Broadcom common stock on October 29, 2021.
| (1) | Represents the cost of our subsidized continued healthcare benefits based on our current costs to provide such coverage. |
| (2) | This amount includes the number of shares subject to the FY 2022 TSR PSU Award and the FY 2021 PSU Award for which the performance goals have been deemed satisfied based on Broadcom’s actual performance immediately prior to October 30, 2022, multiplied by $472.90, the closing price per share of Broadcom common stock on October 28, 2022, the last trading day of Fiscal Year 2022. |
| (3) | This amount includes the number of shares subject to (a) RSU awards and (b) PSU awards for which the performance goals have been deemed satisfied based on Broadcom’s actual performance immediately prior to October 30, 2022, in each case multiplied by $472.90, the closing price per share of Broadcom common stock on October 28, 2022. |
Potential Payments and Benefits upon Certain Terminations of Employment The following table reflects the potential payments and benefits to which our NEOs, except for Mr. Krause, would be entitled under their severance benefits agreements in effect as of the end of Fiscal Year 2021,2022, in the event of a Covered Termination taking place not in connection with a change in control of Broadcom. The amounts presented in the table assume an employment termination date of October 31, 202130, 2022 and that all eligibility requirements contemplated by the NEO’s respective agreements and our policies and practices, as applicable, were met. | | Name | Cash Severance
Base Salary
($) | | Cash Severance
Bonus
($) | | Health Benefits
Continuation
Coverage
($)(1) | | Cash Payments in
Exchange for
Equity Cancellation
($)(2) | | Total
($) | | | | Hock E. Tan | 1,200,000 | | 2,400,000 | | — | | — | | 3,600,000 | | | | Kirsten M. Spears | 309,000 | | 185,529 | | 12,224 | | — | | 506,753 | | | | Mark D. Brazeal | 386,250 | | 250,000 | | 11,959 | | — | | 648,209 | | | | Charlie B. Kawwas, Ph.D. | 540,750 | | 337,308 | | 12,224 | | 30,691,210 | | 31,581,492 | |
| | | | | | | | | | | | | | | | | | | Name | Cash Severance
Base Salary
($) | Cash Severance Bonus
($) | Health Benefits Continuation Coverage
($)(1) | Cash Payments in Exchange for Equity Cancellation ($)(2) | Total
($) | | Hock E. Tan | 1,200,000 | 2,400,000 | — | — | 3,600,000 | | Kirsten M. Spears | 300,000 | 83,241 | 11,900 | — | 395,141 | | Mark D. Brazeal | 375,000 | 250,000 | 11,643 | — | 636,643 | | Charlie B. Kawwas, Ph.D. | 525,000 | 250,000 | 11,900 | 27,625,573 | 28,412,473 | | Thomas H. Krause, Jr. | 525,000 | 250,000 | 11,724 | 27,758,491 | 28,545,215 |
(1) Represents the cost of the subsidized continued healthcare benefits based on the current costs to provide such coverage.
(2) This amount includes the number of shares that would have vested under the Kawwas/Krause Promotion RSUs and PSUs had the NEO remained continuously employed by Broadcom for an additional 18 months following his termination on October 31, 2021, with any applicable performance conditions deemed to have been achieved at target performance, multiplied by $531.67, the closing price per share of Broadcom common stock on October 29, 2021.
| (1) | Represents the cost of the subsidized continued healthcare benefits based on the current costs to provide such coverage. |
EXECUTIVE COMPENSATION | (2) | This amount includes the number of shares that would have vested under outstanding RSU and PSU awards had Dr. Kawwas remained continuously employed by Broadcom for an additional 18 months following October 30, 2022, with any applicable performance conditions deemed to have been achieved at target performance, multiplied by $472.90, the closing price per share of Broadcom common stock on October 28, 2022. |
EXECUTIVE COMPENSATION Potential Payments under our Death and Permanent Disability Policies The following table reflects the additional potential payments and benefits to which our NEOs, except for Mr. Krause, would be entitled under the Death and Permanent Disability Policies in effect as of October 31, 2021,30, 2022, in the event of death or permanent disability. The amounts presented in the table assume a termination of employment date of October 31, 202130, 2022 and that all eligibility requirements contemplated by the Death and Permanent Disability Policies were met. | Name | | | | | Name | Value of RSU/PSU
Acceleration
($)(1) | | | Hock E. Tan | 31,793,86651,563,597 | | | Kirsten M. Spears | 30,503,50323,998,256 | | | Mark D. Brazeal | 20,070,54325,300,150 | | | Charlie B. Kawwas, Ph.D. | 45,659,82037,784,710 | |
Thomas H. Krause, Jr. | 45,792,737(1) | The amounts represent the number of shares issued upon full acceleration of each RSU award that has begun vesting and each PSU award for which the performance period has begun with the performance goals deemed achieved at target performance levels, multiplied by $472.90, the closing price per share of Broadcom common stock on October 28, 2022. |
CEO PAY RATIO In accordance with SEC rules, Broadcom is providing the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all our employees (the “Ratio”). For Fiscal Year 2021,2022, the annual total compensation of our CEO, as reported in the “ Fiscal Year 20212022 Summary Compensation Table,” is $60,703,627$60,606,971 and the median of the annual total compensation of all our employees is $247,541.$179,156. The Ratio is 245338 to 1.In determining the annual total compensation of the median employee, we calculated such employee’s compensation in accordance with SEC executive compensation disclosure rules. This calculation is the same calculation used to determine the total compensation for purposes of the “ Fiscal Year 20212022 Summary Compensation Table” with respect to each of our NEOs.In Fiscal Year 2021, Mr. Tan was granted a PSU award to continue to align Mr. Tan’s interests with the interests of our stockholders and to encourage his retention. As of October 31, 2021, Mr. Tan had no other unvested and outstanding equity awards. Our median compensated employee was granted 2019 Multi-Year Equity Awards, which will vest on the same basis as four annual equity grants made on March 15 of each year, beginning in 2019.
In order to better compare Mr. Tan’s annual total compensation to our median compensated employee, we are providing a supplemental pay ratio that includes (1) in the CEO’s 2021 annual total compensation, the intended $25 million target value of Mr. Tan’s Fiscal Year 2021 PSU award, taking the target number of shares multiplied by the closing stock price on the effective date of December 15, 2020 (in lieu of the grant date fair value reflected in the “Fiscal Year 2021 Summary Compensation Table”), and (2) in the median employee’s 2021 annual total compensation the grant date fair value of the 2019 Multi-Year Equity Award with a vesting start date of March 15, 2021 and excluding the grant date fair value of the 2019 Multi-Year Equity Awards with vesting start dates in 2019, 2020 and 2022. This results in notional, total compensation for Fiscal Year 2021 of $31,646,807 for our CEO and $283,449 for our median employee. The supplemental ratio using this amount is 112 to 1.
As permitted by SEC rules, for purposes of calculating the pay ratio set forth above, we used the same median employee that we identified for purposes of our pay ratio disclosure last year,in Fiscal Year 2020, based on our determination that there was no change in our employee population or employee compensation arrangements that we believe would significantly impact the pay ratio. Our median employee also remained in the same role in Fiscal Year 2020, Fiscal Year 2021 and Fiscal Year 2021. 2022.To identify the median employee, we used the following methodology in Fiscal Year 2020: • We collected compensation data from our human resources system of record for all employees globally, whether employed on a full-time, part-time, temporary or seasonal basis, as of November 1, 2020, which was the last day of Fiscal Year 2020. Last year, our measuring date was also the last day of our fiscal year.
• We annualized the compensation of all permanent full-time and part-time employees who we hired between November 4, 2019 and November 1, 2020. We applied an exchange rate used in our human resources system of record as of November 1, 2020 to convert all international currencies into U.S. dollars.
• We used target total direct compensation as of November 1, 2020, as our consistently applied compensation measure. In this context, target total direct compensation meant (1) the applicable annual base salary level in effect as of November 1, 2020, (2) the annual incentive cash target amount or commission target amount payable for service in Fiscal Year 2020, and (3) the approved value of the annual equity awards granted during Fiscal Year 2020.
| • | We collected compensation data from our human resources system of record for all employees globally, whether employed on a full-time, part-time, temporary or seasonal basis, as of November 1, 2020, which was the last day of Fiscal Year 2020. Last year, our measuring date was also the last day of our fiscal year. | | • | We annualized the compensation of all permanent full-time and part-time employees who we hired between November 4, 2019 and November 1, 2020. We applied an exchange rate used in our human resources system of record as of November 1, 2020 to convert all international currencies into U.S. dollars. | | • | We used target total direct compensation as of November 1, 2020, as our consistently applied compensation measure. In this context, target total direct compensation meant (1) the applicable annual base salary level in effect as of November 1, 2020, (2) the annual incentive cash target amount or commission target amount payable for service in Fiscal Year 2020, and (3) the approved value of the annual equity awards granted during Fiscal Year 2020. |
The Ratio presented above is a reasonable estimate calculated in a manner consistent with SEC rules based on our human resources system of record. Because the SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, exemptions, estimates and assumptions, this pay ratio disclosure may not be comparable to the pay ratio reported by other companies.
| Broadcom Inc. | | | EQUITY COMPENSATION PLAN INFORMATION67 |
EQUITY COMPENSATION PLAN INFORMATION EQUITY COMPENSATION PLAN INFORMATION Plans Approved by our Stockholders Broadcom has three equity compensation plans that have been approved by our stockholders: the Avago Plan, the 2012 Plan and the ESPP. The Avago Plan expired in July 2019 and no new grants may be made under the Avago Plan following such date. Neither the 2012 Plan nor the ESPP have an expiration date. Plans Not Approved by our Stockholders Broadcom assumed outstanding equity awards granted under the LSI Plan, the 2012 Plan, the Brocade 2009 Stock Plan, the Brocade Amended and Restated Inducement Award Plan, the CA, Inc. 2011 Incentive Plan and under other equity compensation plans or agreements that were assumed by Broadcom in connection with our acquisitions of LSI, Broadcom Corporation, Brocade Communications Systems, and CA, and other companies that originally granted those awards. The following table sets forth as of October 31, 202130, 2022 the number and weighted-average exercise price of shares of common stock to be issued upon the exercise of outstanding stock options, service-based RSU awards and PSU awards, and the number of securities remaining available for future issuance under all of our equity compensation plans. | Plan Category | | Number of Shares of
Common Stock to be Issued
Upon Exercise of
Outstanding Options,
Warrants and Rights
(a) | | Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights ($)
(b)(1) | | Number of Shares of Common
Stock Remaining Available for
Future Issuance Under Equity
Compensation Plans (Excluding
Securities Reflected in
Column (a))
(c) | | Equity Compensation plans approved by stockholders | | | 17,498,825 | (2) | | | $203.16 | | | | 21,144,140 | (3) | | Employee stock purchase plans approved by stockholders | | | | | | | | | | | 5,941,901 | | | Equity compensation plans not approved by stockholders | | | 56,273 | (4) | | | $52.84 | | | | — | | | Total | | | 17,555,098 | | | | $151.16 | | | | 27,086,041 | |
| | | | | | | | | | | | | Plan Category | Number of Shares of Common Stock to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
(a) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($)
(b)(1) | Number of Shares of Common Stock Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
(c) | Equity Compensation plans approved by stockholders | 23,214,989(2) | $ 99.67 | 21,055,110(3) | Employee stock purchase plans approved by stockholders | | | 6,201,900 | Equity compensation plans not approved by stockholders | 152,415(4) | $ 81.40 | — | | Total | 23,367,404 | $ 82.49 | 27,257,010 |
(1) Shares of common stock issuable upon vesting of service-based RSU awards and PSU awards have been excluded from the calculation of the weighted average exercise price because they have no exercise price associated with them.
(2) Represents (i) 508 shares of common stock subject to outstanding stock options and 5,791,160 shares of common stock that may be issued upon vesting of outstanding service-based RSU awards and PSU awards (assuming the maximum performance level for PSUs), in each case pursuant to equity awards issued under the Avago Plan and (ii) 17,423,321 shares of common stock that may be issued upon the vesting of outstanding RSU awards and PSU awards (assuming the maximum performance level), all of which were awarded under the 2012 Plan.
(3) Shares of common stock available for issuance under the 2012 Plan.
(4) Represents (i) 7,851 shares of common stock subject to outstanding stock options and 144,354 shares of common stock that may be issued upon the vesting of outstanding service-based RSU awards and PSU awards (assuming the maximum performance level), all of which were awarded under the LSI Plan and (ii) and 210 shares of common stock subject to outstanding stock options granted pursuant to other equity compensation plans and agreements assumed by Broadcom in connection with our acquisition of other companies that originally established those plans or agreements.
| (1) | Shares issuable upon vesting of RSU and PSU awards have been excluded from the calculation of the weighted average exercise price because they have no exercise price associated with them. | | (2) | Represents (i) 3,832,260 shares that may be issued upon vesting of outstanding RSU awards and PSU awards (assuming the maximum performance level) granted under the Avago Plan, and (ii) 4,375 shares subject to outstanding stock options and 13,662,190 shares that may be issued upon the vesting of outstanding RSU awards and PSU awards (assuming the maximum performance level) granted under the 2012 Plan. | | (3) | Shares available for issuance under the 2012 Plan. | | (4) | Represents (i) 2,206 shares subject to outstanding stock options and 53,959 shares that may be issued upon the vesting of outstanding RSU awards and PSU awards (assuming the maximum performance level) granted under the LSI Plan and (ii) and 108 shares subject to outstanding stock options granted under other equity compensation plans and agreements assumed by Broadcom in connection with our acquisition of other companies that originally established those plans or agreements. |
For additional information regarding our equity compensation plans, please refer to Note 11 of Notes to Consolidated Financial Statements included in Part II, Item 8 of our 20212022 Annual Report. 54 2022| 68 | 2023 Proxy Statement
STOCKHOLDER INFORMATION STOCKHOLDER INFORMATION Security Ownership of Certain Beneficial Owners, Directors and Executive Officers The following table sets forth information about the beneficial ownership of Broadcom common stock as of
February 7, 20226, 2023 for: • each named executive officer;
• each of our directors and nominees for director; and
• all of our executive officers and directors as a group.
| • | each of our directors and nominees for director; | | • | each named executive officer; and | | • | all of our current directors and executive officers as a group. |
We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and dispositive power with respect to all common stock that they beneficially own. Common stock subject to service-based RSUsRSU awards that vest within 60 days of February 7, 20226, 2023 are deemed to be outstanding and to be beneficially owned by the person holding the equity award for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. In the table below, percentage ownership is based on 409,612,742416,923,664 shares of common stock outstanding as of February 7, 2022. | | | Shares Beneficially Owned(1) | | Name and Address of Beneficial Owners | | Number of Shares
Common Stock | Percentage of
Common Stock | | Five Percent Stockholders: | | | | | | The Vanguard Group(2) 100 Vanguard Blvd.
Malvern, PA 19355 | | 39,039,754 | | 9.4% | | Capital International Investors(3) 333 South Hope Street, 55th
Floor Los Angeles, CA 90071 | | 30,990,765 | | 7.4% | | Capital World Investors(4) 333 South Hope Street, 55th Floor
Los Angeles, CA 90071 | | 29,452,712 | | 7.1% | | BlackRock, Inc.(5) 55 East 52nd Street
New York, NY 10055 | | 29,344,162 | | 7.0% | | Capital Research Global Investors(6) 333 South Hope Street, 55th Floor
Los Angeles, CA 90071 | | 21,796,953 | | 5.2% | | | Directors and Executive Officers: | | | | | | | Diane M. Bryant(7) | | 1,592 | | * | | | Gayla J. Delly(8) | | 3,264 | | * | | | Raul J. Fernandez(9) | | 1,953 | | * | | | Eddy W. Hartenstein(10) | | 13,798 | | * | | | Check Kian Low(11) | | 4,583 | | * | | | Justine F. Page(12) | | 2,981 | | * | | | Henry Samueli, Ph.D.(13) | | 8,930,534 | | 2.1% | | | Hock E. Tan | | 244,514 | | * | | | Harry L. You(14) | | 2,113 | | * | | | Mark D. Brazeal(15) | | 9,516 | | * | | | Charlie B. Kawwas, Ph.D.(16) | | 50,711 | | * | | | Kirsten M. Spears(17) | | 15,472 | | * | | | Thomas H. Krause, Jr.(18) | | — | | — | | | All 12 current directors and executive officers as a group(19) | | 9,281,031 | | 2.2% | |
| | | | | | | | | | Shares Beneficially Owned(1) | | Name and Address of Beneficial Owners | Number of Shares Common Stock | Percentage of Common Stock | 5% Stockholders: | | | Capital World Investors(2) | 40,657,396 | 9.9% | | 333 South Hope Street, 55th Floor | | | | Los Angeles, CA 90071 | | | The Vanguard Group(3) | 36,465,158 | 8.9% | | 100 Vanguard Blvd. | | | | Malvern, PA 19355 | | | Capital International Investors(4) | 34,191,158 | 8.3% | | 333 South Hope Street, 55th Floor | | | | Los Angeles, CA 90071 | | | BlackRock, Inc.(5) | 28,430,931 | 6.9% | 55 East 52nd Street | | | | New York, NY 10055 | | | Capital Research Global Investors(6) | 23,299,331 | 5.7% | | 333 South Hope Street, 55th Floor | | | | Los Angeles, CA 90071 | | | Named Executive Officers, Directors and Nominees: | | | | Hock E. Tan | 286,677 | * | Kirsten M. Spears(7) | 8,087 | * | Mark D. Brazeal(8) | 7,628 | * | Charlie B. Kawwas, Ph.D.(9) | 36,057 | * | Thomas H. Krause, Jr.(10) | 9,500 | * | Diane M. Bryant(11) | 2,455 | * | Gayla J. Delly(12) | 3,251 | * | Raul J. Fernandez(13) | 2,542 | * | Eddy W. Hartenstein(14) | 13,385 | * | Check Kian Low(15) | 4,188 | * | Justine F. Page(16) | 2,738 | * | Henry Samueli, Ph.D.(17) | 9,036,720 | 2.2% | Harry L. You(18) | 1,700 | * | All 13 current executive officers and directors as a group(19) | 9,414,928 | 2.3% |
* Represents beneficial ownership of less than 1%.
| * | Represents beneficial ownership of less than 1%. |
| Broadcom Inc. | | | STOCKHOLDER INFORMATION69 |
(2) Number of shares of common stock is based solely on information reported by Capital World Investors on the Schedule 13G/A filed with the SEC on February 11, 2022, reporting ownership as of December 31, 2021. According to such Schedule 13G/A, Capital World Investors has sole dispositive power over these shares and sole voting power over 40,595,744 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 7, 2022.
(3) Number of shares of common stock is based solely on information reported by The Vanguard Group on the Schedule 13G/A filed with the SEC on February 9, 2022, reporting ownership as of December 31, 2021. According to such Schedule 13G/A. The Vanguard Group has sole dispositive power over 34,739,519 of these shares, shared dispositive power over 1,725,639 of these shares and shared voting power over 693,085 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 7, 2022.
(4) Number of shares of common stock is based solely on information reported by Capital International Investors on the Schedule 13G/A filed with the SEC on February 11, 2022, reporting ownership as of December 31, 2021. According to such Schedule 13G/A, Capital International Investors has sole dispositive power over these shares and sole voting power over 34,044,659 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 7, 2022.
(5) Number of shares of common stock is based solely on information reported by BlackRock, Inc. on the Schedule 13G/A filed with the SEC on February 8, 2022, reporting ownership as of December 31, 2021. According to such Schedule 13G/A, BlackRock, Inc. has sole dispositive power over these shares and sole voting power over 25,213,931 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 7, 2022.
(6) Number of shares of common stock is based solely on information reported by Capital Research Global Investors on the Schedule 13G/A filed with the SEC on February 11, 2022, reporting ownership as of December 31, 2021. According to such Schedule 13G/A, Capital Research Global Investors has sole dispositive power over these shares and sole voting power over 23,292,722 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 7, 2022.
(7) Shares shown in the table above include 5,938 shares that Ms. Spears has the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs. These shares do not include any shares that may be earned pursuant to PSUs for the performance periods ending March 1, 2022.
(8) Shares shown in the table above include 7,250 shares that Mr. Brazeal has the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs. These shares do not include any shares that may be earned pursuant to PSUs for the performance periods ending March 1, 2022.
(9) Shares shown in the table above include 280 shares held by Dr. Kawwas’ spouse, 220 aggregate shares held by his children, and 9,375 shares that Dr. Kawwas has the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs. These shares do not include any shares that may be earned pursuant to PSUs for the performance periods ending March 1, 2022.
(10) Shares shown in the table above consist of shares that Mr. Krause has the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs. These shares do not include any shares that may be earned pursuant to PSUs for the performance periods ending March 1, 2022.
(11) Shares shown in the table above include 32 shares held by The Diane M. Bryant Trust u/a/d 11/08/17 and 476 shares that Ms. Bryant has the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs.
(12) Shares shown in the table above include 476 shares that Ms. Delly has the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs.
(13) Shares shown in the table above include 476 shares that Mr. Fernandez has the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs.
(14) Shares shown in the table above include 12,909 shares held by The Hartenstein Family Trust and 476 shares that Mr. Hartenstein has the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs.
(15) Shares shown in the table above include 476 shares that Mr. Low has the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs.
(16) Shares shown in the table above include 476 shares that Ms. Page has the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs.
(17) The shares in the table include 500 shares that Dr. Samueli has the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs, but does not include any shares that may be earned pursuant to PSUs for the performance periods ending March 1, 2022. Shares in the table also include (i) 4,189,608 shares held by D95GT LLC, (ii) 1,227,203 shares held by E95GT LLC, (iii) 459,690 shares held by H&S Portfolio II L.P., and (iv) 2,893,512 shares held by H&S Investments I L.P. Dr. Samueli disclaims beneficial ownership of the shares held by H&S Portfolio II, L.P and H&S Investments I, L.P. (collectively, the “H&S Partnerships”) and D95GT LLC and E95GT LLC, except to the extent of his pecuniary interest therein. H&S Ventures LLC is the general partner of the H&S Partnerships and Dr. Samueli has an ownership interest in H&S Ventures LLC. Dr. Samueli has sole dispositive and voting power over the shares held by the H&S Partnerships, D95FT LLC and E95GT LLC.
(18) Shares shown in the table above include 476 shares that Mr. You has the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs.
(19) Shares shown in the table above include 35,895 shares that directors and executive officers have the right to acquire within 60 days after February 7, 2022 upon the vesting of service-based RSUs. These shares do not include any shares that may be earned by our executive officers pursuant to their respective PSUs for the performance periods ending March 1, 2022.
STOCKHOLDER INFORMATION | (1) | Amounts shown in the table above include securities held in the beneficial owner’s name or jointly with others, or in the name of a bank, nominee or trustee for the beneficial owner’s account. | | (2) | Number of shares of common stock is based solely on information reported by The Vanguard Group on the Schedule 13G/A filed with the SEC on February 9, 2023, reporting ownership as of December 31, 2022. According to such Schedule 13G/A. The Vanguard Group has sole dispositive power over 37,297,132 of these shares, shared dispositive power over 1,742,622 of these shares and shared voting power over 599,373 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 6, 2023. | | (3) | Number of shares of common stock is based solely on information reported by Capital International Investors on the Schedule 13G/A filed with the SEC on February 13, 2023, reporting ownership as of December 31, 2022. According to such Schedule 13G/A, Capital International Investors has sole dispositive power over these shares and sole voting power over 30,852,480 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 6, 2023. | | (4) | Number of shares of common stock is based solely on information reported by Capital World Investors on the Schedule 13G/A filed with the SEC on February 13, 2023, reporting ownership as of December 31, 2022. According to such Schedule 13G/A, Capital World Investors has sole dispositive power over these shares and sole voting power over 29,391,789 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 6, 2023. | | (5) | Number of shares of common stock is based solely on information reported by BlackRock, Inc. on the Schedule 13G/A filed with the SEC on February 2, 2023, reporting ownership as of December 31, 2022. According to such Schedule 13G/A, BlackRock, Inc. has sole dispositive power over these shares and sole voting power over 26,653,280 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 6, 2023. | | (6) | Number of shares of common stock is based solely on information reported by Capital Research Global Investors on the Schedule 13G/A filed with the SEC on February 13, 2023, reporting ownership as of December 31, 2022. According to such Schedule 13G/A, Capital Research Global Investors has sole dispositive power over these shares and sole voting power over 21,789,179 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 6, 2023. | | (7) | Shares shown in the table above include 32 shares held by The Diane M. Bryant Trust u/a/d 11/08/17 and 413 shares that Ms. Bryant has the right to acquire within 60 days after February 6, 2023 upon the vesting of RSU awards. | | (8) | Shares shown in the table above include 413 shares that Ms. Delly has the right to acquire within 60 days after February 6, 2023 upon the vesting of RSU awards. | | (9) | Shares shown in the table above include 413 shares that Mr. Fernandez has the right to acquire within 60 days after February 6, 2023 upon the vesting of RSU awards. | | (10) | Shares shown in the table above include 12,909 shares held by The Hartenstein Family Trust and 413 shares that Mr. Hartenstein has the right to acquire within 60 days after February 6, 2023 upon the vesting of RSU awards. | | (11) | Shares shown in the table above include 413 shares that Mr. Low has the right to acquire within 60 days after February 6, 2023 upon the vesting of RSU awards. | | (12) | Shares shown in the table above include 413 shares that Ms. Page has the right to acquire within 60 days after February 6, 2023 upon the vesting of RSU awards. | | (13) | The shares in the table include (i) 4,080,922 shares held by D95GT LLC, (ii) 1,227,203 shares held by E95GT LLC, (iii) 459,690 shares held by H&S Portfolio II L.P., and (iv) 3,162,719 shares held by H&S Investments I L.P. Dr. Samueli disclaims beneficial ownership of the shares held by H&S Portfolio II, L.P and H&S Investments I, L.P. (collectively, the “H&S Partnerships”) and D95GT LLC and E95GT LLC, except to the extent of his pecuniary interest therein. H&S Ventures LLC is the general partner of the H&S Partnerships and Dr. Samueli has an ownership interest in H&S Ventures LLC. Dr. Samueli has sole dispositive and voting power over the shares held by the H&S Partnerships, D95FT LLC and E95GT LLC. | | (14) | Shares shown in the table above include 413 shares that Mr. You has the right to acquire within 60 days after February 6, 2023 upon the vesting of RSU awards. | | (15) | Shares shown in the table above include 7,500 shares that Mr. Brazeal has the right to acquire within 60 days after February 6, 2023 upon the vesting of RSU awards. These shares do not include any shares that may be earned pursuant to PSUs for the performance periods ending March 1, 2023. | | (16) | Shares shown in the table above include 280 shares held by Dr. Kawwas’ spouse, 220 aggregate shares held by his children, and 10,000 shares that Dr. Kawwas has the right to acquire within 60 days after February 6, 2023 upon the vesting of RSU awards. These shares do not include any shares that may be earned pursuant to PSUs for the performance periods ending March 1, 2023. | | (17) | Shares shown in the table above include 6,250 shares that Ms. Spears has the right to acquire within 60 days after February 6, 2023 upon the vesting of RSU awards. These shares do not include any shares that may be earned pursuant to PSUs for the performance periods ending March 1, 2023. | | (18) | Mr. Krause resigned from Broadcom on July 15, 2022. Based on the Form 4 filed by Mr. Krause on March 17, 2022. | | (19) | Shares shown in the table above include 26,641 shares that directors and executive officers have the right to acquire within 60 days after February 6, 2023 upon the vesting of RSU awards. These shares do not include any shares that may be earned by our executive officers pursuant to their respective PSUs for the performance periods ending March 1, 2023. |
| 70 | | | RELATED PARTY TRANSACTIONS2023 Proxy Statement |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS Procedures for Approval of Related Party Transactions As provided by the Audit Committee Charter, the Audit Committee must review all related party transactions on an ongoing basis and all such transactions must be approved by the Audit Committee. The Audit Committee may delegate to one or more designated members of the committee the authority to pre-approve related party transactions, provided such approvals are presented to the Audit Committee at its next scheduled meeting. In approving or rejecting the proposed related party transaction, the Audit Committee considers the relevant facts and circumstances available and deemed relevant to the Audit Committee, including, but not limited to the extent of the related person’s interests, the risks, costs and benefits to us, the terms of the transaction, the availability of other sources for comparable services or products, and, if applicable, the impact on a director’s independence. Our Code of Ethics also requires that our directors, officers and employees make appropriate disclosure of potential conflicts of interest to and receive approval from (i) the NESG Committee or the Audit Committee, in the case of directors and officers, or (ii) our compliance officer, in the case of employees. Our Board has authority to approve related party transactions in lieu of the Audit Committee. Transactions with Related Party
Other Relationships From time to time in the ordinary course of business, on an arms’ length basis, Broadcom purchases from and/or sells to certain entities where one of our directors or management may have relationships as directors or executive officers. For transactionsDuring Fiscal Year 2022, on an arm’s length basis, Broadcom entered into during Fiscal Year 2021, no related person had or willan advertising and publicity sponsorship agreement with Monumental Sports & Entertainment, a private partnership in which Mr. Fernandez holds a minority interest and serves as Vice Chairman. Mr. Fernandez did not have a direct or indirect material interest.
interest in this transaction.
| Broadcom Inc. | | | ADDITIONAL MEETING INFORMATION71 |
ADDITIONAL MEETING INFORMATION ADDITIONAL MEETING INFORMATION | | | | | | | | | | | | When: | April 4, 20223, 2023 | Time: | 11:4:00 a.m.p.m. Pacific Time | Where: | 1320 Ridder Park Drive
San Jose, California 95131 | Record Date: | February 7, 20226, 2023 |
This Proxy Statement is made available in connection with the solicitation by our Board of proxies to be voted at the Annual Meeting, or at any adjournments or postponements thereof. The Internet Notice, this Proxy Statement, the accompanying proxy card and our 20212022 Annual Report were first made available to our stockholders on or about February 18, 2022. 17, 2023.Electronic Delivery of Our Stockholder Communications We are furnishing the proxy materials, including this Proxy Statement and the 20212022 Annual Report, to our stockholders by providing access to such documents onvia the Internet Notice instead of mailing printed copies. The Internet Notice provides instructions as to how you may access and review all of the proxy materials on the Internet. The Internet Notice also instructs you as to how you may submit your proxy over the Internet or by telephone. If you would like to receive a paper copy of ourthe proxy materials, you should follow the instructions for requesting such materials in the Internet Notice. Any request to receive proxy materials by mail will remain in effect until you revoke it. Meeting Attendance and Admission You are invited to attend the Annual Meeting if you were a registered stockholder or a beneficial owner of Broadcom common stock on the Record Date. All stockholders must bring proof of identification. We may also impose additional screening measures for the health and safety of all participants. If you are a registered stockholder, your name will be verified against the list of registered stockholders prior to admittance to the Annual Meeting. If you hold your shares through a broker, bank or other nominee, you will need to provide proof of ownership on the Record Date. This can be any of the following: • the Internet Notice;
• a proxy card;
• a voting instruction card;
• a brokerage statement or letter from a broker, bank or other nominee indicating ownership as of the Record Date; or
• a legal proxy provided by your broker, bank or other nominee.
We are monitoring public health and travel safety concerns relating to COVID-19. If we determine that a change in the date, time or location of the Annual Meeting or a change to a virtual meeting format is advisable or required, we will announce such changes through a press release and additional proxy materials filed with the SEC and on our Investor Center page at http://investors.broadcom.com. Please check this website in advance of the meeting date if you are planning to attend in person, and we encourage you to vote your shares prior to the Annual Meeting.
| • | the Internet Notice; | | • | a proxy card; | | • | a voting instruction card; | | • | a brokerage statement or letter from a broker, bank or other nominee indicating ownership as of the Record Date; or | | • | a legal proxy provided by your broker, bank or other nominee. |
Quorum Representation at the Annual Meeting of stockholders entitled to vote, in person or by proxy or representative and holding among them at least a majority of all issued and outstanding shares of common stock is required to constitute a quorum. Abstentions and “broker non-votes” are counted in determining whether a quorum is present at the Annual Meeting.
| | | ADDITIONAL MEETING INFORMATION |
Only holders of Broadcom common stock as of the close of business on the Record Date are entitled to vote at the Annual Meeting. Each share of Broadcom common stock has one vote for each matter. As of the Record Date, Broadcom had 409,612,742416,923,664 shares of common stock issued and outstanding. If your shares of common stock are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are a registered stockholder with respect to those shares. ADDITIONAL MEETING INFORMATION If your shares of common stock are held by a broker, bank or other nominee, you are the “beneficial owner” of shares held in “street name.” As a beneficial owner, you have the right to instruct the broker, bank or other nominee that holds your shares on how to vote them. Board Recommendations, Required Vote and Effects of Abstentions and Broker Non-Votes The following chart describes the proposals to be considered at the Annual Meeting, our Board’s recommendations, the vote required for each of the proposals, and the manner in which votes will be counted. If you are a beneficial owner and do not provide specific voting instructions to your broker, bank or other nominee, the organization that holds your shares will not be authorized to vote your shares, which would result in “broker non-votes,” on proposals other than the ratification of the appointment of PwC as our independent auditors. Accordingly, we encourage you to vote promptly, even if you plan to attend the Annual Meeting. | Proposal | | Voting
Options | | Board
Recommendation | | Vote Required | | Effect of
Abstentions | | Effect of
Broker
Non-Votes | | To elect each of the nine director nominees named until the next annual meeting of stockholders or until their successors have been elected | | For Against
Abstain | | For
each nominee | | Affirmative vote of a majority of votes cast | | None | | None | | To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Broadcom for the fiscal year ending October 29, 2023 | | For Against
Abstain | | For | | Affirmative vote of a majority of votes represented at the Annual Meeting and entitled to vote | | Against | | Broker has discretion to vote | | To approve an amendment and restatement of the 2012 Stock Incentive Plan | | For Against
Abstain | | For | | Affirmative vote of a majority of votes represented at the Annual Meeting and entitled to vote | | Against | | None | | To hold an advisory vote to approve the named executive officer compensation | | For Against
Abstain | | For | | Affirmative vote of a majority of votes represented at the Annual Meeting and entitled to vote | | Against | | None | | To hold an advisory vote on the frequency of the advisory vote on named executive officer compensation | | 1 Year
2 Year
3 Year Abstain | | 1 Year | | Affirmative vote of a majority of votes represented at the Annual Meeting and entitled to vote | | Against | | None |
Voting Procedures We recommend that stockholders vote by proxy even if they plan to attend the Annual Meeting. You may vote over the Internet, by telephone, by mail or in person. | • | Internet: Vote your shares at www.proxyvote.com. | | • | Telephone: Call (800) 690-6903. | | • | Mail: Complete, sign and date your proxy card and return it in the postage-paid envelope. You cannot vote by marking the Internet Notice and returning it. |
ADDITIONAL MEETING INFORMATION •Telephone: Call (800) 690-6903.
•Mail: Complete, sign and date your proxy card and return it in the postage-paid envelope. You cannot vote by marking the Internet Notice and returning it.
•At the Annual Meeting:The method or timing of your vote will not limit your right to vote in person at the Annual Meeting. However, if your shares are held in the name of a broker, bank or other nominee, you must obtain a legal proxy, executed in your favor, from the holder of record to be able to vote at the Annual Meeting. You should allow yourself enough time prior to the Annual Meeting to obtain this proxy from the holder of record.
Internet and telephone voting are available 24 hours a day and will close at 11:59 p.m. Eastern Time on Sunday, April 3, 2022. 2, 2023.The shares voted by proxy over the Internet, telephonically or proxy cards received, properly marked, dated, signed and not revoked, will be voted at the Annual Meeting. If you are a registered stockholder, you may revoke your proxy and change your vote: • by submitting a duly executed proxy card bearing a later date;
• by granting a subsequent proxy over the Internet or by telephone;
• by giving written notice of revocation to the Secretary of Broadcom prior to or at the Annual Meeting; or
• by voting in person at the Annual Meeting.
| • | by submitting a duly executed proxy card bearing a later date; | | • | by granting a subsequent proxy over the Internet or by telephone; | | • | by giving written notice of revocation to the Secretary of Broadcom prior to or at the Annual Meeting; or | | • | by voting in person at the Annual Meeting. |
Your attendance at the Annual Meeting itself will not revoke your proxy unless you give written notice of revocation to the Secretary before your proxy is voted or you vote in person at the Annual Meeting. If you are a beneficial owner, you may change or revoke your voting instructions by following the specific directions provided to you by your broker, bank or other nominee, or you may vote in person at the Annual Meeting by obtaining a legal proxy from your broker, bank or other nominee and submitting the legal proxy along with your ballot.
| | | ADDITIONAL MEETING INFORMATION |
Board Recommendations, Required Vote and Effects of Abstentions and Broker Non-Votes
The following chart describes the proposals to be considered at the Annual Meeting, our Board’s recommendations, the vote required for each of the proposals, and the manner in which votes will be counted.
If you are a beneficial owner and do not provide specific voting instructions to your broker, bank or other nominee, the organization that holds your shares will not be authorized to vote your shares, which would result in “broker non-votes,” on proposals other than the ratification of the appointment of PwC as our independent auditors. Accordingly, we encourage you to vote promptly, even if you plan to attend the Annual Meeting.
| | | | | | | | | | | | | | | | | | Proposal | Voting Options | Board Recommendation | Vote Required | Effect of Abstentions | Effect of Broker Non-Votes | To elect each of the nine director nominees named until the next annual meeting of stockholders or until their successors have been elected | For
Against
Abstain | For
each nominee
| Affirmative vote of a majority of votes cast | None | None | To ratify the appointment of our independent registered public accounting firm for our fiscal year ending October 30, 2022 | For
Against
Abstain | For | Affirmative vote of a majority of votes represented at the Annual Meeting and entitled to vote | Against | Broker has discretion to vote | To hold an advisory vote to approve compensation of our named executive officers | For
Against
Abstain | For | Affirmative vote of a majority of votes represented at the Annual Meeting and entitled to vote | Against | None |
If you are a registered stockholder and you return your signed proxy card without giving specific voting instructions, your shares will be voted by the proxy holders - Hock E. Tan, Kirsten M. Spears and Mark D. Brazeal or any one of them, with full power of substitution (together, the “Proxy Holders”) - as recommended by the Board (see table above). If you are a beneficial owner and you do not provide specific voting instructions to your broker, bank or other nominee, your shares will not be voted, resulting in a “broker non-vote” and will have no effect on the Proposals except for Proposal 2 (see table above). We have appointed a representative of Broadridge Investor Communication Solutions, Inc. (“Broadridge”) as the inspector of elections of the Annual Meeting. Preliminary voting results will be announced at the Annual Meeting and the final voting results will be published in a Current Report on Form 8-K within four business days following the Annual Meeting. Broadcom will bear the cost of soliciting proxies. We have retained D. F. King & Co., Inc., an independent proxy solicitation firm, to assist us in soliciting proxies for an estimated fee of $15,000,$17,500, plus reimbursement of reasonable expenses. Broadcom and/or our agents, including certain of our officers, directors and employees, may solicit proxies by mail, telephone, e-mail, fax or in person. No additional compensation will be paid to our officers, directors or employees for such services. Broadcom will reimburse banks, brokerage firms and other custodians, nominees, trustees and fiduciaries for reasonable out-of-pocket expenses incurred by them in sending proxy materials to and soliciting proxies from beneficial holders of Broadcom common stock. 60 2022| 74 | 2023 Proxy Statement
OTHER INFORMATION OTHER INFORMATION Householding of Proxy Materials We have adopted a procedure called “householding” under which one copy of the Internet Notice and, if applicable, our proxy materials will be delivered to multiple stockholders who share an address, unless contrary instructions from one or more stockholders are received. Upon written request, Broadcom will promptly deliver a separate copy of the Internet Notice and, if applicable, the proxy materials to any stockholder at a shared address to which a single copy of any of these documents was delivered. To receive a separate copy of the Internet Notice and, if applicable, the proxy materials, registered stockholders may contact Broadridge at: • By Internet: www.proxyvote.com
• By telephone: (800) 579-1639
• By email: sendmaterial@proxyvote.com
| • | By Internet: www.proxyvote.com | | • | By telephone: (800) 579-1639 | | • | By email: sendmaterial@proxyvote.com |
In addition, if you are receiving multiple copies and would like to receive only one copy for your household, you should contact Broadridge at the address, telephone number or email address above. If you are a beneficial owner, you should contact your broker, bank or other nominee. Stockholder Proposals and Director Nominations for the 20232024 Annual Meeting Proposals to be Included in the Proxy Materials You may submit proposals for consideration at future annual stockholder meetings. To be considered for inclusion in the proxy materials for our annual meeting of stockholders to be held in 20232024 (“20232024 Annual Meeting”), your proposal (other than a proposal for director nomination) must comply with the procedures and requirements set forth in Rule 14a-8 under the Exchange Act and be received no later than October 21, 2022. 20, 2023.Proposals not to be Included in the Proxy Materials Proposals for consideration at the 20232024 Annual Meeting, but not for inclusion in the proxy materials, must be received no earlier than the close of business on December 5, 20224, 2023 and no later than the close of business on January 4, 2023.3, 2024. The proposal must be submitted by a stockholder of record and must set forth the information required by our Bylaws. If you are a beneficial owner of shares held in street name, you can contact the organization that holds your shares for information about how to register your shares directly in your name as a registered stockholder. Nominations for Election of Directors Using Proxy Access A stockholder, or group of up to 20 stockholders, that has owned continuously for at least three years shares of Broadcom common stock representing an aggregate of at least 3% of our outstanding shares, may nominate and include in our proxy materials director nominees constituting up to 20% of our Board, provided that the stockholder(s) and nominee(s) satisfy the requirements in our Bylaws. Notice of proxy access director nominees must be received no earlier than the close of business on September 21, 202220, 2023 and no later than the close of business on October 21, 2022. 20, 2023.Nominations for Election of Directors not Included in the Proxy Materials Director nominations that a stockholder intends to present at the 20232024 Annual Meeting, but does not intend to have included in our proxy materials, must be received no earlier than the close of business on December 5, 20224, 2023 and no later than the close of business on January 4, 2023.3, 2024. Notice of director nominations must be submitted by a registered stockholder, and must set forth the information required by our Bylaws.Bylaws and comply with additional OTHER INFORMATION requirements set forth in Rule 14a-19(b) under the Exchange Act. If you are a beneficial owner of shares held in street name, you can contact the organization that holds your shares for information about how to register your shares directly in your name as a registered stockholder.
Delivery Method for Stockholder Proposals and Director Nominations Notices of stockholder proposals and the intent to nominate directors at the 20232024 Annual Meeting, and all supporting materials required by our Bylaws, must be submitted by one of the following means: • By Mail: Broadcom Inc., 1320 Ridder Park Drive, San Jose, California 95131, Attention: Secretary
• By Email: compliance.officer@broadcom.com
| • | By Mail: Broadcom Inc., 1320 Ridder Park Drive, San Jose, California 95131, Attention: Secretary | | • | By Email: compliance.officer@broadcom.com |
Broadcom reserves the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements. Qualified director candidates suggested by holders of Broadcom common stock will be evaluated in the same manner as any other candidate for election to our Board (other than those standing for re-election). Our management does not know of any matters to be presented at the Annual Meeting other than those set forth in this Proxy Statement. If any other matters are properly presented for a vote, the enclosed proxy confers discretionary authority to the individuals named as Proxy Holders. Copies of this Proxy Statement and the 20212022 Annual Report, as filed with the SEC, are also available on our website at www.broadcom.com or you can request a copy free of charge by calling Investor Relations at (408) 433-8000 or emailing investor.relations@broadcom.com. Upon request, Broadcom will furnish without charge to each person to whom this Proxy Statement is delivered a copy of any exhibit listed in our 20212022 Annual Report. You may request a copy, at no cost, by writing, telephoning or emailing us at:
Attn: Investor Relations
1320 Ridder Park Dive
San Jose, California 95131
Telephone: (408) 433-8000
Email: investor.relations@broadcom.com
To ensure timely delivery of any materials requested prior to the date of the Annual Meeting, you should request such materials no later than March 16, 2022. 17, 2023.By Order of the Board, 
Hock E. Tan Director, President and Chief Executive Officer
17, 2023San Jose, California
62 2022| 76 | 2023 Proxy Statement
APPENDIX A Reconciliation of Non-GAAP Financial Measures
| | | | | | | | | | | | | | | | | | | | | | | | | | | Fiscal Year Ended | | | October 31, 2021 | | November 1, 2020 | | November 3, 2019 | | (in millions) | | Operating income on GAAP basis | $ | 8,519 | $ | 4,014 | $ | 3,444 | | Purchase accounting effect on inventory | | — | | 11 | | — | | Amortization of acquisition-related intangible assets | | 5,403 | | 6,220 | | 5,212 | | Stock-based compensation expense | | 1,704 | | 1,976 | | 2,185 | | Restructuring, impairment and disposal charges | | 165 | | 233 | | 813 | | Litigation settlements | | 1 | | 63 | | — | | Acquisition-related costs | | 120 | | 422 | | 275 | | Operating income on non-GAAP basis | $ | 15,912 | $ | 12,939 | $ | 11,929 | | | | | | | | | Operating income on non-GAAP basis | $ | 15,912 | $ | 12,939 | | | | Provisions or accruals for anticipated payouts under APB Plan | | 764 | | 549 | | | | Adjusted Operating income on non-GAAP basis | $ | 16,676 | $ | 13,488 | | | | | | | | | | | Net cash provided by operating activities | $ | 13,761 | $ | 12,061 | $ | 9,697 | | Purchases of property, plant and equipment | | (440) | | (463) | | (432) | | Free cash flow | $ | 13,321 | $ | 11,598 | $ | 9,265 | | | | | | | |
| | Fiscal Year Ended | | | October 30,
2022 | | October 31,
2021 | | November 1,
2020 | | | | | | | (in millions) | | | | | | Operating income on GAAP basis | $ | 14,225 | | $ | 8,519 | | $ | 4,014 | | | Purchase accounting effect on inventory | | — | | | — | | | 11 | | | Amortization of acquisition-related intangible assets | | 4,359 | | | 5,403 | | | 6,220 | | | Stock-based compensation expense | | 1,533 | | | 1,704 | | | 1,976 | | | Restructuring, impairment and disposal charges | | 62 | | | 165 | | | 233 | | | Litigation settlements | | — | | | 1 | | | 63 | | | Acquisition-related costs | | 115 | | | 120 | | | 422 | | | Operating income on non-GAAP basis | $ | 20,294 | | $ | 15,912 | | $ | 12,939 | | | Operating income on non-GAAP basis | $ | 20,294 | | $ | 15,912 | | | | | | Provisions or accruals for anticipated payouts under APB Plan | | 893 | | | 764 | | | | | | Adjusted operating income on non-GAAP basis | $ | 21,187 | | $ | 16,676 | | | | | | Net cash provided by operating activities | $ | 16,736 | | $ | 13,764 | | $ | 12,061 | | | Purchases of property, plant and equipment | | (424) | | | (443) | | | (463) | | | Free cash flow | $ | 16,312 | | $ | 13,321 | | $ | 11,598 | |
Use of Non-GAAP Financial Measures Non-GAAP results exclude amortization of acquisition-related intangible assets, stock-based compensation expense, restructuring, impairment and disposal charges, acquisition-related costs, including integration costs, purchase accounting effect on inventory, litigation settlements, loss on debt extinguishment, gains (losses) on investments, income (loss) from distinguisheddiscontinued operations, non-GAAP tax reconciliation,reconciling adjustments, and other adjustments. We believe this non-GAAP financial information provides additional insight into our on-going performance. Therefore, we provide this information to investors for a more consistent basis of comparison and to help them evaluate the results of our on-going operations and enable more meaningful period to period comparisons. Management does not believe that these items are reflective of our underlying performance. Internally, these non-GAAP measures are significant measures used by management for purposes of evaluating our core operating performance, establishing internal budgets, calculating return on investment for development programs and growth initiatives, comparing performance with internal forecasts and targeted business models, strategic planning, evaluating and valuing potential acquisition candidates and how their operations compare to our operations, and benchmarking performance externally against our competitors. The exclusion of these and other similar items from our GAAPnon-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent or unusual. The forgoing reconciliation includes a reconciliation of free cash flow to the most comparable GAAP cash flow measure, “Net cash provided by operating activities.” Free cash flow measures have limitations as they omit certain components of the overall cash flow statement and do not represent the residual cash flow available for discretionary expenditures. Investors should not consider presentation of free cash flow measures as implying that stockholders have any right to such cash. Our free cash flow may not be calculated in a manner comparable to similarly named measures used by other companies.
| Broadcom Inc. | | | APPENDIX BA-1 |
APPENDIX B BROADCOM INC. 2012 STOCK INCENTIVE PLAN
(amended and restated April 3, 2023) ARTICLE ONE GENERAL PROVISIONS This 2012 Stock Incentive Plan, formerly known as the Broadcom Corporation 2012 Stock Incentive Plan, was adopted by the Board of Directors of Broadcom Corporation on February 16, 2012 and was approved by the shareholders of Broadcom Corporation on May 15, 2012. The Plan was amended and restated by the Board of Directors of Broadcom Corporation on February 13, 2014 and January 28, 2015. The Plan was amended by the Board of Directors of Broadcom Limited on February 1, 2016. The Plan was amended by the Board on April 4, 2018, was amended and restated by the Board on February 5, 2021 and was approved by the stockholders of the Corporation on April 5, 2021. The Plan was subsequently amended and restated by the Board on February 6, 2023 (the “Board Approval Date”), subject to approval of the stockholders of the Corporation on April 3, 2023. The Plan is intended to promote the interests of Broadcom Inc., a Delaware corporation, by providing eligible persons in the Corporation’s service with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to remain in such service. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the attached Appendix.
| A. | The Plan is divided into two equity incentive programs: |
| • | the Discretionary Grant Program, under which eligible persons may, at the discretion of the Plan Administrator, be granted options to purchase Shares or stock appreciation rights tied to the value of such Shares, and | | • | the Stock Issuance Program, under which eligible persons may be issued Shares pursuant to restricted stock or restricted stock unit awards or other stock-based awards, made by and at the discretion of the Plan Administrator, that vest upon the completion of a designated service period and/or the attainment of pre-established performance milestones, or under which Shares may be issued through direct purchase or as a bonus for services rendered to the Corporation (or any Parent or Subsidiary). |
| B. | The provisions of Articles One and Four shall apply to all equity programs under the Plan and shall govern the interests of all persons under the Plan. |
| III. | ADMINISTRATION OF THE PLAN |
| A. | The Discretionary Grant and Stock Issuance Programs shall be administered by the Plan Administrator, provided, that, any discretionary Awards to members of the committee that serves as the Plan Administrator for such service must be authorized and approved by a disinterested majority of the Board. | | B. | Members of the committee appointed by the Board as the Plan Administrator shall serve for such period as the Board may determine and may be removed by the Board at any time. | | C. | The Plan Administrator shall, within the scope of its administrative functions under the Plan, have full power and authority (subject to the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Discretionary Grant and Stock Issuance Programs |
APPENDIX B | | and to make such determinations under, and issue such interpretations of, the provisions of those programs and any outstanding Awards thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator within the scope of its administrative functions under the Plan shall be final and binding on all parties who have an interest in the Discretionary Grant and Stock Issuance Programs under its jurisdiction or any Award thereunder. | | D. | Service on the Compensation Committee, or other committee appointed by the Board as the Plan Administrator, shall constitute service as a Board member, and members of each such committee shall accordingly be entitled to full indemnification and reimbursement as Board members for their service on such committee. No member of the Compensation Committee, or other committee appointed by the Board as the Plan Administrator, shall be liable for any act or omission made in good faith with respect to the Plan or any Award under the Plan. |
| A. | The persons eligible to participate in the Discretionary Grant and Stock Issuance Programs are as follows: |
| (i) | Employees, | | (ii) | non-employee members of the Board or the board of directors of any Parent or Subsidiary, and | | (iii) | Consultants who provide services to the Corporation (or any Parent or Subsidiary). |
| B. | The Plan Administrator shall, within the scope of its administrative jurisdiction under the Plan, have full authority to determine (i) with respect to Awards made under the Discretionary Grant Program, which eligible persons are to receive such Awards, the time or times when those Awards are to be made, the number of Shares to be covered by each such Award, the status of any awarded option as either an Incentive Option or a Non-Statutory Option, the exercise price per Share in effect for each Award (subject to the limitations set forth in Article Two), the time or times when each Award is to vest and become exercisable, the maximum term for which the Award is to remain outstanding and such other terms of Awards as the Plan Administrator may deem appropriate in its discretion, and (ii) with respect to Awards under the Stock Issuance Program, which eligible persons are to receive such Awards, the time or times when the Awards are to be made, the number of Shares subject to each such Award, the vesting schedule (if any) applicable to the Shares subject to such Award, the cash consideration (if any) payable for such Shares and such other terms of Awards as the Plan Administrator may deem appropriate in its discretion. | | C. | The Plan Administrator shall have the absolute discretion to grant options or stock appreciation rights in accordance with the Discretionary Grant Program and to effect stock issuances or other stock-based awards in accordance with the Stock Issuance Program. |
| V. | STOCK SUBJECT TO THE PLAN |
| A. | The Shares issuable under the Plan shall be authorized but unissued Shares, including Shares subject to Prior Awards and Shares repurchased by the Corporation on the open market. Subject to any additional Shares authorized by the vote of the Board and approved by the stockholders, the aggregate number of Shares reserved for issuance under the Plan from and after the Effective Date shall be (i) the number of Shares subject to outstanding Prior Awards, plus (ii) 45,000,000 Shares. The maximum number of Shares that may be issued pursuant to Incentive Options granted from and after the Effective Date shall equal the number of Shares available for grant under this Section V.A. of Article One, to the extent allowable under Section 422 of the Code and the rules thereunder. | | B. | No one person participating in the Plan may be granted Awards for more than 4,000,000 Shares in the aggregate per calendar year. |
APPENDIX B | C. | Shares subject to outstanding Awards under the Plan, which for purposes of this paragraph shall include Shares subject to outstanding Prior Awards, shall be available for subsequent issuance under the Plan to the extent those Awards expire or terminate for any reason prior to the issuance of the Shares subject to those Awards. Unvested Shares issued under the Plan and subsequently cancelled or repurchased by the Corporation at the original exercise or issue price paid per Share pursuant to the Corporation’s repurchase rights under the Plan shall be added back to the number of Shares reserved for issuance under the Plan and shall accordingly be available for subsequent reissuance under the Plan. In addition, should the exercise price or base price of an Award under the Plan be paid with Shares, the authorized reserve of Shares under the Plan shall be reduced only by the net number of Shares issued under the exercised Award. Should Shares otherwise issuable under the Plan be withheld by the Corporation in satisfaction of the withholding taxes incurred in connection with the issuance, exercise, vesting or settlement of an Award under the Plan, the number of Shares available for issuance under the Plan shall be reduced only by the net number of Shares issued with respect to that Award. | | D. | Shares issued under awards granted by another entity (“other entity awards”) and assumed by the Corporation in connection with a merger, consolidation, stock purchase or similar transaction, or issued by the Corporation under awards substituted for other entity awards in connection with a merger, consolidation, stock purchase or similar transaction, shall not reduce the Shares available for Awards under the Plan, nor shall Shares subject to such assumed or substituted other entity awards be added back to the Shares available for issuance under the Plan. | | E. | If any change is made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of Shares, exchange of Shares, spin-off transaction or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration or should the value of outstanding Shares be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution, appropriate adjustments shall be made by the Plan Administrator to (i) the maximum number and/or class of securities issuable under the Plan, (ii) the maximum number and/or class of securities for which any one person may be granted Awards under the Plan per calendar year, (iii) the number and/or class of securities and the exercise or base price per Share (or any other cash consideration payable per Share) in effect under each outstanding Award under the Discretionary Grant Program, and (iv) the number and/or class of securities subject to each outstanding Award under the Stock Issuance Program and the cash consideration (if any) payable per Share thereunder. To the extent such adjustments are to be made to outstanding Awards, those adjustments shall be effected in a manner that shall preclude the enlargement or dilution of rights and benefits under those Awards. The adjustments determined by the Plan Administrator shall be final, binding and conclusive. |
| A. | Unless otherwise provided in the applicable Award Agreement or another applicable agreement between the Optionee or the Participant and the Corporation or any Parent or Subsidiary, any Award that is outstanding immediately prior to a Change in Control will not vest, lapse (including, without limitation, with respect to forfeiture restrictions or rights of repurchase), and/or become exercisable (as applicable) solely as a result of the Change in Control, but will instead (i) be assumed by the Successor, (ii) continued in full force and effect pursuant to the terms of the Change in Control transaction, or (iii) replaced with a cash retention program of the Successor that preserves the spread existing at the time of the Change in Control on the Shares as to which the Award is not otherwise at that time vested and exercisable, and such Award, as so assumed, continued or replaced, will vest, become exercisable or have any restrictions lapse pursuant to the terms of such Award in effect immediately prior to the Change in Control, subject to subsections (i)-(ii) below. |
| (i) | A Performance-Based Award shall not be deemed to have been assumed, continued or replaced in accordance with Section VI.A of Article One unless the following conditions are satisfied: (i) Performance-Based Awards for which the Performance Period has been completed as of the date of the Change in Control but have not yet been paid will be assumed, continued or replaced |
APPENDIX B | | based on actual performance during the Performance Period; and (ii) Performance-Based Awards for which the Performance Period has not been completed as of the date of the Change in Control will be deemed to have been achieved at one hundred percent (100%) of target levels for the entire Performance Period (and not pro rata); provided that, in each case, the Performance-Based Awards will continue to be subject to any time-based vesting conditions that were applicable to the Performance-Based Awards prior to their assumption, continuation, or replacement but they will not be subject to any performance goals or metrics following the consummation of the Change in Control. | | (ii) | The determination of whether an Award is assumed, continued or replaced in accordance with Section VI.A of Article One shall be made by the Plan Administrator, as constituted immediately before the applicable Change in Control, in its sole discretion. |
| B. | No Assumption, Continuation or Replacement of Award. Unless otherwise provided in the applicable Award Agreement or another applicable agreement between the Optionee or the Participant and the Corporation or any Parent or Subsidiary, if for any reason outstanding Awards are not assumed, continued, or replaced pursuant to Section VI.A of Article One, such outstanding Awards will be subject to the following rules, in each case effective immediately prior to the Change in Control but conditioned upon completion of such Change in Control, with any corresponding payments made as soon as reasonably practicable after the Change in Control, but no later than within 30 days following the date of the Change in Control: |
| (i) | Discretionary Grant Program Awards. All Awards made under the Discretionary Grant Program will become fully vested and exercisable. If an Optionee does not exercise all Awards made under the Discretionary Grant Program prior to the Change in Control, the Plan Administrator will pay such Optionee in exchange for the cancellation of each such unexercised Award the difference between the exercise price or base price per Share of such Award (as applicable) and the per Share consideration provided to other similarly situated shareholders in such Change in Control, with such payment to be made in cash and/or Shares at the Plan Administrator’s discretion (less applicable Withholding Taxes); provided, however that if any such payment is to be made in Shares, the Plan Administrator may in its discretion, provide such Optionees the consideration provided to similarly situated stockholders in such Change in Control; provided further, however, that if the exercise price or base price of such Award exceeds the aforementioned consideration provided, then such Award will be canceled and terminated without any payment. | | (ii) | Stock Issuance Program Awards that are not Performance-Based Awards. All restrictions imposed on Awards made under the Stock Issuance Program that are not performance-based will lapse and be of no further force and effect, such that all such Awards made under the Stock Issuance Program will become fully vested. Such Awards made under the Stock Issuance Program will be settled (if applicable) and paid in cash and/or Shares at the Plan Administrator’s discretion; provided, however that if any such payment is to be made in Shares, the Plan Administrator may in its discretion, provide such holders the consideration provided to other similarly situated stockholders in such Change in Control. | | (iii) | Performance-Based Awards. All Performance-Based Awards for which the Performance Period has been completed as of the date of the Change Control but have not yet been paid will vest and be paid in cash and/or Shares at such time at the Plan Administrator’s discretion, with all performance goals to be deemed achieved at actual performance. Moreover, unless otherwise provided in the applicable Award Agreement or another applicable agreement between the Optionee or the Participant and the Corporation or any Parent or Subsidiary, all Performance-Based Awards for which the Performance Period has not been completed as of the date of the Change in Control will, with respect to each applicable performance goal and other vesting criteria, be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met, and vest and be paid out for the entire Performance Period (and not pro rata), with the manner of payment to be made in cash or Shares at the Plan Administrator’s discretion; provided, however that if any such |
APPENDIX B | | payment is to be made in Shares, the Plan Administrator may in its reasonable discretion, provide such holders the consideration provided to other similarly situated stockholders in such Change in Control. |
| C. | Other Change in Control Matters. |
| (i) | Immediately following the consummation of the Change in Control, all outstanding Awards shall terminate and cease to be outstanding, except to the extent assumed by the Successor or otherwise expressly continued in full force and effect pursuant to the terms of the Change in Control transaction. | | (ii) | Awards outstanding shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets, subject to Section V.E of Article One. | | (iii) | Notwithstanding any other provision of the Plan or any Award Agreement provision, the provisions of Section VI of Article One may not be terminated, amended, or modified in any manner that adversely affects any then-outstanding Award or Optionee or Participant without the prior written consent of the Optionee or Participant, unless for the purpose of complying with Applicable Laws or regulations. |
ARTICLE TWO DISCRETIONARY GRANT PROGRAM Each option shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided, however, that each such document shall comply with the terms specified below. Each document evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan applicable to such options.
| (i) | The exercise price per Share shall be fixed by the Plan Administrator but shall not be less than one hundred percent (100%) of the Fair Market Value per Share on the option grant date. Notwithstanding the foregoing, options may be granted with an exercise price per Share of less than one hundred percent (100%) of the Fair Market Value per Share on the option grant date pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code. | | (ii) | The exercise price shall become immediately due upon exercise of the option and shall be payable in one or more of the forms specified below: |
| (a) | cash, | | (b) | Shares valued at Fair Market Value on the Exercise Date and held for the period (if any) necessary to avoid any additional charges to the Corporation’s earnings for financial reporting purposes, or | | (c) | to the extent the option is exercised for vested Shares, through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable instructions to (a) a brokerage firm (designated by the Corporation) to effect the immediate sale of the purchased Shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds, as determined by the Corporation, to cover the aggregate exercise price payable for the purchased Shares plus all Withholding Taxes to be withheld by the Corporation by reason of such exercise and (b) the Corporation to deliver the certificates for the purchased Shares directly to such brokerage firm to complete the sale, or |
APPENDIX B | (d) | if Optionee ceases Service for any reason other than Misconduct and the entire exercise period applicable to the option remaining after such cessation of Service falls within a trading blackout period which the Corporation may impose from time to time, the Plan Administrator may, in its discretion, permit the Corporation (either at the time the option is granted or at any time thereafter) to (a) automatically exercise such portion of the option which has not been exercised previously on the last business day of the exercise period and (b) automatically withhold on such day a number of Shares subject to the option having a Fair Market Value (measured as of the exercise date) equal to (i) the aggregate exercise price of the Shares with respect to which the option is being exercised and (ii) the amount necessary to satisfy Withholding Taxes; provided, that such automatic exercise shall only occur if the Fair Market Value per Share on the last business day of the exercise period of the option is equal to or greater than 101% of the exercise price per Share of the option and, provided, further, that the Plan Administrator shall have the discretionary authority to revoke or amend this Section I.A.2.iv. of this Article Two (and any related provisions in an applicable Award Agreement) at any time without the consent of Optionee. |
Except to the extent the procedure set forth in either Section I.A.2.iii. or Section I.A.2.iv. of this Article Two is utilized, payment of the exercise price for the purchased Shares must be made on the Exercise Date. | B. | Exercise and Term of Options. Each option shall be exercisable at such time or times, during such period and for such number of Shares as shall be determined by the Plan Administrator and set forth in the documents evidencing the option. However, no option shall have a term in excess of ten (10) years measured from the option grant date. An option shall not be exercisable for any fractional Shares. | | C. | Effect of Termination of Service. |
| (i) | The following provisions shall govern the exercise of any options held by the Optionee at the time of cessation of Service or death: |
| (a) | Any option outstanding at the time of the Optionee’s cessation of Service for any reason shall remain exercisable for such period of time thereafter as shall be determined by the Plan Administrator and set forth in the documents evidencing the option or as otherwise specifically authorized by the Plan Administrator in its sole discretion pursuant to an express written agreement with Optionee, but no such option shall be exercisable after the expiration of the option term. | | (b) | Any option held by the Optionee at the time of death and exercisable in whole or in part at that time may be subsequently exercised by the personal representative of the Optionee’s estate or by the person or persons to whom the option is transferred pursuant to the Optionee’s will or the laws of inheritance. | | (c) | Should the Optionee’s Service be terminated for Misconduct or should the Optionee otherwise engage in Misconduct while holding one or more outstanding options under this Article Two (regardless of whether Optionee’s Service is terminated for Misconduct), all those options shall terminate immediately and cease to be outstanding. | | (d) | During the applicable post-Service exercise period, the option may not be exercised in the aggregate for more than the number of vested Shares for which that option is at the time exercisable. No additional Shares shall vest under the option following the Optionee’s cessation of Service, except to the extent (if any) specifically authorized by the Plan Administrator in its sole discretion pursuant to an express written agreement with Optionee. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option term, the option shall terminate and cease to be outstanding for any Shares for which the option has not been exercised. |
APPENDIX B | (ii) | The Plan Administrator shall have complete discretion, exercisable either at the time an option is granted or at any time while the option remains outstanding, to: |
| (a) | extend the period of time for which the option is to remain exercisable following the Optionee’s cessation of Service from the limited exercise period otherwise in effect for that option to such greater period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration of the option term, and/or | | (b) | permit the option to be exercised, during the applicable post-Service exercise period, not only with respect to the number of vested Shares for which such option is exercisable at the time of the Optionee’s cessation of Service but also with respect to one or more additional options in which the Optionee would have vested had the Optionee continued in Service. |
| D. | Stockholder Rights. The holder of an option shall have no stockholder rights with respect to the Shares subject to the option until such person shall have exercised the option, paid the exercise price for and become a holder of record of the purchased Shares. | | E. | Repurchase Rights. The Plan Administrator shall have the discretion to grant options that are exercisable for unvested Shares. Should the Optionee cease Service while holding such unvested Shares, the Corporation shall have the right to repurchase, at the exercise price paid per Share, any or all of those unvested Shares. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased Shares) shall be established by the Plan Administrator and set forth in the document evidencing such repurchase right. | | F. | Transferability of Options. The transferability of options granted under the Plan shall be governed by the following provisions: |
| (i) | Incentive Options. During the lifetime of the Optionee, Incentive Options shall be exercisable only by the Optionee and shall not be assignable or transferable other than by will or the laws of inheritance following the Optionee’s death. | | (ii) | Non-Statutory Options. Non-Statutory Options shall be subject to the same limitation on transfer as Incentive Options, except that the Plan Administrator may structure one or more Non-Statutory Options so that the option may be assigned in whole or in part during the Optionee’s lifetime by gift or pursuant to a domestic relations order to one or more Family Members of the Optionee or to a trust established exclusively for the Optionee and/or one or more such Family Members. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate. |
The terms specified below, together with any additions, deletions or changes thereto imposed from time to time pursuant to the provisions of the Code governing Incentive Options, shall be applicable to all Incentive Options. Except as modified by the provisions of this Section II, all the provisions of Articles One, Two and Four shall be applicable to Incentive Options. Options that are specifically designated as Non-Statutory Options when issued under the Plan shall not be subject to the terms of this Section II. | A. | Eligibility. Incentive Options may be granted only to Employees. | | B. | Exercise Price. The exercise price per Share shall not be less than one hundred percent (100%) of the Fair Market Value per Share on the option grant date. |
APPENDIX B | C. | Dollar Limitation. Notwithstanding any Award’s designation as an Incentive Option, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Options are exercisable for the first time by the Optionee during any calendar year (under all plans of the Corporation and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Incentive Options will be treated as Non-Statutory Options. For purposes of the foregoing limitation, options shall be deemed to become first exercisable in the applicable calendar year based on the chronological order in which they were granted, except to the extent otherwise provided under Applicable Laws or regulations. | | D. | 10% Stockholder. If any Employee to whom an Incentive Option is granted is a 10% Stockholder, then the exercise price per Share shall not be less than one hundred ten percent (110%) of the Fair Market Value per Share on the option grant date, and the option term shall not exceed five (5) years measured from the option grant date. | | E. | Grant Date Limitation. Incentive Options shall not be granted after ten (10) years following the Board Approval Date. |
| III. | STOCK APPRECIATION RIGHTS |
| A. | Authority. The Plan Administrator shall have full power and authority, exercisable in its sole discretion, to grant stock appreciation rights in accordance with this Section III to selected Optionees or other individuals eligible to receive option grants under the Discretionary Grant Program. | | B. | Types. Two types of stock appreciation rights shall be authorized for issuance under this Section III: (i) tandem stock appreciation rights (“Tandem Rights”), and (ii) standalone stock appreciation rights (“Standalone Rights”). | | C. | Tandem Rights. The following terms and conditions shall govern the grant and exercise of Tandem Rights. |
| (i) | One or more Optionees may be granted a Tandem Right, exercisable upon such terms and conditions as the Plan Administrator may establish, to elect between the exercise of the underlying stock option for Shares or the surrender of that option in exchange for a distribution from the Corporation in an amount equal to the excess of (i) the Fair Market Value (on the option surrender date) of the number of Shares in which the Optionee is at the time vested under the surrendered option (or surrendered portion thereof) over (ii) the aggregate exercise price payable for such vested Shares. The base price per Share of any Tandem Rights shall be set in accordance with Section I.A.1 of Article Two and Sections II.B and D. of Article Two, as applicable. | | (ii) | No such option surrender shall be effective unless it is approved by the Plan Administrator, either at the time of the actual option surrender or at any earlier time. If the surrender is so approved, then the distribution to which the Optionee shall accordingly become entitled under this Section III may be made in Shares valued at Fair Market Value on the option surrender date, in cash, or partly in Shares and partly in cash, as the Plan Administrator shall in its sole discretion deem appropriate. | | (iii) | If the surrender of an option is not approved by the Plan Administrator, then the Optionee shall retain whatever rights the Optionee had under the surrendered option (or surrendered portion thereof) on the option surrender date and may exercise such rights at any time prior to the later of (i) five (5) business days after the receipt of the rejection notice or (ii) the last day on which the option is otherwise exercisable in accordance with the terms of the instrument evidencing such option, but in no event may such rights be exercised more than ten (10) years after the date of the option grant. No Tandem Rights shall have a maximum term in excess of ten (10) years measured from the grant date. |
| D. | Standalone Rights. The following terms and conditions shall govern the grant and exercise of Standalone Rights under this Article Two: |
| (i) | One or more individuals eligible to participate in the Discretionary Grant Program may be granted a Standalone Right not tied to any underlying option under this Discretionary Grant Program. |
APPENDIX B | | The Standalone Right shall relate to a specified number of Shares and shall be exercisable upon such terms and conditions as the Plan Administrator may establish. In no event, however, may the Standalone Right have a maximum term in excess of ten (10) years measured from the grant date. Upon exercise of the Standalone Right, the holder shall be entitled to receive a distribution from the Corporation in an amount equal to the excess of (i) the aggregate Fair Market Value (on the exercise date) of the Shares underlying the exercised right over (ii) the aggregate base price in effect for those Shares. | | (ii) | The number of Shares underlying each Standalone Right and the base price in effect for those Shares shall be determined by the Plan Administrator in its sole discretion at the time the Standalone Right is granted. In no event, however, may the base price per Share be less than the Fair Market Value per underlying Share on the grant date. | | (iii) | Standalone Rights shall be subject to the same transferability restrictions applicable to Non-Statutory Options and may not be transferred during the holder’s lifetime, except by gift to one or more Family Members of the holder or to a trust established exclusively for the holder and/or such Family Members or pursuant to a domestic relations order covering the Standalone Right as marital property. | | (iv) | The distribution with respect to an exercised Standalone Right may be made in Shares valued at Fair Market Value on the exercise date, in cash, or partly in Shares and partly in cash, as the Plan Administrator shall in its sole discretion deem appropriate. | | (v) | The holder of a Standalone Right shall have no stockholder rights with respect to the Shares subject to the Standalone Right unless and until such person shall have exercised the Standalone Right and become a holder of record of Shares issued upon the exercise of such Standalone Right. |
| E. | Post-Service Exercise. The provisions governing the exercise of Tandem and Standalone Appreciation Rights following the cessation of the recipient’s Service or the recipient’s death shall be substantially the same as those set forth in Section I.C of this Article Two for the options granted under the Discretionary Grant Program. | | F. | Net Counting. Upon the exercise of any Tandem or Standalone Right under this Section III, the share reserve under Section V of Article One shall be reduced only by the net number of Shares actually issued by the Corporation upon such exercise, and not by the gross number of Shares as to which such Tandem or Standalone Right is exercised. | | G. | Repricing of Awards Made Under the Discretionary Grant Program. Without first obtaining approval of the stockholders of the Corporation, neither the Board nor the Plan Administrator shall approve either (a) the cancellation of Awards of outstanding stock options or stock appreciation rights and the grant in substitution therefore of new stock options or stock appreciation rights having a lower exercise price or base price, as the case may be, or (b) the amendment of outstanding Awards of stock options or stock appreciation rights to reduce the exercise price or base price, as the case may be, thereof. This paragraph shall not be construed to apply to: (i) “issuing or assuming a stock option in a transaction to which Section 424(a) applies” within the meaning of Section 424 of the Code; or (ii) adjustments made pursuant to Sections V.E or VI.A of Article One herein. |
ARTICLE THREE STOCK ISSUANCE PROGRAM
| A. | Issuances. Shares may be issued under the Stock Issuance Program through direct and immediate issuances without any intervening option grants. Each such stock issuance shall be evidenced by an Award Agreement that complies with the terms specified below. Shares may also be issued under the |
APPENDIX B | | Stock Issuance Program pursuant to share right awards or restricted stock units, awarded by and at the discretion of the Plan Administrator, that entitle the recipients to receive the Shares underlying those awards or units upon the attainment of designated performance goals and/or the satisfaction of specified Service requirements or upon the expiration of a designated time period following the vesting of those awards or units. |
| (i) | The price per Share at which Shares may be issued under the Stock Issuance Program shall be fixed by the Plan Administrator, but shall not be less than one hundred percent (100%) of the Fair Market Value per Share on the issuance date. | | (ii) | Shares may be issued under the Stock Issuance Program for any of the following items of consideration that the Plan Administrator may deem appropriate in each individual instance: |
| (a) | cash; | | (b) | past services rendered to the Corporation (or any Parent or Subsidiary); or | | (c) | any other valid form of consideration permissible under the General Corporation Law of the State of Delaware at the time such Shares are issued. |
| (i) | Shares issued under the Stock Issuance Program may, in the discretion of the Plan Administrator, be fully and immediately vested upon issuance or may vest in one or more installments over the Participant’s period of Service and/or upon attainment of specified performance objectives and/or upon the Participant’s attainment of retirement eligibility (as defined in the applicable Award Agreement). The elements of the vesting schedule applicable to any unvested Shares issued under the Stock Issuance Program shall be determined by the Plan Administrator and incorporated into the Award Agreement. Shares may also be issued under the Stock Issuance Program pursuant to share right awards or restricted stock units that entitle the recipients to receive the Shares underlying those awards and/or units upon the attainment of designated performance goals or the satisfaction of specified Service requirements or upon the Participant’s attainment of retirement eligibility (as defined in the applicable Award Agreement) or upon the expiration of a designated time period following the vesting of those awards or units, including (without limitation) a deferred distribution date following the termination of the Participant’s Service. | | (ii) | The Plan Administrator shall also have the discretionary authority to structure one or more Awards under the Stock Issuance Program so that the Shares subject to those Awards shall vest (or vest and become issuable) upon the achievement of pre-established performance goals, including, without limitation, goals based on total stockholder return. Such performance goals may be based upon the attainment of specified levels of the Corporation’s performance relative to the performance of other entities and may also be based on the performance of any or all of the Corporation’s business groups or divisions thereof or any Parent or Subsidiary. Performance goals may include a minimum threshold level of performance below which no award will be earned, levels of performance at which specified portions of an award will be earned, and a maximum level of performance at which an award will be fully earned. The Plan Administrator may provide that, if the actual level of attainment for any performance objective is between two specified levels, the amount of the award attributable to that performance objective shall be interpolated on a straight-line basis. | | (iii) | Any new, substituted or additional securities or other property that the Participant may have the right to receive with respect to the Participant’s unvested Shares by reason of any stock dividend, stock split, recapitalization, combination of Shares, exchange of Shares, spin-off transaction or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration or a substantial reduction in the value of outstanding Shares as a result of a spin-off transaction or an extraordinary dividend or distribution, shall be issued subject to (i) the |
APPENDIX B | | same vesting requirements applicable to the Participant’s unvested Shares and (ii) such escrow arrangements as the Plan Administrator shall deem appropriate. | | (iv) | The Participant shall have the right to vote unvested Shares issued to the Participant under the Stock Issuance Program. The Participant shall not have the right to vote the Shares subject to a restricted stock unit or share right award until that award vests and the Shares are actually issued thereunder. Dividend-equivalent units may be credited, either in cash or in actual or phantom Shares, on outstanding unvested Shares issued under the Stock Issuance Program or restricted stock unit or share right awards, subject to such terms and conditions as the Plan Administrator may deem appropriate, provided that any applicable dividend and dividend equivalent amounts with respect to unvested Shares or any Share underlying any Award may be accrued but not paid to a Participant until all conditions or restrictions relating to such Share have been satisfied or lapsed and shall be forfeited if all of such conditions or restrictions are never satisfied or lapse. | | (v) | Except as otherwise provided in the Plan or the applicable Award Agreement, should the Participant cease to remain in Service while holding one or more unvested Shares issued under the Stock Issuance Program or a restricted stock unit award or share right award under the Stock Issuance Program or should the performance objectives not be attained with respect to one or more such unvested Shares, then those Shares shall be immediately surrendered to the Corporation for cancellation, the Participant shall have no further stockholder rights with respect to those Shares, and/or no Shares or other consideration shall actually be issued to the Participant in satisfaction of such awards, as applicable. To the extent the surrendered Shares were previously issued to the Participant for consideration paid in cash, cash equivalent or otherwise, the Corporation shall repay to the Participant the same amount and form of consideration as the Participant paid for the surrendered Shares. | | (vi) | The Plan Administrator may in its discretion waive the surrender and cancellation of one or more unvested Shares that would otherwise occur upon the cessation of the Participant’s Service or the non-attainment of the performance objectives applicable to those Shares. The Plan Administrator shall also have the discretionary authority to issue vested Shares under one or more outstanding share right awards or restricted stock units as to which the designated performance goals or Service requirements have not been attained or satisfied. Such waiver may be effected at any time, whether before or after the Participant’s cessation of Service or the attainment or non-attainment of the applicable performance objectives. |
ARTICLE FOUR MISCELLANEOUS
| A. | Corporation’s obligation to deliver Shares upon the issuance, exercise or vesting of Awards under the Plan shall be subject to the satisfaction, as determined by the Corporation, of all Withholding Taxes. The Corporation shall have the right to determine the manner in which Withholding Taxes are provided for, and need not apply the same manner of providing for Withholding Taxes for all Optionees or Participants. | | B. | In addition to the automatic withholding provision set forth in Section I.A.2.iv of Article Two, the Plan Administrator may, in its discretion, provide any or all Optionees or Participants to whom Awards are made under the Plan with the right to utilize the following methods to satisfy all or part of the Withholding Taxes to which those holders may become subject in connection with the issuance, exercise or vesting of those Awards. |
| (i) | Share Withholding. The election to have the Corporation withhold, from the Shares otherwise issuable upon the issuance, exercise or vesting of those Awards a portion of those Shares with an aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to exceed one |
APPENDIX B | | hundred percent (100%)) designated by the Optionee or Participant and make a cash payment equal to such Fair Market Value directly to the appropriate taxing authorities on such individual’s behalf. The Shares so withheld shall not reduce the number of Shares authorized for issuance under the Plan. | | (ii) | Share Delivery. The election to deliver to the Corporation, at the time the Award is issued, exercised or vests, one or more Shares previously acquired by such Optionee or Participant (other than in connection with the issuance, exercise or vesting triggering the Withholding Taxes) with an aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to exceed one hundred percent (100%)) designated by such holder. The Shares so delivered shall not be added to the Shares authorized for issuance under the Plan. | | (iii) | Cash Payment by the Optionee or Participant. The election for the Optionee or Participant to tender to the Corporation a cash payment equal to the percentage of the Withholding Taxes (not to exceed one hundred percent (100%)) designated by such holder. |
| II. | COMPLIANCE WITH SECTION 409A OF THE CODE |
The Plan as well as payments and benefits under the Plan are intended to be exempt from, or to the extent subject thereto, to comply with Section 409A of the Code, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted in accordance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, an Optionee or Participant shall not be considered to have terminated Service with the Corporation, or a Parent or Subsidiary, for purposes of the Plan and no payment shall be due to the Optionee or Participant under the Plan or any Award until the Optionee or Participant would be considered to have incurred a “separation from service” from the Corporation, its Parent or any Subsidiary within the meaning of Section 409A of the Code. Any payments described in the Plan that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan, to the extent that any Awards are payable upon a separation from service and such payment would result in the imposition of any individual tax and penalty interest charges imposed under Section 409A of the Code, the settlement and payment of such awards (or other amounts) shall instead be made on the first business day after the date that is six (6) months following such separation from service (or death, if earlier). Each amount to be paid or benefit to be provided under this Plan shall be construed as a separate identified payment for purposes of Section 409A of the Code. The Corporation makes no representation that any or all of the payments or benefits described in this Plan will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment. The Optionee or the Participant (as applicable) shall be solely responsible for the payment of any taxes and penalties incurred under Section 409A. Unvested Shares issued under the Plan may, in the Plan Administrator’s discretion, be held in escrow by the Corporation until the Participant’s interest in such Shares vests or may be issued directly to the Participant with restrictive legends on the certificates evidencing those unvested Shares. | IV. | EFFECTIVE DATE AND TERM OF THE PLAN |
| A. | The Plan shall be effective immediately on the Effective Date. | | B. | The Plan shall terminate upon the earliest to occur of (i) the date on which all Shares available for issuance under the Plan shall have been issued as fully-vested Shares or (ii) the termination of all outstanding Awards in connection with a Change in Control. All Awards outstanding at the time of Plan termination shall continue to have force and effect in accordance with the provisions of the documents evidencing such Awards. |
APPENDIX B The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects. However, no such amendment or modification shall adversely affect the rights and obligations with respect to Awards at the time outstanding under the Plan unless the Optionee or the Participant consents to such amendment or modification. In addition, stockholder approval will be required for any amendment to the Plan that (i) materially increases the number of Shares available for issuance under the Plan, (ii) materially expands the class of individuals eligible to receive option grants or other awards under the Plan, (iii) materially increases the benefits accruing to the Optionees and Participants under the Plan or materially reduces the price at which Shares may be issued or purchased under the Plan, (iv) materially extends the term of the Plan, (v) expands the types of awards available for issuance under the Plan, or (vi) would require stockholder approval under any Applicable Laws, rules or regulations. In addition, the Board may not amend the Plan to remove the requirement for stockholder approval of any form of repricing of Awards made under the Discretionary Grant Program, as specified in Section IV of Article Two. Any cash proceeds received by the Corporation from the sale of Shares under the Plan shall be used for general corporate purposes.
| A. | The implementation of the Plan, the grant of any Award and the issuance of Shares in connection with the issuance, exercise or vesting of any Award made under the Plan shall be subject to the Corporation’s procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the Awards made under the Plan and the Shares issuable pursuant to those Awards. | | B. | No Shares or other assets shall be issued or delivered under the Plan unless and until there shall have been compliance with all applicable requirements of Federal, state and foreign securities and other laws or regulations, including the filing and effectiveness of the Form S-8 registration statement for the Shares issuable under the Plan, and all applicable listing requirements of any stock exchange on which Common Stock is then listed for trading. |
| VIII. | NO EMPLOYMENT/SERVICE RIGHTS |
Nothing in the Plan shall confer upon the Optionee or the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of the Optionee or the Participant, which rights are hereby expressly reserved by each, to terminate such person’s Service at any time for any reason, with or without cause. APPENDIX The following definitions shall be in effect under the Plan: | A. | Applicable Laws means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any non-U.S. country or jurisdiction where Awards are, or will be, granted under the Plan. | | B. | Award shall mean any of the following stock or stock-based awards authorized for issuance or grant under the Plan: stock option, stock appreciation right, direct stock issuance, restricted stock or restricted stock unit award or other stock-based award. | | C. | Award Agreement shall mean the written or electronic agreement entered into by the Corporation and the Participant setting forth the terms and provisions applicable to each Award granted under the Plan. Each Award Agreement is subject to the terms and conditions of the Plan. |
APPENDIX B | D. | Board shall mean the Corporation’s Board of Directors. | | E. | Change in Control shall mean a change in ownership or control of the Corporation effected through any of the following transactions, unless otherwise provided in the applicable Award Agreement or another applicable agreement between the Optionee or the Participant and the Corporation or any Parent or Subsidiary: |
| (i) | a stockholder-approved merger or consolidation is consummated in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or | | (ii) | a stockholder-approved sale, transfer or other disposition of all or substantially all of the Corporation’s assets in complete liquidation or dissolution of the Corporation, or | | (iii) | the acquisition, directly or indirectly by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly to the Corporation’s stockholders or pursuant to a private transaction or series of transactions with one or more of the Corporation’s stockholders, or | | (iv) | a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be composed of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination. |
| F. | Code shall mean the Internal Revenue Code of 1986, as amended. | | G. | Common Stock shall mean the Corporation’s common stock, par value $0.001 per Share. | | H. | Compensation Committee shall mean the Compensation Committee of the Board. | | I. | Consultant shall mean any natural person, including an advisor, engaged by the Corporation or any Parent or Subsidiary to render bona fide services to such entity, provided the services (i) are not in connection with the offer or sale of securities in a capital-raising transaction, and (ii) do not directly promote or maintain a market for the Corporation’s securities, in each case, within the meaning of Form S-8 promulgated under the Securities Act, and provided, further, that a Consultant will include only those persons to whom the issuance of Shares may be registered under Form S-8 promulgated under the Securities Act. | | J. | Corporation shall mean Broadcom Inc., a Delaware corporation. | | K. | Discretionary Grant Program shall mean the discretionary grant program in effect under Article Two pursuant to which stock options and stock appreciation rights may be granted to one or more eligible individuals. | | L. | Effective Date shall mean April 3, 2023, the date the Plan was approved by the Corporation’s stockholders at the annual meeting of stockholders. | | M. | Eligible Director shall mean a Board member who is not, at the time of such determination, an employee of the Corporation (or any Parent or Subsidiary). | | N. | Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance. |
APPENDIX B | O. | Exercise Date shall mean the date on which the Corporation shall have received written notice of the option exercise. | | P. | Fair Market Value per Share on any relevant date shall be determined in accordance with the following provisions: |
| (i) | If the Common Stock is at the time traded on the Nasdaq Global Select Market (or the Nasdaq Global Market), then the Fair Market Value shall be the closing selling price per Share at the close of regular trading hours (i.e. before after-hours trading begins) on the Nasdaq Global Select Market (or the Nasdaq Global Market) on the date in question, as such price is reported by the Nasdaq Global Select Market (or the Nasdaq Global Market) either as reported on the Nasdaq website (www.nasdaq.com), or otherwise. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. | | (ii) | If the Common Stock is at the time listed on any other Stock Exchange, then the Fair Market Value shall be the closing selling price per Share at the close of regular trading hours (i.e. before after-hours trading begins) on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. |
| Q. | Family Member means, with respect to a particular Optionee or Participant, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law. | | R. | Incentive Option shall mean an option that satisfies the requirements of Section 422 of the Code. | | S. | Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty by the Optionee or Participant, any unauthorized use or disclosure by such person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), the Optionee’s or Participant’s material failure to comply with or observe the Corporation’s rules or policies (including, without limitation, codes of conduct, employee handbooks or similar rules or policies, and including, without limitation policies prohibiting harassment (sexual or otherwise)), a material breach by the Optionee or Participant of any of the Optionee’s or Participant’s agreements with the Corporation or any Parent or Subsidiary, or any other intentional misconduct by such person adversely affecting the business or affairs or reputation of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not in any way preclude or restrict the right of the Corporation (or any Parent or Subsidiary) to discharge or dismiss any Optionee, Participant or other person in the Service of the Corporation (or any Parent or Subsidiary) for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan, to constitute grounds for termination for Misconduct. | | T. | 1934 Act shall mean the Securities Exchange Act of 1934, as amended. | | U. | Non-Statutory Option shall mean an option not intended to satisfy the requirements of Section 422 of the Code. | | V. | Optionee shall mean any person to whom an Award is granted under the Discretionary Grant Program. | | W. | Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. | | X. | Participant shall mean any person who is issued Shares or restricted stock units or other stock-based awards under the Stock Issuance Program. |
APPENDIX B | Y. | Performance-Based Awards shall mean Awards that are subject to performance vesting conditions. | | Z. | Performance Period shall mean the time period during which the performance vesting conditions applicable to Performance-Based Awards must be met. | | AA. | Plan shall mean the Corporation’s 2012 Stock Incentive Plan, as set forth in this document. | | BB. | Plan Administrator shall mean the Compensation Committee or other committee appointed by the Board, which is authorized to administer the Discretionary Grant and Stock Issuance Programs with respect to one or more classes of eligible persons, provided that the independent directors of the Board may act as the Plan Administrator with regard to any Award to the Corporation’s Chief Executive Officer. | | CC. | Prior Award shall mean, individually or collectively, an Award granted under the Plan prior to the amendment and restatement of the Plan on April 5, 2021. | | DD. | Securities Act shall mean the Securities Act of 1933, as amended. | | EE. | Service shall mean the performance of services for the Corporation (or any Parent or Subsidiary) by a person in the capacity of an Employee, an Eligible Director or a Consultant, except to the extent otherwise specifically provided in the documents evidencing the Award made to such person. Service (as defined herein) shall include continued employment or service through any pre-termination notice period that is applicable to an Optionee or Participant serving in any of the foregoing capacities. For purposes of the Plan, an Optionee or Participant shall be deemed to cease Service immediately upon the occurrence of the either of the following events: (i) the Optionee or Participant no longer performs services in any of the foregoing capacities for the Corporation or any Parent or Subsidiary, provided that, for the avoidance of doubt, the performance of services shall include continued employment or service through the period of time occurring during any pre-termination notice period that is applicable to such Optionee or Participant or (ii) the entity for which the Optionee or Participant is performing such services ceases to remain a Parent or Subsidiary of the Corporation, even though the Optionee or Participant may subsequently continue to perform services for that entity. | | FF. | Shares shall mean shares of the Corporation’s Common Stock, par value $0.001 per share. | | GG. | Stock Exchange shall mean the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market or the New York Stock Exchange, or their successors. | | HH. | Stock Issuance Program shall mean the stock issuance program in effect under Article Three. | | II. | Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. | | JJ. | Successor shall mean, in the event of a Change in Control, the acquiring or succeeding entity (or an affiliate thereof). | | KK. | 10% Stockholder shall mean the owner of stock (as determined under Section 424(d) of the Code) possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary). | | LL. | Withholding Taxes shall mean the federal, state, local and non-U.S. income and employment taxes related to the issuance, exercise, vesting or settlement of the Award made to the Optionee or Participant under the Plan, in amounts determined by the Corporation in its discretion not to exceed the sum of all statutory maximum rates applicable in the Participant’s jurisdiction(s) (provided, in the case of a Participant who is an “officer” of the Corporation as defined in Rule 16a-1(f) promulgated pursuant to the 1934 Act, or any successor law (or any successor rule), that any withholding amount that exceeds the amount that is required to be withheld pursuant to the Withholding Taxes for such Participant is approved in advance by the Plan Administrator or the Board). |
APPENDIX C DIRECTIONS TO BROADCOM INC.
Our offices located at
1320 Ridder Park Drive, San Jose, California
1. Take Brokaw Road exit and turn right onto Brokaw Road and move into the left lane.
2. Turn left onto Ridder Park Drive.
3. Turn into the Broadcom campus, which is the second building on the right, at the main entrance sign.
| 1. | Take Brokaw Road exit and turn right onto Brokaw Road and move into the left lane. | | 2. | Turn left onto Ridder Park Drive. | | 3. | Turn into the Broadcom campus, which is the second building on the right, at the main entrance sign. |
Coming South on US-101: 1. Exit onto US-880 North.
2. Take Brokaw Road exit and turn right onto Brokaw Road and move into the left lane.
3. Turn left onto Ridder Park Drive.
4. Turn into the Broadcom campus, which is the second building on the right, at the main entrance sign.
| 1. | Exit onto US-880 North. | | 2. | Take Brokaw Road exit and turn right onto Brokaw Road and move into the left lane. | | 3. | Turn left onto Ridder Park Drive. | | 4. | Turn into the Broadcom campus, which is the second building on the right, at the main entrance sign. |
Coming South on I-880: | 1. | Take Brokaw Road exit and turn right onto Brokaw Road and move into the left lane. | | 2. | Turn left onto Ridder Park Drive. | | 3. | Turn into the Broadcom campus, which is the second building on the right, at the main entrance sign. |
1. Take Brokaw Road exit and turn right onto Brokaw Road and move into the left lane.Table of Contents 
3. Turn into the Broadcom campus, which is the second building on the right, at the main entrance sign.
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