ARM is asking shareholders to approve a performance-based pay package for the CEO that could be worth up to $800 million if the company reaches a $2 trillion valuation. However, that plan has faced criticism ahead of the September 9 vote, according to reports. Proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis have urged shareholders to reject it. They’re calling the ARM CEO’s package “excessive.”
ARM CEO’s excessive pay package faces potential shareholder opposition
The pay package is a one-time Value Creation Plan (VCP) that gives ARM CEO Rene Haas 425,000 performance-based shares. The award will be divided across three market-cap milestones, as per regulatory filings. He gets 25% of the award if ARM reaches a $1 trillion valuation by March 31, 2029. A 50% if it reaches $1.5 trillion by March 31, 2030. Lastly, the full award if it reaches $2 trillion by March 31, 2031.
ARM will use its average share price over any 60 days before deadlines to decide if the targets are met. The shares also carry lengthy vesting periods. Awards associated with the $1 trillion, $1.5 trillion, and $2 trillion milestones vest on April 1st, 2031, 2032, and 2033, respectively. That’s as long as Haas remains with the company.
A missed interim milestone can reportedly roll forward. For instance, shares attached to an earlier target can remain available if ARM subsequently reaches a higher milestone. The maximum payout of around $800 million is based on the value of all 425,000 shares if ARM reaches a $2 trillion valuation. This would put the share price at roughly $1,880.
The $2 trillion valuation target
However, ISS has raised concerns about the size of the award and the use of VCP-style compensation plans in Britain. The advisory firm said such plans are still uncommon in the UK and could result in very large gains, while there is little evidence that they improve company performance.
Glass Lewis has also recommended that shareholders reject the proposal, calling Haas’s potential payout “excessive.” ARM currently has a market capitalization of around $264 billion, according to The Telegraph. This means it still has a long way to go before reaching the first $1 trillion target. The company’s servers currently capture over 45% of data center revenue.
ARM argues pay structure needs to be competitive
Meanwhile, ARM argues that its pay structure needs to be competitive with US technology companies. The company is listed on Nasdaq, Haas is based in California, and many of ARM’s competitors for top talent are US-based technology and semiconductor firms. ARM says the plan reflects US pay standards, the location of its competitors, its Nasdaq listing, and the location of its CEO. The revised remuneration policy also increases the maximum achievement level for Haas’s regular PSU awards from 125% to 200%, in addition to the separate VCP.
The shareholder advisers have also raised concerns about ARM’s corporate governance. ISS has recommended voting against the re-election of CEO Rene Haas and chairman Masayoshi Son, saying the board does not have enough independent members. ARM’s own filings show that SoftBank owned about 86.4% of the company as of May 21. This gives it control over most shareholder votes and significant influence over the board.
As a result, ARM qualifies as a “controlled company” under Nasdaq rules and therefore uses exemptions from some governance requirements that apply to companies without a controlling shareholder.
Close ties to SoftBank
Additionally, Haas’s close ties to SoftBank have added to these concerns. He joined SoftBank’s board in 2023 and was named CEO of SoftBank Group International in April 2026. That’s a part-time job where he oversees some of its portfolio companies. ARM has acknowledged that Haas’s and Son’s roles at both companies could create potential conflicts of interest.
SoftBank’s 86.4% stake also gives it enough voting power to determine the outcome of ARM’s ordinary shareholder resolutions in most situations. This makes rejection of the pay proposal unlikely without SoftBank’s support. ARM’s $2 trillion target comes as it looks to expand beyond licensing chip designs into making its own AI-focused chips. It launched the ARM AGI CPU in March 2026 and says the move could drive major growth over the next five years.
Large valuation-linked CEO pay packages are also gaining attention in the US. Tesla shareholders approved a package for Elon Musk in 2025 that could be worth nearly $1 trillion. That is, if the company hits certain targets, including hitting an $8.5 trillion valuation.
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