Advisory Firms Urge Shareholders to Reject Arm CEO Bonus

Shareholder advisory firms Institutional Shareholder Services and Glass Lewis have recommended that investors vote against a proposed value creation plan for Rene Haas, the CEO of Arm. The plan would grant Haas up to $800 million in shares if the semiconductor company's valuation reaches $1 trillion, with additional rewards tied to targets of $1.5 trillion and $2 trillion.

Both advisory firms characterized the bonus as excessive. Institutional Shareholder Services specifically noted that such plans are uncommon in the UK market and raise concerns regarding potentially large gains without proven efficacy in improving performance. In addition to the pay scheme, Institutional Shareholder Services recommended voting against the re-election of Haas and Chairman Masayoshi Son to the board, citing a lack of independent directors.

Shareholders are scheduled to vote on the pay package at the annual meeting on September 9. Despite the recommendations from the advisory firms, the plan is expected to pass because SoftBank Group owns 86% of Arm's shares.