Top VMware Execs Score $42M In Total Pay Amid ‘Unprecedented’ Broadcom ‘Uncertainty,’ Board Says
‘(T)he Compensation Committee also took into consideration the (executives) leadership impact in achieving the Company’s operating plans and MBOs during a challenging period of unprecedented corporate uncertainty associated with the pendency of the Acquisition,’ VMware’s board writes in its proxy statement.
VMware’s top executives will take home a combined $42.4 million in total compensation this year as the team toiled last year against “unprecedented corporate uncertainty” brought about by the still-pending takeover by Broadcom.
“In holistically evaluating FY23 performance, the Compensation Committee also took into consideration the (named executive officers’) leadership impact in achieving the Company’s operating plans and MBOs during a challenging period of unprecedented corporate uncertainty associated with the pendency of the Acquisition,” VMware’s proxy filing from June 1 stated.
The company’s fiscal year ended in February.
Shareholders will have a chance to vote on compensation lined up for company officers on July 13, however the vote is symbolic and not binding. VMware shareholders already approved the company’s merger with Broadcom in a December vote.
As the board constructed its method for compensating CEO Raghu Raghuram, it offered him greater incentives around financial and operational performance, to the tune of a 150 percent salary bonus, an objective he met, the board said.
VMware’s goal was to see him increase sales in its subscription offerings. This was also one of the priorities mentioned by Broadcom CEO Hock Tan when he announced the takeover. VMware said it reached revenues of $13 billion last year, and did deliver more sales through subscription.
VMware’s board trumpeted the growth.
“We continued to make progress on our business model transition driven by our expanding subscription and SaaS portfolio, which resulted in FY23 subscription and SaaS annual recurring revenue growth of 30% year-over-year, totaling $4.66 billion,” the board wrote.
The company pending merger with Broadcom remains in the hands of global regulators, with the U.S. Federal Trade Commission, the UK’s Competition and Markets Authority and the European Union’s Economic Commission each involved in deep dive investigations of how the mega-deal may harm markets.
The deal has cleared governments in South Africa, Brazil, and Canada which reserves the right to apply conditions to the merger for up to a year after it closes. Reuters reported last week that the EU was expected to agree to the deal, but only with conditions in place. That report sent VMware’s stock price to a 52-week high.
If the deal does go through, Broadcom has offered VMware executives a combined $164 million should they decide to leave, as CRN previously reported.
Here are VMware’s top executive total compensation for the virtualization star’s 2023 fiscal year, as well as their expected haul under Broadcom’s “golden parachute” provisions should a merger between the two companies close. The compensation is a mix of both stock and cash.
Amy FIiegelman Olli
Title: Executive vice president and general counsel
Earned in 2023: $5.4 million
Total Since 2021: $23.8 million
Golden Parachute: $20.9 million
Fliegelman Olli was the only named executive officer to get a salary raise last year, with the compensation committee giving her a $50,000 bump when weighing what similarly situated legal officers made within the industry.
“In the case of Ms. Olli, the Compensation Committee considered market data and Ms. Olli’s performance,” VMware wrote in its proxy statement.
Additionally, Olli won praise for executing on work related to the pending acquisition of VMware by Broadcom, improving the company’s customer contracting and terms of service experience, increasing the number of patents VMware filed and improving the company’s risk management and compliance.
Tit’e: Executive vice president, worldwide sales
Earned in 2023: $5.8 million
Total Since 2022: $18.5 million
Golden Parachute: $23.9 million
The compensation committee heaped praise on its chief salesman for reaching his goals for bookings, ARR, and achieving a proper mix of subscription revenue inside key customer segments. Additionally, Brulard, led customer engagements to reach net promotor score goals and in quarter renewal rates.
Earned in 2023: $8.4 million
Total Since 2022: $26.4 million
Golden Parachute: $24.4 million
Dhawan’s task for 2023 involved keeping the company’s customer satisfaction and sentiment score high “during a period of unprecedented corporate uncertainty due to the pendency of the acquisition.”
The board said not only did he reach goals for customer acquisition and consumption across hyperscalers, cross-cloud services with large customers and with VMware Cloud by hyperscalers, he grew ARR across products.
Title: Chief financial officer
Earned in 2023: $9.6 million
Total Since 2021: $50.4 million
Golden Parachute: $47.7 million (Resigned prior to deal closing)
Rowe resigned in May, leaving board member and former AOL, Inc. CFO Karen Dykstra to replace him. Rowe received heaps of praise on his way out for his years of work in steering VMware’s financial performance. Particularly, the board was impressed that he pivoted more revenue to the recurring model without the decline that can happen when attempting to make the switch.
Rowe left to take a CFO job with Workday.
Earned in 2023: $13.2 million
Total Since 2021: $59.4 million
Golden Parachute: $52.5 million
The compensation committee offered Raghuram a salary bonus of 150-percent and he delivered, the company said.
He executed on operating plans to transform more of the company’s revenue from traditional licenses to the subscription based, Software-As-A-Service model, and did so “during a period of corporate uncertainty due to the pendency of the Acquisition” the board wrote.
Additionally, it said Raghuram “executed activities” that supported the acquisition, while the company reached goals for the consumption of cross-cloud services by its largest customers and with VMware Cloud by hyperscalers.
Raghuram increased the company’s net promoter score, and in-quarter renewal rates thanks to strong sales engagement.