Arm Holdings (ARM) is heading toward a contentious shareholder vote on September 9, with two major proxy advisory firms urging investors to reject a one-time award that could pay Chief Executive Officer Rene Haas as much as $800 million if the chip designer’s valuation reaches $2 trillion.

Institutional Shareholder Services and Glass Lewis have both recommended voting against the proposed Value Creation Plan, according to regulatory filings and media reports. The advisers argue the package is excessive and that such compensation structures remain rare in the UK market, where they can generate enormous payouts without proven benefits to corporate performance.

The award consists of 425,000 performance share units split into three tranches tied to Arm’s market capitalization. Haas would receive 25% of the shares if Arm reaches a $1 trillion valuation by March 31, 2029, a cumulative 50% if the company hits $1.5 trillion by March 31, 2030, and the full award if it reaches $2 trillion by March 31, 2031. At the final threshold, the shares would be worth roughly $1,880 each, producing the approximately $800 million maximum payout.

Arm will measure whether each target has been met using its average closing share price over any 60-day period before the relevant deadline. Missed interim milestones can roll forward, meaning shares tied to an earlier target can still vest if the company subsequently reaches a higher one. Each tranche vests two years after its milestone is achieved, with the final vesting date set for April 1, 2033, provided Haas remains employed.

The gap between Arm’s current valuation and the first milestone is substantial. The company’s market capitalization sits around $250 billion to $264 billion after its stock nearly halved from a June peak. Reaching the initial $1 trillion target would require roughly a fourfold increase, while the final goal implies more than eightfold growth from current levels.

MilestoneMarket Cap TargetDeadlineCumulative PSUs EarnedTranche 1$1 trillionMarch 31, 202925%Tranche 2$1.5 trillionMarch 31, 203050%Tranche 3$2 trillionMarch 31, 2031100%

Note: Vesting occurs two years after each milestone is achieved, with the final vesting date set for April 1, 2033, subject to continued employment.

Arm has defended the compensation structure, arguing that US-style pay is appropriate given the company’s Nasdaq listing, Haas’s residence in California, and the fact that many of its competitors for executive talent are American technology and semiconductor firms. The revised remuneration policy also raises the maximum achievement level on Haas’s regular performance share awards from 125% to 200%. He received $60.6 million in total remuneration during fiscal 2026.

The proxy advisers have also raised governance concerns. ISS recommended votes against the re-election of both Haas and Chairman Masayoshi Son, citing insufficient board independence. Haas has served on SoftBank’s board since 2023 and became part-time CEO of SoftBank Group International in April 2026, a role overseeing some of the Japanese conglomerate’s portfolio companies. Arm’s own annual filing acknowledges that the overlapping positions could create, or appear to create, conflicts of interest.

SoftBank beneficially owns approximately 86.4% of Arm, giving it control over most shareholder votes and substantial influence over board composition. Arm qualifies as a “controlled company” under Nasdaq rules and uses exemptions from certain governance requirements. That ownership structure makes rejection of the pay proposal unlikely without SoftBank’s support.

The size of the award reflects Arm’s strategic shift from licensing chip designs to selling its own AI-focused silicon. The company introduced its Arm AGI CPU in March 2026, marking a move into production chips aimed at AI infrastructure. Haas has projected that the AGI CPU business could generate $15 billion in annual revenue within five years, contributing to a company-wide target of $25 billion.

Valuation-linked CEO packages have become increasingly prominent in the US. Tesla shareholders approved a performance plan for Elon Musk in November 2025 that could ultimately be worth close to $1 trillion, with awards tied to market capitalization and operating milestones including an $8.5 trillion valuation target, 20 million vehicle deliveries, and $400 billion in annual adjusted profit. Against that backdrop, Haas’s potential payday appears relatively modest, though the proxy advisers’ objections suggest institutional investors remain wary of such outsized awards.