Arm employees to receive $2.5 billion windfall from share offering

Arm CEO René Haas is expected to receive a $20 million cash bonus and an additional $20 million as a result. From listing Photo: David Paul Morris/Bloomberg

Employees at British semiconductor giant Arm are bracing for a $2.5bn (£2bn) windfall from the company's New York listing as lucrative share rewards are unlocked.

Employees hold millions of restricted shares, a reward that converts into shares over time, according to company documents.

This equates to an average compensation of over $400,000 for 5,963 Arm employees, although those figures include executives who each of which millions can be made, as well as former employees.

Arm, a Cambridge microchip company. this feature is present in 99% of the world's smartphones, as well as countless other devices listed on Nasdaq last week.

At a $70 billion valuation, this is likely to be the largest placement in two years, and it's already being seen. as a catalyst for a dying tech market.

Arm's listing document lists 38.7 million Restricted Shares (RSU) under various employee schemes that the company says it expects to pay in shares.< /p>

This amounts to 3 to 4% of Arm's existing shares, or about $2.50. billion at a valuation of $70 billion. Many shares will be subject to a 180-day lock-up period, preventing employees from selling them for several months after the offering.

This year, Arm paid employees about $298 million in cash in connection with previous share purchase.

Employees were expected to receive $1.5 billion from a $40 billion takeover of Silicon Valley microchip maker Nvidia announced in 2020.

The company pulled out of the deal last year under pressure from regulators, forcing Arm to go public. Nearly half of Arm's 5,963 employees are based in the UK. The numbers have fallen after the company laid off 436 employees last year.

Employees who have lost their jobs have been offered the opportunity to keep their shares or receive a cash payment at a price that is likely to be significantly lower than the company's offering price.

Rene Haas, CEO Arm, will receive $20 million in cash and another $20 million in shares from the offering, while the other two executives will receive a total of $35 million.

Last week Japanese Arm owner SoftBank bought 25 The percentage of Arm that he did not yet own is held by a separate SoftBank Vision Fund at a price that gives Arm a $64 billion valuation.

The bankers are expected to hold investor roadshows over the next few years. weeks, and the cost of accommodation will be confirmed next month.