back to article ARM's top brass land £54m Softbank windfall

Top execs at ARM are facing a £54m stock payout after Japan giant Softbank swooped to scoop up the Brit-tech success. Chief executive Simon Segars will land £11.36m, chief technology officer Mike Muller £21m and chief executive since September 2011 Chris Kennedy will net £344,352. The figures, revealed in new ARM SEC filings …

  1. Anonymous Coward
    Anonymous Coward

    Wow.

    I wonder if the sale will change the company?

    1. kmac499

      Re: Wow.

      Depends on how softbank behave. With luck they will take the Warren (Sage of Omaha) Buffets style. Buy a company whose business you understand; that is fairly well run, and leave it pretty much as is, planning for a long term relationship.

      A lot will depend on the people Softbank borrowed the money from, and how hard they push for a return.

    2. Daggerchild Silver badge

      Re: Wow.

      I'm gloomy. ARM are a tech company yes, but they're also a novel tech *strategy*. One that benefit from polite neutrality in the cutthroat Asian tech market (selling high quality custom weapons to all sides).

      And now they may be *perceived* as partisan, regardless of whether they are or not. And if there's anything new higherups like doing, it's 'improving' a company strategy.

    3. Charlie Clark Silver badge

      Re: Wow.

      Almost certainly: the deal is debt-funded and Softbank is already heavily leveraged. There will be some restrictions on when people will fully be able to cash in but when they do, you can expect those who can afford it to leave "to take on new challenges".

      At the minimum there will be financial restructuring to increase the cashflow. But, depending on how things go, the pressure to do things like selling and leasing back the patents might become irresistible. As for more money for new projects: don't hold your breath.

      1. Anonymous Coward
        Anonymous Coward

        Re: Wow.

        "the deal is debt-funded and Softbank is already heavily leveraged."

        Indeed.

        18 Jul: "Softbank has no immediate plans to issue debt to fund ARM deal"

        from e.g.

        http://www.reuters.com/article/arm-holdings-ma-softbank-group-idUSL8N1A42YV

        2 Aug: Japan's SoftBank says it may issue $9.8 billion in hybrid bonds

        from

        http://www.reuters.com/article/us-softbank-group-corporatebonds-idUSKCN10D0LV?il=0

        But the bond issue is nothing to do with the ARM deal. Oh no. Did pantomime season start early this year, I know it's already Christmas at Sellfridges?

        Still, if Carol Vorderman of Ocean Finance adverts fame thinks its OK for already-indebted people to borrow yet more money to "pay off" their debts, I guess it's perhaps OK for companies too.

  2. Dwarf

    Mighty Oaks

    From little acorns grew.

    I hope that Softbank doesn't play with the company. ARM is a great technology.

  3. Tessier-Ashpool

    A bit paltry

    To tell the truth, these sums seem a bit miserly for such a successful and important company. £11m would barely buy you a decent house on a posh London street.

    1. paulf
      Holmes

      Re: A bit paltry

      If you think £11m is "A bit paltry" I'd love to have some of what you're smoking as it's more than I can hope to earn in my lifetime of being an Engineer. Maybe you think £11m is pin money but I could retire immediately with no money worries ever again on that kind of cash (and I'm sure I'd survive without a posh London pad).

      I assume you refer to this "Chief executive Simon Segars will land £11.36m...". Simon Segars has been CEO of ARM for just over three years so £11m in what I assume is long term shares isn't that bad considering he could have got through those three years as CEO just by coasting on the successes of the pipeline established under the previous incumbent (although I'm not suggesting he's done this).

      ARM's profits always seemed a bit low compared to its importance - in 2015 their revenue:net income margin was 35% - but it's worth remembering it's only one link in the chain. Others have to take the IP, customise it, turn it into a SoC, get that SoC working, then then sell it for use in products which in turn have to be sold to end users.

      1. BebopWeBop
        Meh

        Re: A bit paltry

        Your last point raises one of the potential hazards for ARM as their new owner tries to take out value. New management might believe they can get more values by integrating their supply chain - customisation and SoC development in the first instance. Favoured status (far more than currently happens for their very large customers) might well weaken the company in the light of perceived competition for others making a living at other points in the journey from design to device. Too early to tell, but the doubled workforce (if it happens) will have to be doing something to justify their salaries.

  4. MAF
    Flame

    Bah! Politicians....

    "Softbank’s purchase was quickly seized upon by the new government as signifying the continued strength of and international belief in the British economy as concerns loomed over post-Brexit growth."

    Only if you consider that selling the household silver demonstrates a belief in the strength of a household's economy :-(

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