Applied Materials execs in line for a bumper pay day

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More details have emerged of the planned merger between semiconductor giants Applied Materials and Tokyo Electron, with executives from the Silicon Valley firm set to benefit from considerable windfalls.

In a submission to the U.S. Securities and Exchange Commission (SEC) last week, Applied Materials, which makes equipment used in the manufacturing of solar panels, revealed details of the share awards and retention bonuses which several of its executives can anticipate as a result of the deal.

The submission also tacitly acknowledged the merger of the two firms into a US$29 billion semiconductor group to dwarf competitors could face anti trust hurdles that will make the ‘merger’ – in reality an acquisition of the Japanese firm by its Californian counterpart – a drawn-out affair.

Retention bonus of 352% base salary

The SEC submission justified the award of retention bonuses of 352.5% of base salary to Applied’s Silicon Systems Group general manager Randhir Thakur, senior vice president and chief financial officer Robert Halliday and ‘certain other members of Applied’s senior management team’ by citing the need to retain executives because ‘the pre-closing transaction (of the Tokyo Electron acquisition) period is likely to last at least several months.’

The retention bonuses would be awarded on either March 31, 2015 or six months after the deal is completed, whichever is earlier.

Applied Materials’ human resources and compensation committee also approved the vesting of outstanding performance-linked share awards for Thakur and Halliday as well as CEO Gary Dickerson and executive chairman of the board of directors Michael Splinter.

The awards will vest either three days before the closing of the deal or at any point the deal is terminated provided the recipients are still working for Applied or the new company.

Dickerson and Splinter are not eligible for the retention bonuses.