Stockholders' Equity

12 Months Ended

Oct. 29, 2023

Stockholders’ Equity

Cash Dividends Declared and Paid


	Fiscal Year
	2023		2022		2021

	(In millions, except per share data)
Dividends per share to common stockholders	$	18.40	$	16.40	$	14.40
Dividends to common stockholders	$	7,645	$	6,733	$	5,913
Dividends per share to preferred stockholders	$	—	$	80.00	$	80.00
Dividends to preferred stockholders	$	—	$	299	$	299

On September 30, 2019, we completed an offering of approximately 4 million shares of Mandatory Convertible Preferred Stock, which generated net proceeds of approximately $3,679 million and would automatically convert into shares of our common stock on September 30, 2022.

The holders of Mandatory Convertible Preferred Stock were entitled to receive, when, as and if declared by our Board of Directors, or an authorized committee thereof, out of funds legally available for payment, cumulative dividends at the annual rate of 8.00% of the liquidation preference of $1,000 per share (equivalent to $80 annually per share), payable in cash or, subject to certain limitations, by delivery of shares of our common stock or any combination of cash and shares of our common stock, at our election.

During fiscal year 2022, outstanding shares of our Mandatory Convertible Preferred Stock converted into an aggregate of approximately 12 million shares of our common stock at conversion rates ranging between 3.0894 and 3.1149 common shares per share of Mandatory Convertible Preferred Stock. We paid cash in lieu of fractional shares of common stock upon conversion.

Stock Repurchase Programs

In December 2021, our Board of Directors authorized a stock repurchase program to repurchase up to $10 billion of our common stock from time to time through December 31, 2022, which was subsequently extended to December 31, 2023. In May 2022, our Board of Directors authorized another stock repurchase program to repurchase up to an additional $10 billion of our common stock from time to time through December 31, 2023. We repurchased and retired approximately 9 million and 12 million shares of our common stock for $5,824 million and $7,000 million under these stock repurchase programs during fiscal years 2023 and 2022, respectively.

Repurchases under our stock repurchase programs may be effected through a variety of methods, including open market or privately negotiated purchases. The timing and amount of shares repurchased will depend on the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors. We are not obligated to repurchase any specific amount of shares of common stock, and the stock repurchase programs may be suspended or terminated at any time.

Equity Incentive Award Plan

2012 Plan

In connection with the acquisition of BRCM, we assumed the BRCM 2012 Stock Incentive Plan (the “Original 2012 Plan”) and outstanding unvested RSUs originally granted by BRCM under the Original 2012 Plan that were held by continuing employees. During the second quarter of fiscal year 2021, our stockholders approved the amendment and restatement of the Original 2012 Plan, now called the Broadcom Inc. 2012 Stock Incentive Plan (the “Amended 2012 Plan”). Under the Amended 2012 Plan, we may grant stock options and stock appreciation rights with an exercise price that is no less than the fair market value on the date of grant, restricted stock awards, and RSUs to employees. No participant may be granted such awards for more than an aggregate of 4 million shares in any fiscal year. Equity awards granted under the Amended 2012 Plan generally vest over four years. The Amended 2012 Plan reduced the number of shares available for new equity award grants to 20 million shares and removed the annual share replenishment provision provided under the Original 2012 Plan. During the second quarter of fiscal year 2023, our stockholders approved the amendment and restatement of the Amended 2012 Plan to increase the number of shares of common stock authorized for issuance by 25 million shares. Awards cancelled or forfeited and shares withheld to satisfy tax withholding obligations become available for future issuance. As of October 29, 2023, 36 million shares remained available for issuance under the Amended 2012 Plan.

We may grant market-based RSUs with both a service condition and a market condition as part of our equity compensation programs. The market-based RSUs generally vest over four years, subject to satisfaction of market conditions. During fiscal years 2023, 2022 and 2021, we granted market-based RSUs under which grantees may receive the number of

shares ranging from 0% to 300% of the original grant at vesting based upon the total stockholder return (“TSR”) on our common stock on an absolute basis and as compared to the TSR of an index group of companies. During fiscal year 2023, we also granted market-based RSUs vesting over five years, subject to satisfaction of stock price performance milestones.

Employee Stock Purchase Plan

The ESPP provides eligible employees with the opportunity to acquire an ownership interest in us through periodic payroll deductions, based on a 6-month look-back period, at a price equal to the lesser of 85% of the fair market value of our common stock at either the beginning or the end of the relevant offering period. The ESPP is structured as a qualified employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986. However, the ESPP is not intended to be a qualified pension, profit sharing or stock bonus plan under Section 401(a) of the Internal Revenue Code of 1986 and is not subject to the provisions of the Employee Retirement Income Security Act of 1974.

Stock-Based Compensation Expense


	Fiscal Year
	2023		2022		2021

	(In millions)
Cost of products sold	$	88	$	65	$	78
Cost of subscriptions and services	122		82		65
Research and development	1,513		1,048		1,199
Selling, general and administrative	448		338		362
Total stock-based compensation expense	$	2,171	$	1,533	$	1,704

Estimated income tax benefits for stock-based compensation	$	367	$	255	$	283
Excess income tax benefits for stock-based awards exercised or released	$	507	$	375	$	310

We have assumed an annualized forfeiture rate for RSUs of 5%. We will recognize additional expense if actual forfeitures are lower than we estimated, and will recognize a benefit if actual forfeitures are higher than we estimated.

During the first quarter of fiscal year 2019, the Compensation Committee of our Board of Directors approved a broad-based program of multi-year equity grants of time- and market-based RSUs (the “Multi-Year Equity Awards”) in lieu of our annual employee equity awards historically granted on March 15 of each year. Each Multi-Year Equity Award vests on the same basis as four annual grants made March 15 of each year, beginning in fiscal year 2019, with successive four-year vesting periods. Stock-based compensation expense related to the Multi-Year Equity Awards was $596 million, $794 million and $816 million for fiscal years 2023, 2022 and 2021, respectively.

As of October 29, 2023, the total unrecognized compensation cost related to unvested stock-based awards was $6,375 million, which is expected to be recognized over the remaining weighted-average service period of 3.4 years.

The following table summarizes the weighted-average assumptions utilized to calculate the fair value of market-based awards granted in the periods presented:



	Fiscal Year
	2023		2022		2021
Risk-free interest rate	4.0	%	1.4	%	0.3	%
Dividend yield	3.3	%	2.7	%	3.0	%
Volatility	32.8	%	37.1	%	39.0	%
Expected term (in years)	4.8		3.4		3.4

The risk-free interest rate was derived from the average U.S. Treasury Strips rate, which approximated the rate in effect appropriate for the term at the time of grant.

The dividend yield was based on the historical and expected dividend payouts as of the respective award grant dates.

The volatility was based on our own historical stock price volatility over the period commensurate with the expected life of the awards and the implied volatility of a 180-day call option on our own common stock measured at a specific date.

The expected term was commensurate with the awards’ contractual terms.

Restricted Stock Unit Awards

A summary of time- and market-based RSU activity was as follows:


	Number of RSUs Outstanding	Weighted-Average Grant Date Fair Value Per Share

	(In millions, except per share data)
Balance as of November 1, 2020	32	$	188.35
Granted	2	$	408.69
Vested	(8)	$	214.15
Forfeited	(3)	$	189.84
Balance as of October 31, 2021	23	$	200.38
Granted	3	$	527.69
Vested	(7)	$	225.52
Forfeited	(1)	$	242.82
Balance as of October 30, 2022	18	$	238.49
Granted	12	$	519.78
Vested	(7)	$	262.48
Forfeited	(1)	$	307.91
Balance as of October 29, 2023	22	$	389.21

The aggregate fair value of time- and market-based RSUs that vested in fiscal years 2023, 2022 and 2021 was $5,423 million, $4,207 million and $3,715 million, respectively, which represented the market value of our common stock on the date that the RSUs vested. The number of RSUs vested included shares of common stock that we withheld for settlement of employees’ tax obligations due upon the vesting of RSUs.