The chief executive of Arm is in line for a pay package that would make him a billionaire if he hits targets to turn the microchip firm into the UK’s first trillion-dollar company.

Arm, which is listed in New York but retains its global headquarters in Cambridge, has proposed a pay scheme for Rene Haas in which he will receive generous annual share awards plus a maximum bonus of $800m if he can hit certain “exceptional growth metrics”.

The payout would be one of the biggest ever awarded by a British company.

Under the terms of the proposed bonus, or “value creation plan”, Haas, 63, will be awarded 425,000 shares if he can hit market value targets of $1tn (£743bn) by 2029, $1.25tn the following year and £2tn by the end of March 2031.

Arm said the potential $800m compensation package for Haas, who joined the company in 2013 and was promoted to chief executive in 2022, appropriately reflected “the significant value creation required by market capitalisation milestones”.

The company also sweetened other elements of his remuneration, which topped $60m in the year to the end of March, including upping his annual award of shares from a maximum of 125% to 200% of salary depending on performance.

Shareholders are to vote on the updated remuneration policy at Arm’s annual meeting, which is usually held in September.

Assuming the policy is approved and the targets are hit, Haas is in line to make well over $1bn in total by 2031.

“The company’s approach to executive remuneration is intended to enable Arm to attract and retain the highest calibre talent from the global technology industry,” Arm said in a filing to the US Securities and Exchange Commission.

“The remuneration committee has developed the chief executive officer package to be competitive with US standards reflecting the location of our key competitors for executive and other talent, the listing … on Nasdaq and the US-location of our chief executive officer,” it added.

Haas, who lives in California, was recently also named as chief executive of SoftBank’s international business.

Arm, which employs 6,500 staff, including 3,000 in the UK, has about 500 users of its chip designs worldwide, including Apple, Samsung, Qualcomm and Nvidia.

However, it recently said it also planned to start manufacturing its own chips, ending three decades in which it focused only on licensing its designs to other companies.

Haas, who is pushing Arm from its core strategy of providing architecture for microchips in smartphones into developing semiconductors for AI datacentres, has predicted that this change of tack could increase the company’s revenues fivefold.

Arm was founded in 1990 and was listed on the London Stock Exchange for 18 years before being acquired by Japan’s SoftBank for $32bn in 2016.

The deal attracted criticism that the UK was selling its most valuable tech company to foreign investors. Hermann Hauser, who helped to launch Arm, said it was a “sad day for technology in the UK”.

California-based Nvidia subsequently attempted to buy Arm but the deal collapsed in 2022 because of regulatory hurdles.

SoftBank then moved to its alternative plan to float the company on the Nasdaq market, where its valuation has soared to $367bn, with the Japanese company controlling 86% of Arm.

That is well above the market value of any UK-listed company, with HSBC worth £239bn and AstraZeneca £214bn.

In September, Tesla agreed a pay deal that could lead to Elon Musk, the electric carmaker’s chief executive and largest shareholder, becoming the world’s first trillionaire if he increased its $1tn market value to $8.5tn over 10 years.

The eye-watering market capitalisation-based pay schemes increasingly being offered by US companies dwarf the level of rewards at UK businesses.

Sir Martin Sorrell, the founder of WPP, frequently sparked investor anger because of the hundreds of millions he made while running the marketing services group.

In 2015, he took home £70.4m in cash and shares in one of the biggest pay deals in UK corporate history.

More recently, Peter Dilnot, the chief executive of the aerospace company Melrose Industries, earned £45.5m in annual pay and awards in 2024, according to the High Pay Centre.

Arm declined to comment.