The world's leading chip maker Nvidia has implemented a new variable compensation plan for its Chief Executive Officer Jensen Huang for the financial year 2027. According to a regulatory filing released by the company on Friday, a target cash bonus of $4 million has been fixed for Huang in this plan. This new plan was approved by the compensation committee of the company on March 2. Under this, the cash bonus received by the top executives of the company will be directly linked to the financial performance of the company. That is, the size of the bonus received by the officers will depend on whether the company is able to achieve the decided revenue targets or not.

Bonus will be linked to revenue target

According to the company, this bonus will be based on the performance of the financial year which will end on January 31, 2027. If the company achieves the set revenue target, the executives will receive the full bonus. At the same time, if performance is less than the target, the bonus may be reduced. In fact, in view of the rapidly changing environment in the tech industry and the increasing demand for technologies related to Artificial Intelligence (AI), companies are linking the salary structure of their top executives to performance. Nvidia also wants to encourage its leadership under this strategy.

Total salary in 2025 will be $49.9 million

According to the company's previous filing, Jensen Huang's total pay package in 2025 was around $49.9 million. The largest share in this was of share awards, whose value was estimated at around $38.8 million. This shows that the company also offers attractive stock-based incentives to its top leadership, keeping their interests aligned with the long-term growth of the company.

Confidence increased due to better quarterly results

Last month, Nvidia released its January quarter results, which were better than market expectations. The company has also estimated revenue higher than Wall Street's estimates for the current quarter. Nvidia believes that big tech companies will continue to invest heavily in Artificial Intelligence processors in the coming times. For this reason the company expects rapid growth in business. The company estimates that its sales in the first quarter of the current financial year may be around $ 78 billion, in which there is a possibility of up-and-down by about 2 percent.