Cisco CEO's pay falls 32%
- 17 August, 2012 12:38
CEO John Chambers received compensation valued at $12.9 million in Cisco's 2011 fiscal year, a period when the company restructured operations, shuttered its Flip videocam business and eliminated more than 12,000 jobs. His total pay package is down 32% compared to 2010, when Chambers received $18.9 million, according to documents filed this week with the U.S. Securities and Exchange Commission.
Chambers was paid a $375,000 salary, a decrease of roughly 2% from $382,212 in 2010. He didn't receive a performance-based cash bonus. In 2010, his bonus was $4.6 million.
Chambers' 2011 pay package also includes stock awards valued at $12.5 million. As reported to the SEC, Chambers' total equity awards are down 10% compared to 2010, when he received awards valued at $13.9 million.
Half of Chambers' $12.5 million equity award was forfeited, however, when Cisco's compensation committee decided not to award its highest executive officers with cash incentives or performance-based stock units for fiscal 2011. As explained in Cisco's proxy statement:
"Although Cisco substantially achieved its target operational performance goals for its cash incentive and its performance-based equity incentive awards, shareholder value eroded in fiscal 2011. Consequently, the Compensation Committee exercised its negative discretion and determined that no named executive officer would receive a cash incentive award or a performance-based equity award for fiscal 2011."
Chambers also received a modest $11,025 in perks and other compensation, which was attributed to a 401(k) company match.
The company, meanwhile, grew sales but saw net income drop in its 2011 fiscal year ended July 30. Revenue came in at $43.2 billion, a gain of nearly 8% compared to $40 billion in 2010. Net income totaled $6.5 billion, which is down 16% from $7.8 billion in the prior year. On a per-share basis, Cisco earned $1.17 per share in 2011, compared to $1.33 per share in the prior year.
Chambers' total pay is calculated using data supplied in a proxy statement filed with the SEC on Oct. 18. The following figures are taken from the summary compensation table: salary, stock awards, option awards, non-equity incentive place compensation (performance-based cash bonus), and all other compensation. The estimated value of equity awards represents the grant date fair value for stock awards and stock options granted during the fiscal year.
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