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Cisco CEO John Chambers Gets 22% Lower Compensation Of $16.5 Mln In 2014(dpa-AFX International Compact Via Acquire Media NewsEdge) SAN FRANCISCO (dpa-AFX) - Networking gear maker Cisco Systems, Inc. (CSCO) revealed that its Chairman and Chief Executive Officer John Chambers received a 2014 total compensation that was 21.6 percent lower than last year. The cut comes as he received lower performance-based compensation as the company failed to meet its profit and sales target in fiscal 2014. The San Jose, California-based company revealed this in a definitive proxy statement filed with the U.S. Securities and Exchange Commission on Tuesday. "Based on Cisco's performance at 95% of target during fiscal 2014, the incentive cash awards paid for fiscal 2014 to the named executive officers were on average 40% less than fiscal 2013 and at approximately the 70th percentile of the Peer Group," the company stated in the filing. Chambers, who has led Cisco for the past 19 years, received a total compensation of $16.5 million, including base salary, stock grants and incentives in 2012, compared to the significant $21.1 million he received last year, and the $11.7 million he got in 2012. The total compensation received by Chambers in 2014 includes $1.10 million as base salary, $12.9 million as stock grants, variable cash incentive of $2.50 million, and all other compensations totaling $0.011 million. Chambers' base salary remained unchanged from 2013, while stock awards dropped 15 percent and variable cash incentive plunged 47 percent from last year. Further, the filing shows a 16 percent drop in total 2014 compensation for Chief Financial Officer Frank Calderoni to $9.3 million from last year's $11.1 million. President and Chief Operating Officer Gary Moore's total 2014 compensation also declined 35 percent to $11.2 million from last year's $17.2 million. Robert Lloyd, president of development and sales, also saw his compensation drop 33 percent to $10.9 million. The compensation committee determines appropriate compensation for the CEO as well as other executive officers and makes a recommendation to the Board for their ratification. Chambers' base salary was set very low compared to other principal officers of the company until 2012 based on his long-standing request that a greater percentage of his total cash compensation be tied to Cisco performance. But, he then started to receive a three-fold increase in base salary from 2013 onwards. The Compensation Committee decided to discontinue setting Chambers' base salary at a relatively nominal amount and increased his historically low base salary closer to the median base salary of the other CEOs in the Updated Peer Group in 2013. The base salary for Chambers was fixed by the Compensation Committee at $1.10 million for 2013, compared to the meager $0.375 million in 2012. Chambers, aged 65, has served as a directors since November 1993 and as chairman since November 2006. He joined Cisco as senior vice president in January 1991, was promoted to executive vice president in June 1994 and to CEO in January 1995. Since his appointment as CEO, Cisco's annual revenue has grown to $47.1 billion in fiscal 2014 from the $2.0 billion in fiscal 1995. Chambers also served as president from January 1995 until November 2006. Before joining Cisco, he was employed by Wang Laboratories, Inc. for eight years, where he was most recently the senior vice president of U.S. Operations. According to media reports, Chambers has hinted on a succession plan and has earlier reportedly said that he could be stepping down as CEO sometime between 2014 and 2016, and could move over as chairman, provided the other directors approve the move. Moore and Lloyd, who were promoted as presidents in 2013, are seen as the two executives identified by Chambers as potential successors. Chambers is currently the longest serving CEO among those of major publicly-traded technology companies, after Microsoft Corp. (MSFT) CEO Steve Ballmer's retirement in February 2014 and Oracle Corp. (ORCL) Founder and CEO Larry Ellison stepping down about two weeks ago. CSCO closed Tuesday's regular trading session at $25.17, up $0.05 or 0.20% on a volume of 36.92 million shares. Copyright RTT News/dpa-AFX |