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October 1, 2014

Cisco’s CEO takes 22% pay cut to $16.5m

The networking firm fails to meet internal targets.

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John Chambers, the high profile CEO of Cisco, had his pay packet reduced by $4.5m for the latest fiscal year after the networking firm said its full-year results did not meet internal targets.

Chamber’s total salary was cut by 22% to $16.5m for the fiscal year ending in July compared to the $21m he earned last year, according to documents filed with the U.S. Securities and Exchange Commission

His bonus was also cut from $4.7m to $2.5m during the same period, while stock awards fell to $12.9m from $15.2m, but his base salary remained the same at $1.1m

"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," Cisco said in the filing.

For its full fiscal year, Cisco’s revenue came in at $47.1bn, down 3% from 2013 and the first decline in five years, with net income remaining flat at $10.9bn.

Cisco, which this week pumped $1bn into its Intercloud ecosystem, said it will cut as many as 6,000 jobs, which is 8% of its global workforce, over the next 12 months.

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Although Chambers gave no timeline for the job cuts, he said almost all of the savings would be redirected in new areas such as Cisco’s datacentre, cloud and security businesses.

The filing also revealed a 16% drop in total compensation for CFO Frank Calderoni to $9.3m from last year’s $11.1m, while COO Gary Moore’s total compensation declined 35% to $11.2m.

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