Cisco CEO Chambers gets $12.3M 2008 pay package
Saturday, 27 September 2008


AP, NEW YORK -- Not unlike judges at Olympic gymnastic events, the board of Cisco Systems Inc. assigns numerical grades to the performance of the company's executives. Chief Executive John Chambers score for the last fiscal year was a 1.28, on a scale of 0 to 2.
 
The score reflects the board's belief that Chambers ''performed well in a challenging environment,'' according to a filing by the company Thursday.
 
The ''personal performance'' score is part of company's formula for executive compensation, and resulted in a $3 million bonus for Chambers in the fiscal year that ended July 25.
 
In total, Chambers' pay for the fiscal year was $12.3 million, a decrease of 3.7 percent from the year before.
 
Most of his pay was in the form of 900,000 stock options worth $8.9 million when they were granted in September 2007. However, with an exercise price of $32.21, the options are currently ''under water.'' Cisco shares closed Thursday at $23.48.
 
Cisco's stock fell 25 percent during the fiscal year, as the economic downturn in the U.S. has reined in growing spending on networking gear by corporations.
 
The company still earned $8.1 billion, or $1.31 per share, on sales of $39.5 billion. In the previous fiscal year, net income was $7.3 billion on revenue of $34.9 billion.
 
The Associated Press calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
 
The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.
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