Cisco chairman and chief executive John Chambers has received a US$2 million (AU$2.34 million) windfall from the company for his efforts in the 2009 fiscal year, despite the networking giant’s net income falling by nearly a quarter year on year.
A new filing with the US Security and Exchange Commission (SEC) made yesterday reported that Chambers and several other executives at the firm were given “year-end discretionary incentive payments”.
The reason for the payments becomes a little clearer further down the filing report, which reveals that Cisco “did not satisfy its minimum pre-established financial performance goals” and so no execs were eligible for bonuses under the firm’s Executive Incentive Plan.
“In making these incentive payments, the [Compensation and Management Development] Committee considered the Company’s solid financial performance during a period of tough economic challenges, and each individual’s key role in driving operational excellence and strong profitability,” the filing states.
“These awards are significantly lower than the cash incentive payments to each individual for the Company’s 2008 fiscal year.”
Chambers is a well-respected industry figure and has been at the helm with great success at Cisco for many years, but the news may still anger many employees who have seen the firm undergoing significant cut backs recently.
The charismatic chief executive is already well along the way to achieving the long-term goal of reducing headcount by 2000, in an effort to cope with the effects of the recession.
In total, Chambers and the other executives, including chief financial officer Frank Calderoni and chief globalisation officer Wim Elfrink, received payouts of over US$5.5 million (AU$6.45 million).
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