Oct. 1 (Bloomberg) -- Cisco Systems Inc. Chief Executive Officer John Chambers received $21.1 million in compensation for the company’s latest fiscal year, almost twice the amount from the previous period.
Chambers, 64, saw his base salary raised to $1.1 million for the year ending in July, from $375,000, according to a filing yesterday with the U.S. Securities and Exchange Commission. His previous salary was “historically low,” and the increase brings his compensation in line with peers, the company said.
While Cisco’s global reach and new products are helping to bolster results, the world’s biggest maker of computer-networking equipment is eliminating jobs as profit margins come under pressure from lower-cost rivals, as well as an expansion into less-profitable business such as servers. Cisco climbed 62 percent during its latest fiscal year, making it the sixth best-performing stock in the 67-member Standard & Poor’s 500 Information Technology Sector Index during that period.
Chambers received a $4.7 million cash bonus, up from $3.95 million, and restricted stock valued at $15.2 million, versus $7.35 million in fiscal 2012, according to the filing. Chambers’s package was $11.7 million in the previous period.
Cisco’s $48.6 billion in revenue and other financial metrics for the latest fiscal year exceeded the company’s targets, boosting the amount of the awards, the company said. Net income rose 24 percent to $9.98 billion in the latest fiscal year, which ended July 27.
Chambers, who has been CEO of the San Jose, California-based company since 1995, indicated in an interview with Bloomberg News last year that he may retire as soon as 2014.
He identified as possible successors Robert Lloyd, executive vice president of worldwide operations; Gary Moore, chief operating officer; and as many as eight others who are among a list that directors review quarterly.
The company’s turnaround effort is under pressure amid weaker sales outside the U.S. amid a global economic downturn and heightened rivalry from Juniper Networks Inc., Huawei Technologies Co. and Hewlett-Packard Co. Cisco announced plans in August to cut 4,000 jobs, or 5 percent of its workforce.
With the new cuts, Cisco will have eliminated 12,300 jobs over the past two years as it has exited consumer businesses and focused more on technology services and corporate software. Cisco agreed in July to buy security software maker Sourcefire Inc. for $2.7 billion, stepping up competition with Palo Alto Networks Inc. and Fortinet Inc.
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