Cisco Systems surprised some industry observers in August when, despite healthy hikes in revenue and profits the previous quarter, executives announced the company was cutting 4,000 jobs, or about 5 percent of its workforce.
During a conference call with analysts and journalists to discuss those financial numbers, CEO John Chambers said the networking giant needed to renew efforts to reduce costs and to focus on growth areas. And while the quarterly numbers were good, Chambers said, they weren’t as good as the company wanted.
“What we see is slow, steady improvement but not at the pace we want,” he said on the call, adding that some of the 4,000 employees who were laid off could be hired back by Cisco into new positions.
However, the numbers are working out well for Chambers. In a filing with the Securities and Exchange Commission (SEC) Sept. 30, Cisco reported that Chambers, who has been Cisco’s CEO since 1995, saw his compensation for the last fiscal year almost double, to $21.1 million, according to reports.
In the fiscal year that ended in July, his base salary jumped from $375,000—a number the company said was “historically low” when compared with other CEOs of major tech vendors, according to a Bloomberg report—to $1.1 million. In addition, Chambers also received a cash bonus of $4.7 million—an increase over the $3.95 million the year before—and restricted stock valued at $15.2 million. Last year, he received stock worth $7.35 million.
In all, his compensation in fiscal year 2012 was about $11.7 million.
The company cited financial numbers from its fiscal year 2013—including $48.6 billion in revenue and a 24 percent increase in net income, to $9.98 billion—which factored into the larger compensation package for Chambers, according to Bloomberg.
The future of the 64-year-old Chambers has been a topic of speculation in recent years. He has hinted he may retire as soon as next year, and in October 2012, the company promoted two executives—Gary Moore and Rob Lloyd—to president posts, moves that heightened speculation that they were in line to succeed Chambers when he retires.
In an interview with Bloomberg at the time, Chambers downplayed such speculation, but indicated they are part of the “first wave” of executives to be considered, noting that there are other strong candidates within Cisco.
“It’s not a two-horse race at all, and it’s not a race,” he told the news site. “We win as a team. Whoever the leaders will be at Cisco have to be very strong team players.”