Cisco Doubles CEO’s Pay as Profits Soar

John_Keck

Limp Gawd
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Cisco Systems’ Chief Executive John Chambers recently saw his compensation jump from $9.2 million up to $18.9 million. The increase is a result of a massive rise in value of the stock and options awards, plus his cash bonus. Not too shabby.

The company's profits were up 79 percent year-over-year, and Chambers said then that Cisco's "strategy and vision is absolutely working. We are gaining market share and growing revenue."
 
Doubled. How many hard working Americans can say that. Especially during these tough times.
 
Meant to say "Show us why he isn't qualified."

News section really need an edit within 5 seconds for typos.
 
I guarantee he isn't so qualified that he deserves a doubling of his salary.

But... He has an MBA! (Indiana University, 1975)

He managed to almost double the company profits. I'd say that makes him qualified. As for his salary doubling? Good on 'em! He did a good job, he got a reward. I don't see the down side.

KillaChaos said:
Why does his profit double? Why not increase wages all over the company?
(Not that I expect it's true, but...) Who's to say that wages didn't increase? It's been my experience with major companies that the employee's raises are tied directly into company profit. If Cisco made 79% more profit this year, I could see them giving an extra 1-2% on the yearly raises for the employees.
 
Damn this misleading headline for being all over the web.

2008 pay: 17.1m
2009 pay: 9.2m
2010 pay: 18.9m

There's more to the story than they just doubled his pay. They halved the pay in 2009.

As long as they give similar performance based bonuses (we're talking percentages, not millions) down the line, this is no more idiotic than any other CEO's pay.
"The core of Cisco's executive compensation philosophy continues to be to pay for performance," a Cisco representative told the Journal.
Sound good to me! My company could use a dose of this.
 
Also, if a CEO doubles the profits / revenue of his company, resulting in hundreds of millions, if not billions of dollars of income, I don't think it is crazy to pay the guy millions dollars. Not just anyone has the focus to build this kind of company. The CEO is the quarterback.
 
I guarantee he isn't so qualified that he deserves a doubling of his salary.

As a performance for pay house, Cisco clearly believed he deserved doubling his salary for doubling their profits. What were their profits and what was the percentage of the doubling of the CEO's salary as a function of those profits? You'll see that it's probably pretty small. Merit has value especially in executive leadership. If you want to see that can't of money, then why don't you start becoming an executive too.
 
Cisco has had close to 15k layoffs since 2009. That takes real leadership, and only a qualified CEO that deserves millions for his leadership could make those kind of smart decisions.
 
Cisco has had close to 15k layoffs since 2009. That takes real leadership, and only a qualified CEO that deserves millions for his leadership could make those kind of smart decisions.
They cut the fat and started cranking, as it should be. Welcome to big business.
 
Cisco has had close to 15k layoffs since 2009. That takes real leadership, and only a qualified CEO that deserves millions for his leadership could make those kind of smart decisions.
Welcome to business. Layoffs suck, but guess what happens in a tough economy? You cut the dead weight.
 
Cisco has had close to 15k layoffs since 2009. That takes real leadership, and only a qualified CEO that deserves millions for his leadership could make those kind of smart decisions.

So if you were making the decisions you would have kept all those people and let the company lose money? And you would have said no to your compensation because, you know, you're a real leader? BS :rolleyes:

There's a point where adding more people give diminishing returns. They obviously reached that point long ago and needed to cut cost. That's business, that's life. He was able to earn the company more money now they might be able to hire some of those people back.
 
Cisco has had close to 15k layoffs since 2009. That takes real leadership, and only a qualified CEO that deserves millions for his leadership could make those kind of smart decisions.
Employees Salary per hour ($) Hours worked per week Total outgoing paychecks to employees per week
15,000 7.25 40 $4,350,000.00
15,000 8.00 40 $4,800,000.00
15,000 9.00 40 $5,400,000.00
15,000 10.00 40 $6,000,000.00
15,000 11.00 40 $6,600,000.00
15,000 12.00 40 $7,200,000.00
15,000 13.00 40 $7,800,000.00
15,000 14.00 40 $8,400,000.00
15,000 15.00 40 $9,000,000.00
15,000 16.00 40 $9,600,000.00
15,000 17.00 40 $10,200,000.00
15,000 18.00 40 $10,800,000.00
15,000 19.00 40 $11,400,000.00
15,000 20.00 40 $12,000,000.00

Could make a nice savings, hmm?
 
So if you were making the decisions you would have kept all those people and let the company lose money? And you would have said no to your compensation because, you know, you're a real leader? BS :rolleyes:

There's a point where adding more people give diminishing returns. They obviously reached that point long ago and needed to cut cost. That's business, that's life. He was able to earn the company more money now they might be able to hire some of those people back.

No its a obvious choice which is my point, it didn't take a genius to make that decision. People act like CEO's are God, and I will never understand why. I will never forget years ago the Home Depot CEO got a huge bonus, and he "earned" that by cutting the full time work force to save money.

It made a 40 hr employee into a 32hr employee. Thats all he did, and it saved them a lot of money. No one else could have made such a ground breaking decision.
 
No its a obvious choice which is my point, it didn't take a genius to make that decision. People act like CEO's are God, and I will never understand why. I will never forget years ago the Home Depot CEO got a huge bonus, and he "earned" that by cutting the full time work force to save money.

It made a 40 hr employee into a 32hr employee. Thats all he did, and it saved them a lot of money. No one else could have made such a ground breaking decision.

Right because that is all there is to be a CEO. Like CEO's don't plan a company's future, nor do they make decisions other than employee pay or hours. Yes, CEOs have no skills that enables them to make deals with suppliers and buyers that earn the company hundreds of millions of dollars. They have no idea which business to focus on and which non-performing ones to write-off. Yup, they do not have other skills except axe wielding for laying off employees. That's the only way they make their companies profits, by laying off their employees.
 
Actually I think this is a good method of compensation for executives who make decisions. Rather than an options situation where they can do something short sighted to push price up for a moment, exercise their options and then damn the consequences, make it a situation where profit = pay.

That was how it worked for my dad back when he was a VP at a company. He got paid a reasonable, but not all that large, salary and then got a percentage of the profits. As the company fared, so did his paycheck. Meant there was incentive to try and do things that would increase their business in the long term, since doing something that was good this year but bad the next would mean a small paycheck in the future.

For regular workers I don't think pay should depend so much on company performance since you don't have a lot of control over it. It should be a situation of "You do X work to get Y dollars." However higher up the chain, it should be more and more profit based. You earn your money only when the company earns money.
 
It's refreshing to see a CEO being rewarded for doing a good job compared to all the stories about CEOs getting raises and massive bonuses as the company comes close to collapsing or takes government bailout money.
 
He managed to almost double the company profits. I'd say that makes him qualified. As for his salary doubling? Good on 'em! He did a good job, he got a reward. I don't see the down side.

No, the company manged to almost double its profits. How much the CEO had to do with that is not known.
 
No, the company manged to almost double its profits. How much the CEO had to do with that is not known.

Exactly, the CEO can't double the profit all on his own. He can make some good decisions which should certainly be rewarded, but everyone down the chain has to do their job adequately as well. Granted, businesses should be able to do whatever they want to, but I don't personally understand why all the credit goes to the CEO when a company makes money.
 
Exactly, the CEO can't double the profit all on his own. He can make some good decisions which should certainly be rewarded, but everyone down the chain has to do their job adequately as well. Granted, businesses should be able to do whatever they want to, but I don't personally understand why all the credit goes to the CEO when a company makes money.

Because that's what a CEO is. They are the head of the company. You can't expect a news organization to go figure out what every executive involved did and who they were.
I'm sure other high ranking executive also go significant increases in compensation as well. You will just never here about that publicly.
 
More power too him, a lot of people are raging, about how they should employ more people or pay their employs more. What people aren't realizing, is this : 1. how many people are qualified to run major company's as a CEO? not many. 2. this raise was most likely a contractual agreement, and the perspective CEO usually writes the contract because the talent pool to fill the CEO position is very small, this is no different than the bonuses that many CEO's recived after Obama's failed bailouts, it's contractual! And had the companys not complied, they would have been liable to a law suit, or if the companys had not been bailed out and they really did "fail" the CEO's would have gotten their money when the company went into consolidation.

All that said is it excessive yeah, but you have to look at it for what it is rather than raging for the wrong reasons. Moreover this is an increase in "stock options" which isn't really the same as a check for nearly 20 million dollars. While most CEO's are valued at insane amounts of money through assets it's all numbers and thin air their actual disposable worth isn't much more than your average millionare .
 
Exactly, the CEO can't double the profit all on his own. He can make some good decisions which should certainly be rewarded, but everyone down the chain has to do their job adequately as well. Granted, businesses should be able to do whatever they want to, but I don't personally understand why all the credit goes to the CEO when a company makes money.

And it is the CEO's responsibility to hire and ensure those people perform adequately.

And here's another thing that shows to me that all of the people bitching are broke union workers - by doubling a public companies worth, he DID enrich the employees. Some of them massively. The vast majority of workers at Cisco own stock.
 
And it is the CEO's responsibility to hire and ensure those people perform adequately.

And here's another thing that shows to me that all of the people bitching are broke union workers - by doubling a public companies worth, he DID enrich the employees. Some of them massively. The vast majority of workers at Cisco own stock.

And to add to that, THAT is why he is worth the most. Joe Blow in accounting has 1/100th of the risk, responsibility, pressure, and exposure that the CEO has. If Joe Blow quits, nothing happens to the company. If Joe Blow makes a decimal mistake error, the next guy up the line catches it and nothing happens to the company.

When a CEO fucks up, that is not the case. Millions of dollars are lost, and thus millions of employees livelihoods are at risk as well. Just sleeping every night knowing thousands of people's livelihoods are riding on your performance is grounds enough for being the highest paid employee in the company.
 
John Chambers: Hi Honey, I'm home!

Mrs Chambers:
The servants have dinner waiting for you on the table.

John Chambers: Guess what, I got a pay raise!

Mrs Chambers:
Does that mean what I think it means?

John Chambers: Yep, we can finally afford that second Ferrari and 3rd Mansion we've been dreaming about.

Mrs Chambers: Oh honey, you got me so excited that I'd almost would rather bang you instead of the people boy.

That's not funny, because it's probably true.
 
When a CEO fucks up, that is not the case. Millions of dollars are lost, and thus millions of employees livelihoods are at risk as well. Just sleeping every night knowing thousands of people's livelihoods are riding on your performance is grounds enough for being the highest paid employee in the company.

When a CEO fucks? There are only two ways a CEO can fuck up. They either fuck a co-worker or take too much money from the company. That's not a hard thing not to do.

Oh, and when the CEO fucks up he can easily get another job, being a CEO. Everyone bellow him may not keep their jobs.
 
When a CEO fucks? There are only two ways a CEO can fuck up. They either fuck a co-worker or take too much money from the company. That's not a hard thing not to do.

Oh, and when the CEO fucks up he can easily get another job, being a CEO. Everyone bellow him may not keep their jobs.

You know how I know you're blue collar?

Because you have no idea about business.
 
Well if you read the story, he technically only got a 1.9% pay raise he's making less than $400k. All of these options and so forth that he's getting probably have a don't sell clause for a certain time frame just to make sure he doesn't screw things up. If he manages to keep the company's stock in good standing when he retires then he'll make out like a bandit (and probably find some way to skirt most of the taxes too!).

What's scary is this CEO of a large company (that actually makes money) isn't making much more than the chancellor of the college I work at, granted he gets all these stock options and such but still.
 
I agree with this guy

CEO's are not special, and they certainly do not deserve the wages they are getting. I don't think there's a person in the world worth 8 figures.

You realize that Stanley Bing is a multimillionaire that got rich by playing off of idiot's anti-executive sentiments, right?

It's amazing how you can be so anti executive by not throw up in your mouth when you hear Bing spout
Every time We the People begin to feel a little bit of confidence that Wall Street just might have learned something,
.

Hell, the man has homes in both downtown Manhattan and Mill Valley, California.

About the only thing Stanley Bing and "We the People" have in common is that they both shit and shave. In short, he's playing you for a fool. And profiting richly off of it.
 
Haha the morons are on parade today in the [H] forum. If everyone who bitches about CEO pay bitched 1/100th as much about government incompetence... well, you know the rest.
 
Haha the morons are on parade today in the [H] forum. If everyone who bitches about CEO pay bitched 1/100th as much about government incompetence... well, you know the rest.

Haha the corporate apologists are on parade today in the [H] forum. If everyone who bitched about people who bitch about CEO pay bitched 1/100th as much about government incompetence a few short years ago when their favored party was in power... well, you know the rest. ;)
 
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