UPDATE: Cisco Shareholders Approve Say-On-Pay Proposal
(Updates with comments from activist shareholder and background.)
By Roger Cheng
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Cisco Systems Inc. (CSCO) shareholders narrowly
approved a "say-on-pay" resolution giving them more of a voice on executive
compensation, according to the fund that issued the proposal.
The San Jose networking titan is the latest company to get swept up by the
heightened levels of public scrutiny over pay among the highest ranks of the
corporate world. Goldman Sachs Group Inc. (GS) continues to take criticism for
its lucrative bonuses. Among a number of companies, Apple Inc. (AAPL) and
Microsoft Corp. (MSFT) shareholders approved similar resolutions earlier this
year.
The "say-on-pay" plan will allow shareholders to cast a non-binding vote on
the company's compensation of senior executives every three years.
The proposal was put forth by activist shareholder Christian Brothers
Investment Services on Thursday during the company's annual shareholder meeting.
The vote was initially declared too close to call, so the announcement was
delayed until Friday.
"This majority vote by Cisco's shareholders sends a clear message. The onus is
now on Cisco to take a leadership stance and enact Say on Pay before federal
legislation mandates such policies for all public corporations," said Julie
Tanner, assistant director of socially responsible investing at CBIS.
Tanner criticized Cisco's executive pay, which come during tough times that
have hit the company. In the fiscal first quarter, Cisco posted a 19% drop in
profit and a 13% revenue decline. Over the past year, the company cut roughly 2,
000 workers in an effort to contain costs.
It's the second attempt by CBIS, which put forth the proposal two years ago,
but was narrowly defeated. Tanner said she went with the second attempt after
failing to make any progress on talks with the company.
CBIS owns 800,000 shares of Cisco, and has held the stock for the past five
years.
Cisco was not immediately available for comment.
Cisco shares rose 0.7% to $23.57.
-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com
(END) Dow Jones Newswires
11-13-091138ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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