Compensation Philosophy and Objectives
Cisco operates in the extremely competitive and rapidly changing high-technology industry. The Board's Compensation Committee believes that the compensation programs for the executive officers should be designed to attract, motivate, and retain talented executives responsible for the success of Cisco and should be determined within a framework based on the achievement of designated financial targets, individual contribution, customer satisfaction, and financial performance relative to that of Cisco's competitors. Within this overall philosophy, the Compensation Committee's objectives are to:
- Offer a total compensation program that is flexible and takes into consideration the compensation practices of a group of specifically identified peer companies and other selected companies with which Cisco competes for executive talent
- Provide annual variable cash incentive awards that take into account Cisco's overall financial performance in terms of designated corporate objectives, as well as individual contributions and a measure of customer satisfaction
- Align the financial interests of executive officers with those of shareholders by providing appropriate long-term, equity-based incentives
Compensation Components and Process
The three major components of Cisco's executive officer compensation are:
- Base salary
- Variable cash incentive awards
- Long-term, equity-based incentive awards
A summary of executive compensation
is reported annually in our proxy statement.
