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Voting for Cisco shareholder proposal No. 5 will oust John Chambers as Cisco's Chairman

Cisco lead director, Carol Bartz, justified excessive Chairman and CEO pay of $190 million to Dick Grasso.

Hershey, PA:   Mon, 10/15/12 - 11:59pm    View comments

At 10:00 AM Pacific Time, Thursday, November 15, 2012, Cisco's long-suffering shareholders will finally be able to oust John Chambers as Cisco's Chairman by:

VOTING FOR

Cisco Shareholder Proposal 5 — Independent Board Chairman

"Shareholders request that our board of directors adopt a policy that, whenever possible, the chairman of our board of directors shall be an independent director. An independent director is a director who has not previously served as an executive officer of our Company.
 

"This policy should be implemented so as not to violate any contractual obligations in effect when this resolution is adopted. The policy should also specify how to select a new independent chairman if a current chairman ceases to be independent between annual shareholder meetings. To foster flexibility, this proposal gives the option of being phased in and implemented when our next CEO is chosen.

"When a CEO serves as our board chairman, this arrangement can hinder our board's ability to monitor our CEO's performance. Many companies already have an independent Chairman. An independent Chairman is the prevailing practice in the United Kingdom and many international markets. This proposal topic won 50%-plus support at four major U.S. companies in 2011.

"This proposal should also be evaluated in the context of our Company's overall corporate governance as reported in 2012:

"GMI Ratings, an independent research firm, rated our company for concern on executive pay with $12 million for our CEO John Chambers. Our two member executive pay committee included Roderick McGeary who was negatively flagged by GMI Ratings for board membership at BearingPoint, Inc. as it went bankrupt. Our Lead Director, Carol Bartz, was on the New York Stock Exchange board during the lavish-pay tenure of former CEO 'Dick' Grasso.

"John Hennessy was on our Nomination Committee although he received by far our highest negative votes — 8-times the negative votes received by some of our other directors. Richard Kovacevich, who received our second highest negative votes, was another member of our 3-person Nomination Committee.

"Two of our directors were inside related and three directors had long tenure of 12 to 19 years. Being inside related and having long tenure can negatively impact a director's independence at the expense of shareholders. Steven West had 16-years long tenure and nonetheless chaired our Audit Committee.

"Please encourage our board to respond positively to this proposal for an Independent Board Chairman — Proposal 5."

5-Year Cisco (CSCO) Stock Price vs. Dow Jones Industrial Average (DOW)

Source: Yahoo! Finance

Related documents:

Cisco Shareholder Proposal 5 — Independent Board Chairman

Cisco Board Committees

The Costs of a Combined Chair/CEO

Independent Chairmen Are Smart Investments

GMI Ratings Governance Issue | Cisco Systems, Inc.

Roderick McGeary, Chairman of Cisco's Compensation and Management Development Committee, was Chairman of BearingPoint as it filed for Chapter 11 Bankruptcy

Cisco lead director, Carol Bartz, justified excessive Chairman and CEO pay of $190 million to Dick Grasso
 

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