A Look At Cisco Systems' (NASDAQ:CSCO) CEO Remuneration
This article will reflect on the compensation paid to Chuck Robbins who has served as CEO of Cisco Systems, Inc. (NASDAQ:CSCO) since 2015. This analysis will also assess whether Cisco Systems pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Cisco Systems
How Does Total Compensation For Chuck Robbins Compare With Other Companies In The Industry?
Our data indicates that Cisco Systems, Inc. has a market capitalization of US$188b, and total annual CEO compensation was reported as US$23m for the year to July 2020. We note that's a decrease of 10% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$5.4m. Accordingly, our analysis reveals that Cisco Systems, Inc. pays Chuck Robbins north of the industry median. What's more, Chuck Robbins holds US$12m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$1.4m | US$1.3m | 6% |
Other | US$22m | US$25m | 94% |
Total Compensation | US$23m | US$26m | 100% |
Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. Cisco Systems pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Cisco Systems, Inc.'s Growth Numbers
Cisco Systems, Inc.'s earnings per share (EPS) grew 8.4% per year over the last three years. Its revenue is down 7.5% over the previous year.
We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Cisco Systems, Inc. Been A Good Investment?
Cisco Systems, Inc. has served shareholders reasonably well, with a total return of 26% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
As we touched on above, Cisco Systems, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company lacks EPS growth, and returns to shareholders are less than stellar, over the last three years. Overall, although the company has delivered steady performance, we would like to see an improvement in key metrics before we can say the high CEO compensation is justified.
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Cisco Systems.
Switching gears from Cisco Systems, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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