Bonus #2 - Book Report/Review Example

John Chamber’s Compensation Package for Fiscal John Chambers is the Cisco Chairman and CEO. He has grown the company from 70 million dollars since he joined the company, to 1.2 billion dollars when he became CEO, to its present-day 40 billion dollars. In 2006, Chambers got appointed as Chairman of the Board.2011 was an unpleasant year for Cisco Systems. This is because the company reorganized its operations, closed the Flip videocam business and reduced job availability by 12,000. John Chamber’s gross income reduced by a third.

His total pay package reduced by 32% with a salary of 375,000 dollars. He did not receive a cash bonus though he received stock worth 12.5 million dollars. For fiscal 2011, the company’s compensation committee chose not to award its executive officers with cash motivations and stock units based on performances. Consequently, half of Chamber’s equity award of 12.5 million dollars got lost (Bingham et al,72). According to Ciscos 2011 proxy statement, although the company achieved performance goals, there was erosion of shareholder value.

As a result, the committee employed its negative option. No executive officer would receive cash incentive or performance-based equity awards in 2011. In perks, Chambers received 11,025 dollars that became ascribed to the 401(k) company match.Works CitedAlpheus Bingham, Dwayne Spradlin, Luke Williams, Michael Lord. Create Competitive Advantage with Innovation. New Jersey: FT Press, 2011. PrintWww.paywatch.org. 2011