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Dilutive management compensation practices claimed 68% of stock buybacks during Cisco's Q4'FY11
Sun, 9/4/11 - 6:59am    View comments

Year Dollar Amounts
of Cisco Stock
Buybacks
by Fiscal Year*
2011 $ 6.791 billion
2010 $ 7.803 billion
2009 $ 3.600 billion
2008 $10.350 billion
2007 $ 7.781 billion
2006 $ 8.295 billion
2005 $10.200 billion
2004$ 9.100 billion
2003 $ 6.000 billion
2002 $ 1.853 billion

Total $ 71.773 billion
    Cisco's Q4'FY11 Press Release filed with the U.S. Securities and Exchange Commission triumphantly stated:

"During the fourth quarter of fiscal 2011, Cisco repurchased 95 million shares of common stock under the stock repurchase program at an average price of $15.85 per share for an aggregate purchase price of $1.5 billion."

However, it appears to me that Cisco's restructuring announced at the beginning of Cisco's Q4'FY11 has turned into a financial windfall for Cisco CEO John Chambers and his management team.

How so?

Well, according to Cisco's Q4'FY11 Press Release and Cisco's Q3'FY11 Press Release filed with the U.S. Securities and Exchange Commission, the number of outstanding common shares at the end of Cisco's Q4'FY11 only declined by a mere -30 million shares (5,508 - 5,478 = 30) from the end of Cisco's Q3'FY11.

That means a whopping 65 million shares (i.e. 68%) of Cisco's Q4'FY11 95 million share buyback went to support the dilutive management compensation practices of Cisco CEO John Chambers.

*Source: U.S. Securities and Exchange Commission

    Cisco

Cisco's consolidated statements of operations for Q4'FY11 and Q3'FY11

Cisco Q4'FY11 Press Release
Source: U.S. Securities and Exchange Commission, Cisco's Q4'FY11 Press Release and Cisco's Q3'FY11 Press Release.

The Private Jet Owned by Cisco CEO John Chambers

Related stories:

Cisco CEO John Chambers ranked 10th in restricted stock grant compensation among the 350 biggest public company CEOs

Half of Cisco's stock buybacks went to support Cisco's dilutive management compensation practices during Q2'FY11

Cisco's management and employees appear to have pocketed $32 billion of Cisco shareholder cash
 


What's your take, do you think John Chambers and his management team deserve their financial windfall for guillotining thousands of Cisco's employees?

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