8-KShareholder Matters

CISCO SYSTEMS, INC. 8-K Report, Shareholder Vote Results (Nov 19, 2010)

Filed November 19, 2010For Securities:CSCO

Summary

This Form 8-K reports on the outcomes of Cisco Systems, Inc.'s Annual Meeting of Shareholders held on November 18, 2010. The primary focus of the filing is the voting results on six key proposals put forth to the shareholders. All incumbent directors were overwhelmingly re-elected, indicating strong shareholder confidence in the current board's leadership. Furthermore, shareholders approved the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the upcoming fiscal year. However, a non-binding advisory vote on executive compensation did not receive majority support, with a significant portion of votes cast against it. Two shareholder proposals related to environmental sustainability and sales practices in China, as well as a proposal concerning human rights in business practices, were also voted down by a substantial margin, suggesting that shareholders favored the board's recommendations on these matters.

Key Highlights

  • 1All thirteen nominated directors for Cisco's Board of Directors were overwhelmingly re-elected with substantial 'For' votes.
  • 2Shareholders approved the appointment of PricewaterhouseCoopers LLP as Cisco's independent registered public accounting firm for fiscal year 2011.
  • 3A non-binding advisory resolution on executive compensation received a majority of 'Against' votes, indicating shareholder concern or dissatisfaction.
  • 4A shareholder proposal to amend Cisco's Bylaws to establish a Board Committee on Environmental Sustainability was largely rejected.
  • 5A shareholder proposal requesting a report on steps to reduce the likelihood of business practices enabling human rights violations was also largely rejected.
  • 6A shareholder proposal requesting a policy restricting certain sales in China and related disclosures received very low support and was overwhelmingly rejected.

Frequently Asked Questions

The Annual Meeting resulted in the re-election of all incumbent directors, the ratification of PricewaterhouseCoopers LLP as the independent auditor, and the voting down of three shareholder proposals concerning executive compensation, environmental sustainability, human rights, and sales practices in China. The advisory vote on executive compensation did not receive majority shareholder approval.

Broker Non-Votes represent shares held by brokers or nominees that did not receive voting instructions from the beneficial owners. These shares are not counted as 'For' or 'Against' votes for the purposes of determining whether a proposal has passed, particularly for matters where shareholder approval is required.

While advisory, the vote on executive compensation (often called 'Say-on-Pay') provides shareholders with a mechanism to express their views on the company's compensation policies for its top executives. A significant 'Against' vote can signal shareholder discontent and may prompt the board and management to review and potentially adjust their compensation practices.

The overwhelming rejection of these shareholder proposals suggests that the majority of voting shareholders either agreed with the Board of Directors' recommendations to vote against them or did not see the proposed actions as necessary or beneficial for the company at this time. It indicates that the board's perspective on these matters carried more weight with the shareholders than the proponents' arguments.