Rumor: Cisco's $1.5M Babies

Who's the Cisco Systems Inc. (Nasdaq: CSCO) engineer who recently got a $1.5 million-a-year offer from Juniper Networks Inc. (NYSE: JNPR)?

More importantly, who are the other six who got similar offers?

And to top it off: What the heck kind of counter-offer made five of those seven engineers decide to stay at Cisco?

Now, we'll concede this point: It's possible our source got some signals crossed, and that the $1.5 million is the total amount offered to all seven engineers. That would average out to $214,000 each -- a nice sum, but not quite as eye-popping.

Either way, it sounds like Juniper CEO Kevin Johnson isn't kidding around. Router wars are alive and well.

— Craig Matsumoto, West Coast Editor, Light Reading

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opticalwatcher 12/5/2012 | 4:55:43 PM
re: Rumor: Cisco's $1.5M Babies

$1.5M hired a couple of genius engineers in one mature industry? That's crazy and just  attracting eye balls . In engineering, nobodyis irreplacable.

Hah! Spoken like an exec. No one would say it was crazy if $1.5Mil was used to poach an exec. In a high-tech industry like telecom I'd say it is more likely that the executives are replacable than the engineers.

Pete Baldwin 12/5/2012 | 4:39:29 PM
re: Rumor: Cisco's $1.5M Babies

agreed 100%.  I deliberated over this one before writing it up, because it does seem outlandish -- and yet, the top eschelon of IP routing expertise is still a rarified skill set.  The money would be worth it.

What's more important here, I think, is the idea that Juniper would do some aggressive poaching of these engineers.  The company's marketing has become louder, more vocal, since Kevin Johnson took over, and it would be in character for its hiring to take a sharper approach, too.

maxwell.smart 12/5/2012 | 4:39:29 PM
re: Rumor: Cisco's $1.5M Babies

Sounds outrageous but frankly good engineers are sometimes as valuable as, or more valuable than execs.


DCITDave 12/5/2012 | 4:39:27 PM
re: Rumor: Cisco's $1.5M Babies Cisco also seems like the kind of place that stockpiles talent, pays them well, and then sits on them to keep them off the market. All the great tech companies do when they get to be a certain size.
BigBro 12/5/2012 | 4:39:24 PM
re: Rumor: Cisco's $1.5M Babies

Are you sure it's $1.5M/year, or total, say over 4 years, including stock?

The latter doesn't sound too outrageous: call it a base salary of $200k/year, plus 25% bonus (gets you to $250k/year), plus options and RSUs. If the latter can be in the $150k/year ballpark (depending on your assumptions about JNPR stock), then you're at $400k/year, or $1.6M over 4 years.

It's on the high end, to be sure, but not totally outrageous.


$1.5M per year sounds more like they'd do it via a spin-in, not direct-hire.

Pete Baldwin 12/5/2012 | 4:39:23 PM
re: Rumor: Cisco's $1.5M Babies

That does sound more reasonable.  Good theory.

glasstotheass 12/5/2012 | 4:39:22 PM
re: Rumor: Cisco's $1.5M Babies Craig,

You should renormalize yourself to the Cisco compensation scheme. An above-average director-level manager or technical expert in a big BU can clear $500k on a good year (with bonus). Given that only a few people in the world have this skill set, you're really only talking a 3x multiple above the average technical expert.

Nice work if you can get it. :)

paolo.franzoi 12/5/2012 | 4:39:21 PM
re: Rumor: Cisco's $1.5M Babies


I don't disagree but for most large firms the largest shareholders (normally a majority but at least a large plurality) are investment firms.  They basically don't call for heads to roll.  They vote by moving their money.




Stevery 12/5/2012 | 4:39:21 PM
re: Rumor: Cisco's $1.5M Babies

Nobody is irreplaceable.  Least of all, execs.  Less than that, banking execs.  Less than that, BoDs.

The sooner shareholders demand boards and management return to sanity, the sooner corps become sane again.  We're going on 12-14 years and still the bubble stupidity has not been expunged.

paolo.franzoi 12/5/2012 | 4:39:20 PM
re: Rumor: Cisco's $1.5M Babies


I agree with you.

To me I look at the move to lots of personal investors with Internet Access and the number of "bubbles" that we have had - dot com, telecom/optics, real estate, oil at least.  It seems to me that people are really good at following the herd.

Let me use Zhone as an example.  It is 10% owned by institutions and 30% by insiders.  The chances of an external shareholder rebellion = 0.  And as it is, all I can see is it frittering away money over a nice long horizon.  Sycamore - 75% owned by insiders and institutions and all that it is happening is that it is slowly bleeding money.  Why other than gambling would anyone invest in these firms?



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