CISCO SYSTEMS, INC. CSCO

33% shingled-prose overlap between the two filings.

2024: 89,616 chars · 2025: 83,757 chars

• Committee Report:45% overlap (1,285 → 2,416 chars)
• Pay Ratio (Item 402(u)):2% overlap (2,398 → 60,000 chars)
• Say-on-Pay proposal:6% overlap (3,842 → 25,000 chars)

• changedCisco’s named executive officers for fiscal 2025 2024are our CEO, our Chief Financial Officer (“CFO”), our three most highly compensated executive officers (other than the CEO and CFO) who were serving as executive officers at the end of fiscal 2025, 2024,and one twoformer executive officer officerswho was werenot serving as an executive officer officersat the end of fiscal 2025. 2024.
• changed​​​​​​​​​​​Charles H.
• newRobbins Chair and Chief ExecutiveOfficerR.
• newScott Herren Former Executive Vice President and Chief Financial OfficerJeetendra (Jeetu) PatelPresident and Chief Product OfficerDeborah (Dev) L.
• newStahlkopf Executive Vice President and Chief Legal OfficerThimaya SubaiyaExecutive Vice President, OperationsGary Steele Former President,Go-to-Market
• changedThe following are performance and compensation highlights for fiscal 2025. 2024.
• newIn fiscal 2025, we delivered strong revenue growth across all geographies demonstrating robust demand for our technologies.
• newOur results for fiscal 2025 include a full year of Splunk's results compared to approximately four months for fiscal 2024.
• newRevenue was $56.7 billion, up 5% year over year.
• newRPO grew 6% year over year to $43.5 billion, providing a strong foundation for our future performance.
• newTotal subscription revenue increased 15% to $31.5 billion, accounting for 56% of total revenue, reflecting the strength of our software and services and helping to fuel our strong profitability.
• newThe profitable growth of our business continues to produce strong cash flows, enabling us to return significant value to shareholders.
• newIn fiscal 2025, we returned a total of $12.4 billion through dividends and share repurchases, representing 94% of our free cash flow(1).
• newWe remain focused on making strategic investments in innovation, driving durable, profitable growth, and delivering stockholder value.
• newOur fiscal 2025 results compared with fiscal 2024 were as follows (all comparisons year over year):
• newlRevenue of $56.7 billion, up 5% lProfit Before Taxes(1) of $18.6 billion, flat lOperating Income(1) of $19.5 billion, up 6%lProduct ARR(2) of $17.0 billion, up 8%
• new(1)Represents a non-GAAP financial measure.
• newSee the Appendix for a definition of this measure and a reconciliation of this measure to its most directly comparable GAAP financial measure.
• newIn the case of Profit Before Taxes and Operating Income, the measure is calculated differently than the same term used under our annual cash and long-term, equity-based incentive programs, as applicable.
• newSuch adjustments are intended to improve comparability by reflecting the impact of the Splunk acquisition in both fiscal years.
• new(2)For a definition of this term, see the description thereof contained in the discussion of transformational PRSUs in the CD&A below.
• new40Cisco 2025 Proxy Statement
• changedWe returned $12.4 $12.1billion to stockholders in fiscal 2025 2024consisting of:
• changedl$6.0 blacklining:none;$5.8billion in share repurchases
• changedl$6.4 blacklining:none;$6.4billion in cash dividends
• newAs of the end of fiscal 2025, our 1-year and 3-year TSR(1) were 47% and 66%, respectively.
• changed(1)TSR 1TSRrepresents cumulative stock price change with dividends reinvested.
• changed1-year and 3-year TSR are measured based on the fiscal year periods ending July 26, 2025. 27,2024.
• newSay-On-Pay Support and Engaging with Our Stockholders
• changedListeningtoOurStockholdersOur Compensation Committee relies on our regular stockholder outreach and engagement activities, as well as more formal channels to communicate with stockholders, including the opportunity for our stockholders to cast a non-binding advisory vote regarding executive compensation at Cisco’s annual meeting of stockholders.
• changedSee the “Governance and Board Matters – Corporate Governance – Stockholder Engagement” section above for a discussion of our fiscal 2025 2024stockholder outreach and engagement.
• changedSee also the “Governance and Board Matters – Corporate Governance – Board of Directors – Stockholder Communications with the Board” section above. section.
• changedLast year’s say-on-pay proposal was approved by approximately 77% 75%of stockholder votes, an increase areductionfrom approximately 75% 89%the prior year.
• changedIn response to this vote, Therefore,we continued our robust engagement with stockholders to consider enhancements to our compensation program in fiscal 2025. 2024.
• changedIn fiscal 2025, 2024,with the frequent participation of the chair of our Compensation Committee, Cisco engaged with stockholders representing approximately 61% 57%of our outstanding shares at the end of the fiscal year, including 30% 43%of our 30 largest stockholders, on a variety of topics, including our executive compensation program.
• newSee below for our response to feedback received from stockholders during these engagements.
• newFeedback ReceivedCisco’s ResponseUse of multi-year performance goals under the long-term incentive program, rather than annual goalsWe transitioned from annual performance goals to a multi-year operating goal over the three-year performance period under our long-term equity incentive program with our fiscal 2025 PRSUs, introducing a three-year operating income goal.
• newAdditionally, in light of this change, we changed our fiscal 2025 operating goals under the EIP from revenue and operating income to revenue and profit before taxes.Settlement of PRSUs below target for negative TSR performanceWe introduced a cap on our Relative TSR Modifier at target for our fiscal 2025 PRSUs in the event that our absolute TSR during the three-year performance period is negative.No increase in the CEO’s target long-term incentive award value during fiscal 2025The CEO’s annual base salary, variable cash incentive award, and target long-term incentive awards for fiscal 2025 remained at the same levels as fiscal 2024.Benchmarking with reference to the peer group medianWhile the Compensation Committee does not tie individual compensation to specific target percentiles, beginning with fiscal 2025 compensation decisions, the Compensation Committee references the peer group median as its primary benchmark.Adoption of a holding requirementDuring fiscal 2025, we introduced a holding requirement to our stock ownership guidelines, to further align the long-term interests of our executive officers with the creation of long-term stockholder value.Establishing performance goals above prior year actual performance levelsAll financial goals associated with fiscal 2026 incentives have been set at levels above actual fiscal 2025 performance.
• newCompensation Committee Matters41
• changedIn evaluating our compensation practices in fiscal 2025, 2024,the Compensation Committee took into account wasmindfulofthe support our stockholders expressed for Cisco’s philosophy and practice of linking compensation to operational objectives and stockholder value creation.
• changedIn fiscal 2025, 2024,the Compensation Committee continued to monitor our executive compensation programs to ensure compensation is aligned with company performance.
• changedOur revenue and profit before taxes operatingincomeunder the EIP resulted in a company performance factor (“CPF”) of 1.44 0.56for fiscal 2025, up 2024,downfrom 0.56 1.80in fiscal 2024 (when the CPF was based on revenue and operating income under the EIP), 2023,reflecting above belowtarget achievement of financial performance goals.
• newThe Compensation Committee set the fiscal 2025 target for revenue 4.5% above fiscal 2024 performance and the fiscal 2025 target for profit before taxes 5.0% below fiscal 2024 performance, in each case as measured under the EIP.
• newThese targets were set after various considerations, including: the impact of the strategic integration of Splunk into Cisco’s business to drive synergies; a complex operating environment, including industry and market factors such as product shipments returning to normalized levels during the first half of fiscal 2025 from an elevated level of shipments during the first half of fiscal 2024; impacts from regulation and policy changes; and potential performance headwinds related to these considerations.
• newPerformance CriteriaFiscal 2025 Goals ($ billions)Pay for Performance ResultsThresholdTargetMaximumFiscal 2025 Results($ billions)Revenue $56.7 (101% of target)Profit Before Taxes $18.6 (106% of target)
• new42Cisco 2025 Proxy Statement
• new2023-2025 PRSU Plan
• changedThe payout under our three-year PRSU plan for fiscal 2023-2025 2022-2024was 138% 74%of target (versus 74% 90%for fiscal 2022-2024), 2021-2023),representing achievement of 116% 96%of our operating income, operating cash flow, flowand EPS goals and 119% 52%for the goal of TSR relative to the component companies of the S&P 500 Index over the three-year period based on Cisco’s TSR at the end of the performance period at the 74th 26thpercentile.
• newPay-for-Performance Results for Fiscal 2023 GrantPerformance CriteriaPerformance MetricOperating Income/Operating CashFlow/EPS(1)Relative TSR(2)Earned PRSUs = Target PRSUs x Average Financial Goal Multiplier x Relative TSR ModifierFiscal 2025115%(3)119%Fiscal 202490%(4)Fiscal 2023144%(5)Three-Year Result116%119%PRSUs Earned138% of Target
• changed(1)This (1)Thisis the Financial Goal Multiplier.
• newOperating income, operating cash flow, and EPS are determined pursuant to the PRSUs as set forth in the CD&A below and in the CD&A for fiscal 2024.
• new(2)This is the Relative TSR Modifier.
• new(3)During fiscal 2025, the Compensation Committee used operating income as the operating goal under the PRSU plan instead of operating cash flow and EPS, which were used during fiscal 2024 and fiscal 2023.
• changed(4)During (3)Duringfiscal 2024, the Compensation Committee modified the adjustments used to determine operating cash flow and diluted EPS under the PRSUs to exclude impacts from theimpactofthe acquisition of Splunk, which was completed earlier than initially anticipated, resulting in a Financial Goal Multiplier of 90%, an increase from a Financial Goal Multiplier of 81% without the modification.
• changed(5)The (4)TheCompensation Committee exercised its discretion to reduce the fiscal 2023 portion of the Financial Goal Multiplier from 149% to 144% to reflect the difference between the estimated tax rate for fiscal 2023, which was based in part on the potential legislation change pertaining to the research capitalization requirement enacted in the Tax Cuts and Jobs Act and used to establish the EPS goals for fiscal 2023, and the lower actual tax rate for fiscal 2023 as the legislation did not pass.
• changedFiscal 2025 2024CEO Pay
• newFor fiscal 2025, our CEO’s target TDC was $32.8 million, flat from the prior year.
• changedWhen comparing our CEO’s target TDC to the CEOs in our peer group, our CEO’s target TDC was at isbelowthe median of the CEOs in our peer group.
• newWhile the Compensation Committee does not tie individual compensation to specific target percentiles, beginning with fiscal 2025 compensation decisions, the Compensation Committee references the peer group median as its primary benchmark.
• changed​AttractandRetain​​​MotivatePerformance​​Attract and retain key executives with the proper background and experience required to drive our future growth and profitability by offering a total compensation program that flexibly adapts to changing economic, regulatory and social conditions, and takes into consideration the compensation practices of peer companies based on an objective set of criteria.Provide a significant portion of compensation through variable, performance-based components that are at-risk and based on Cisco’s achievement of designated financial and non-financial objectives. criteria.
• changed​RewardActualAchievement​​​AlignInterests​​Compensate for achievement of short-term and long-term company financial and operating goals, and refrain from providing special benefits, “golden parachute” excise tax gross-ups, or accelerated equity vesting except in limited circumstances.Align the interests of our executives with our stockholders by tying a significant portion of total compensation to our overall financial and operating performance and the creation of long-term stockholder value. circumstances.
• newCompensation Committee Matters43
• newCompensation PracticesIndependent Compensation CommitteeOur Compensation Committee consists entirely of independent directors.Independent Compensation ConsultantOur Compensation Committee utilizes an independent compensation consultant, which is retained directly by the Compensation Committee and provides no other services to Cisco’s management.Risk AssessmentOur Compensation Committee performs an annual review of the risks related to our compensation programs.Pay for Performance62% of target annual TDC for the CEO was performance-based and approximately 52% of target annual TDC for the other named executive officers was performance-based.
• newSee the “Compensation Components” section for a discussion of our named executive officers’ TDC.Annual Cash IncentivePayment is primarily based on Cisco’s achievement of rigorous pre-established revenue and operating income goals (weighted 90%) and secondarily based on a team performance factor scored based on the executive leadership team’s joint execution with respect to certain Purpose goals and initiatives (weighted 10%).Annual Long-Term Equity IncentiveApproximately 60% of our CEO’s target annual equity award value is in PRSUs and, except for awards granted in connection with promotions, approximately 50% of our other named executive officers’ target annual equity award value is in PRSUs.
• changedFor fiscal 2025 2024andfiscal2023PRSUs, the PRSUs may be earned based on a pre-established three-year annualperformance goal, goals,namely operating income, cashflowandEPS,modified higher or lower by no more than 20% based on relative TSR performance measured over the same athree-year performance period, with earned values paid at the end of the full three-yearperformance period.
• newThe fiscal 2024 and fiscal 2023 PRSUs may be earned based on pre-established annual performance goals, namely operating cash flow and EPS, modified higher or lower by no more than 20% based on relative TSR performance measured over a three-year period, with earned values paid at the end of the full performance period.Caps on Incentive CompensationThere is a limit on the maximum amount of annual cash incentives and PRSUs that may be paid.
• newFor our fiscal 2025 PRSUs, we also cap at target our Relative TSR Modifier in the event that our absolute TSR during the three-year performance period is negative.No SERP or Pension PlanWe do not sponsor a supplemental executive retirement plan or a defined benefit pension plan for our executive officers.Employment AgreementsNone of our executive officers have employment, severance, or change in control agreements.Stock Ownership Guidelines and Holding RequirementWe have meaningful stock ownership guidelines for our executive officers and non-employee directors.
• newAdditionally, during fiscal 2025, we added a holding requirement, which applies until an executive officer satisfies such ownership requirement.
• new44Cisco 2025 Proxy Statement
• changedCompensation PracticesRecoupment ​​Recoupment(“Clawback”) PolicyWe Policy​​Wehave a long-standing recoupment (“clawback”) policy that is triggered in the event of certain financial restatements.
• newAdditionally, our equity plans provide for the forfeiture of awards if an executive officer participates in activities detrimental to Cisco or is terminated for misconduct.Limited PerquisitesWe only provide limited perquisites as approved by the Compensation Committee.No Single-Trigger Change-in-Control Vesting Acceleration ProvisionsNo equity awards are subject to single-trigger change in control vesting.No RepricingOur 2005 Stock Incentive Plan expressly prohibits repricing or repurchasing equity awards that are underwater without stockholder approval.No Parachute Excise Tax Gross-UpsWe do not provide tax gross-ups in connection with any “golden parachute” excise taxes.No HedgingUnder our insider trading policy, all employees (including officers) and members of the Board are prohibited from engaging in any speculative transactions in Cisco securities, including engaging in short sales, transactions involving put options, call options or other derivative securities, or any other forms of hedging transactions, such as collars or forward sale contracts.No PledgingExecutive officers and members of the Board are prohibited from pledging Cisco securities in margin accounts or as collateral for loans.No Dividends or Dividend Equivalents Paid or Settled on Unvested Equity AwardsWe do not provide for payment of dividends or settlement of dividend equivalents on unvested awards.Timing of Equity Award GrantsWe do not coordinate grants of equity awards with disclosures of positive or negative information.
• newCompensation Committee Matters45
• changedFor fiscal 2025, 2024,62% of target annual TDC for the CEO was performance-based and approximately 52% 50%of the target annual TDC for the other named executive officers was performance-based, reflecting Cisco’s pay-for-performance philosophy.
• newCEONEOs other than CEO
• newAmounts may not sum due to rounding.
• newFiscal 2025 Compensation
• changedWe provide base salaries to our executive officers to compensate them for their services rendered during the year and to provide them with a stable level of fixed compensation that offers a competitive level of salary as compared to our primary competitors for executive talent. compensation.
• newBased on the above considerations, as well as Mr. Patel’s promotion to EVP, Chief Product Officer, which was prior to his promotion to President and Chief Product Officer, the fiscal 2025 base salaries for Mr. Patel and Mr. Subaiya increased by 21% and 7%, respectively.
• changedThe fiscal 2025 2024base salary of Mr. Robbins was not increased and has not increased since the beginning of fiscal 2020.
• newNamed Executive OfficerFiscal 2025 Base SalaryFiscal 2024 Base SalaryCharles H.

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