Cisco CEO Chambers to stay 3-5 more years
NEW YORK |
NEW YORK (Reuters) - Cisco Systems Inc Chief Executive John Chambers, one of Silicon Valley's longest-serving executives, said he recently committed to another three to five years in his role.
Chambers, who took the CEO role in 1995 and is 60 years old, said the company held a board of directors' meeting a couple of days ago where he was asked to renew his commitment.
"I love what I'm doing. I'm in," he told a Sanford C. Bernstein conference in New York on Friday.
He also said there were several executives within the company he thought were capable of succeeding him.
"You begin to look at the players across the board. I have six or seven that could be my successor in three to five years," he said.
Chambers is widely credited for growing the router maker into one of the country's top technology firms through aggressive sales strategies and a series of acquisitions in new areas like consumer products and video technology.
Since he became CEO, Cisco has grown from a company with $1.2 billion in annual revenue to around $40 billion.
He is also seen as a visionary in the industry, predicting early on that a rapid expansion of Internet traffic would drive demand for advanced switches and routers.
With such a legacy, analysts say it is difficult to speculate on succession, but many see chief strategy officer Ned Hooper, who negotiated a series of high-profile acquisitions in the past year including a $3.4 billion deal for Norwegian firm Tandberg, as a leading contender.
Some say Robert Lloyd, executive vice president overseeing worldwide operations, has vast sales experience and ties to key customers, making him a more natural candidate.
Marthin De Beer, who is head of the emerging technologies group and oversees some of Cisco's more cutting-edge products, like its TelePresence videoconferencing systems, is also seen as a possible leader.
GROWTH AND OVERSEAS INVESTMENT
Chambers also reiterated Cisco's long-term target of increasing revenue by 12 percent to 17 percent a year, saying the company's expansion through acquisitions and its own technology development will help it sustain that growth.
"What you see us doing is planting the seeds again and again that will allow growth to comfortably be ... 12 to 17 percent," he said.
Asked about the economy, Chambers offered his trademark optimism, saying he felt good about its global business despite challenges in Europe. He said he was stepping up hirings, taking on around 1,500 more workers this quarter and next.
He said Cisco is likely to invest more aggressively overseas, and took the opportunity to call on the U.S. government to ease taxes on corporations' overseas profits.
"Part of it depends on, does the U.S. make a logical decision about allowing the repatriation of cash or not. I'm assuming they're not going to. We'll watch for probably another year. If that doesn't occur you're going to see us be very aggressive outside the U.S.," he said.
"However, if I were a leader in the U.S., I would bring back what could be as much as $900 billion of cash to the U.S. to make $30 or 40 billion in taxes, and tie it to headcount increases here and apply it locally."
Cisco has been increasing its overseas investment in recent years, particularly in China and India. It has also been stepping up global acquisitions, including Tandberg as well as the set-top box business of Hong Kong's DVN Ltd.
Chambers said the company plans to pay a dividend in the future, although the company would rather spend its cash on acquisitions and technology development for now.
Cisco shares were down 1.7 percent to $23.31 in early afternoon trading, performing a better than the overall market following weaker-than-expected U.S. payrolls data.
(Reporting by Ritsuko Ando; Editing by Steve Orlofsky; Editing by Tim Dobbyn)
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