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To: Amy J who wrote (180480)	3/29/2005 10:10:15 AM
From: GVTucker	Respond to of 186894

Amy, RE: How do most comp committees handle stock option compensation before someone retires from CEO but shifts to chairman? It varies all over the map. Sometimes you see a comp committee give a CEO a reward for extended service to the corporation. Other times you see compensation cut back drastically coincident with reduced duties. There's no cut and dried formula. Did Chambers get a bonus last year? You've got a bit of an apples to oranges comparison, because CSCO's fiscal year ends in July. But it still is notable. John Chambers received a bonus of $1.9mm in fiscal '04. (His salary remained at -0-, the same as '03 and '02.) '04 was the first year that he has received a bonus since fiscal '01. Chambers received no stock options in fiscal '04. In fiscal '04, CSCO stock increased about 10%. Going forward, Chambers is going to receive a salary again for fiscal '05, $350,000 annually. He's also received 1,500,000 options vesting over 5 to 7 years. All in all, CSCO's compensation for Chambers looks to parallel the interests of shareholders. It is in sharp contrast to most CEO compensation packages, unfortunately. Chambers is well paid when things go well for Cisco, and he is not well paid (at least relatively, sometimes absolutely) when things go poorly for Cisco.