Update Report #4 to
Our two representatives at the annual Cisco shareholders’ meeting (December 7, 2011) at San Jose, California filed with this report:
CEO John Chambers declined to announce any increase in dividends or special dividends. He conditioned any consideration of dividend increases on the Congress and the President approving a tax holiday for the repatriation of Cisco profits parked overseas. He added that until they “get an answer on repatriation, it’s hard to answer” what is the proper balance between acquisitions, buybacks, dividends and cash accumulation. This shift-to-Washington argument means that Mr. Chambers is telling the company’s owners that no dividend increase is in the works. In 2004 Congress gave companies with profits overseas a tax holiday on the declared promise that the repatriated billions would be invested in job-producing activity. This promise turned out to be a gigantic hoax as the money was overwhelmingly used for anything but job production. Many in Congress have not forgotten this betrayal by large multinational companies.
We need to tell John Chambers that there is plenty of Cisco cash for greater dividends from what is generated in this country. This assumes that Cisco is not shifting its profits disproportionately overseas through transfer pricing and other techniques. At least half of Cisco’s business comes from the United States. Cisco is generating about $3 billion in accumulated cash reserves every three months. There are about 5.5 billion shares outstanding. You figure if Cisco is able to respond now at long last to shareholder demands on dividends.
Cisco management is feeling the heat from shareholders. We know that from insiders. It just needs to reach the boiling point to break through.
My previous report (http://nader.org/index.php?/archives/2334-Cisco-Update-3-to-Shareholders.html) to you describes my suggestion for shareholders to give 1 cent per share they own to retain a full time watchdog-nudger to shake the dividends out of Cisco. Some of you have already responded, but we need to reach owners of a total of 6 million shares to pledge a penny per share for a total of $60,000 before any voluntary pledges are collected and the dynamic watchdog can come on board.
So let’s hear from you! Send your responses to [email protected] Also, send your ideas and names of other Cisco shareholders to contact. Only we together can do it.
Best wishes, Ralph Nader