CISCO India $632000 home rent
By Sandhya

After disappointing financial results, American networking giant Cisco has been undergoing rationalization for the last 5 months. It shuttered its Flip camcorder business.  13 thousand jobs have been made redundant and more than 12 thousand employees moved.  Cisco openly said it had ‘lost its way’ and become ‘fat’. The CISCO boss in India was paying $632K rent in Bangalore.

Cisco has a huge set up in India which plays a key role in its international operations.  CISCO’s top man in India was Chief Globalisation Officer and Executive Vice President for Emerging Solutions Group, Wim Elfrink.  Elfrink was in India from 2007 – 2011. He was moved out of India as a cost cutting exercise – apparently, Elfrink was costing the company $3.8 Million a year to operate from India.

American site Footnoted, which only reports on SEC filings, has details of Wim Elfrink’s salary and perks ($3.8 Million a year), while in India

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The part that really popped out at us — even at a company the size of Cisco — was the cost of housing in India: a whopping $631,797. While we’re admittedly not very knowledgeable about the real estate market in Bangalore, the number seems excessive by any reasonable measure, even if, as the proxy notes, it also included “maintenance and domestic household assistance.”  Cisco also paid nearly $200K last year for housing assistance and utilities in the U.S., which we’ll assume means paying the mortgage on Elfrink’s home in Silicon Valley, though the proxy isn’t very specific. And the company will spend another $200K to move Elfrink back to the U.S. There was also another $700K or so that the proxy helpfully notes was used for ‘personal benefits included in the amounts shown for fiscal 2011 consist of the following: provision of security arrangements, allowances for automobiles, child education, home leave travel, relocation, and fees for tax services; and goods and services differential.’

All told, Elfrink’s other compensation — the various perks — added up to $3.8 million, the bulk of which, or $2.1 million, was for “tax equalization benefits” — otherwise known as a gross-up. That gross-up was more than three times higher than it was just two years earlier.
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