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Cisco CEO to take over chairman job, too

Cisco Systems Inc. on Thursday said Chief Executive John Chambers would become chairman in November, relinquishing his role as president and triggering speculation on who would be his successor.
/ Source: Reuters

Cisco Systems Inc. on Thursday said Chief Executive John Chambers would become chairman in November, relinquishing his role as president and triggering speculation on who would be his successor.

Chambers, 56, will remain CEO for at least a few more years after he takes over as chairman from John Morgridge at Cisco's annual shareholder meeting on November 15, the leading U.S. network equipment maker said.

Morgridge, 72, will become chairman emeritus.

Cisco did not identify who would become the company's president and analysts said the front-runners were Chief Development Officer Charles Giancarlo and Mike Volpi, general manager of the routing and service provider technology group.

"Both Giancarlo and Volpi are capable as next senior management. The company obviously has a deep bench for talent," said Ken Muth, senior research analyst at Robert W. Baird & Co.

"Maybe Giancarlo could be a stronger candidate for CEO, although Volpi could become the next president."

Giancarlo heads Cisco-Linksys, which makes wireless network equipment for consumers, while Volpi has played a crucial role in the company's acquisition and investment strategies. Both have been at Cisco for more than a decade.

Chambers has been president and CEO since January 1995.

"John Chambers has recently committed to another three to five years minimum as CEO," said Terry Anderson, a spokeswoman for Cisco.

The company's board currently consists of 12 directors, nine of whom are independent. Last year, Cisco adopted a policy barring anyone over the age of 70 from joining the board.

Cisco also said on Thursday that its board authorized up to $5 billion in additional share repurchases, raising its total buyback program from $35 billion.

There is no fixed timetable for the buyback program.

From September 2001 through the end of April, Cisco repurchased and retired around 1.8 billion shares at an average price of $18.21 each, for an aggregate amount of about $32.6 billion, the company said. The remaining authorized amount is about $2.4 billion.

Cisco last month said its revenue rose to $7.32 billion in the third quarter ended on April 29, up from $6.19 billion a year earlier and exceeding Wall Street forecasts.

Net income fell slightly, largely due to stock-based accounting. The company has forecast fourth-quarter revenue between $7.8 billion and $7.95 billion.