DEF 14A of Ciena Corp
Filed Feb 13, 2025 · FY20240000950170-25-019400
Fiscal 2024 executive compensation highlights
| Base salaries | Equity award structure | | Did not increase the base salary of our CEO Increased the base salaries of other named executive officers ("NEOs") to improve alignment with the market for their positions and in recognition of the criticality of their roles | Continued mix of performance-based and time-based equity awards, with approximately 60% of the target award value for our CEO, and 50% of the target award value for the other NEOs, allocated to at-risk, performance-based equity in the form of performance stock units ("PSUs") and market stock units ("MSUs") | | Target cash incentives | Equity award values | | Did not increase the target cash incentive opportunities (expressed as a percentage of base salary) for our CEO or other NEOs (other than Mr. DiPerna, whose increase reflects his promotion to executive officer commencing in fiscal 2024) | Provided reasonable increases in the target value of annual equity awards for certain of our NEOs to improve alignment with the market and stockholder interests and to maintain retention |
Pay-for-performance alignment
Pay-for-performance alignment
Pay-for-performance alignment
| CEO fiscal 2024 target total direct compensation mix | | Average non-CEO NEO fiscal 2024 target total direct compensation mix | | | | |
Pay-for-performance alignment
Corporate governance and stockholder outreach Stockholder outreach and engagement We believe that strong corporate governance practices include regular outreach and conversations with our stockholders. We regularly discuss our business, financial performance, industry dynamics, compensation, governance, and sustainability matters with our stockholders. We actively seek engagement with stockholders of all sizes through a combination of virtual and in-person engagements, including our annual meeting, our website, investor conferences, and one-on-one meetings where appropriate. For example, in the last 12 months, we have engaged with more than half of our 25 largest stockholders an aggregate of almost 60 times. Our Board of Directors also reviews feedback from certain stockholder engagements as well as stockholder inquiries directly related to its responsibilities. These regular engagements allow us to obtain feedback on stockholders’ perception and understanding of our markets, business and industry and inform our Board of Directors directly to facilitate their oversight of management and the company. They have also influenced our communications, which include detail on key elements of our corporate strategy, long-term financial targets and an articulation of our broader approach to our capital allocation priorities. In June 2024, we published our 2023 Sustainability Report. During fiscal 2024, we proactively distributed information related to our sustainability programming to our top 17 stockholders, representing approximately 60% of our outstanding shares, and members of our leadership team met with five of these stockholders on these topics. Information contained on or available through our website is not incorporated by reference in or made part of this proxy statement and any references to our website are intended to be inactive textual references only. Recent governance changes
Pay-for-performance alignment
| Bylaw amendments | Policies and charters | | Amended and restated our bylaws in December 2024 in connection with our periodic governance review, to: • clarify procedural mechanics and disclosure requirements in connection with stockholder nominations of directors and submission of stockholder proposals made in connection with annual and special meetings of stockholders • make administrative and ministerial language updates | Updated policies and charters to reflect alignment with good governance practices: • Code of Ethics for Directors • Code of Ethics for Senior Financial Officers • Principles of Corporate Governance • Charters of standing Board committees |
Pay-for-performance alignment
| Other governance and sustainability highlights | | | • Appointed independent Board Chair • Appointed new Audit Committee Chair • Through a range of volunteering and charitable activities, Ciena and its employees donated approximately $3.9 million and volunteered more than 37,000 hours • Published 2023 Sustainability Report • Published updated investor presentation highlighting aspects of our sustainability programming and conducted stockholder outreach | • Received approval from the Science Based Targets initiative for two new greenhouse gas reduction goals which aim to reduce our Scope 1 and 2 greenhouse gas emissions by 80.6% by fiscal 2030 compared to fiscal 2019 levels, and to reduce our Scope 3 greenhouse gas emissions per gigabit of capacity shipped by 71.3% by fiscal 2030 compared to fiscal 2019 levels to continue to improve the sustainability of our operations |
Pay-for-performance alignment
Existing strong governance structure
Pay-for-performance alignment
| • Eight of ten current directors are independent • Separate Board Chair and CEO roles • Independent Board Chair • Code of Ethics for Directors • Standing committees composed solely of independent directors | • Annual Board and committee self-assessments • Market-standard proxy access rights • Majority voting in uncontested director elections • Limits on annual non-employee director compensation • Independent directors regularly meet without management present |
Pay-for-performance alignment
Voting roadmap This section highlights selected information about the items to be voted on at the Annual Meeting. It does not contain all information that you should consider in deciding how to vote. You should read the entirety of this proxy statement carefully before voting.
Pay-for-performance alignment
| Proposal | | | | Elect director nominees | | see page 5 | The Board recommends a vote FOR each nominee |
Pay-for-performance alignment
| | Class | Independent | Director Since | Board Leadership / Committees | | Lawton W. Fitt Chairperson, The Progressive Corporation | I | | November 2000 | • Chair of Board • Audit Committee | | Devinder Kumar Former EVP, CFO and Treasurer, Advanced Micro Devices, Inc. | I | | August 2019 | • Audit Committee (Chair) |
Pay-for-performance alignment
| Proposal | | | | Ratify PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal 2025 | | see page 28 | The Board recommends a vote FOR this proposal | | | ❖ Independent firm with reasonable fees and significant financial reporting expertise ❖ PwC has audited our consolidated financial statements annually since our incorporation in 1992 ❖ Audit Committee annually evaluates PwC and has determined that its appointment continues to be in the best interests of our stockholders | | Proposal | | | | Say-on-Pay: advisory vote on named executive officer compensation | | see page 71 | The Board recommends a vote FOR this proposal | | | ❖ We employ core compensation principles and practices to promote pay for performance and alignment of executive and stockholder interests ❖ At last year’s annual meeting, approximately 90% of stockholder votes cast were in favor of our executive compensation program ❖ Our overall fiscal 2024 executive compensation was reasonable and appropriate in light of our business and financial performance |
Pay-for-performance alignment
Election of Class I Directors Our Board of Directors currently consists of ten directors divided into three classes. Each class of our Board of Directors serves a three-year term, and the terms of the classes are staggered. At the Annual Meeting, two directors will be elected to fill positions in Class I. Lawton W. Fitt and Devinder Kumar, each of whom is a current Class I director whose current term expires at the Annual Meeting, are nominees for election at the Annual Meeting. Each of the nominees for Class I, if elected, will serve for a three-year term expiring at the 2028 Annual Meeting, or until such director’s successor is duly elected and qualified, or until such director’s earlier death, resignation, or removal from the Board. The nomination of these directors to stand for election at the Annual Meeting has been recommended by the Governance and Nominations Committee and approved by the Board of Directors. On December 11, 2024, Patrick H. Nettles, Ph.D., who is a current Class I director, notified Ciena of his planned retirement and that he would not stand for re-election as a director at the end of his term. Accordingly, the size of the Board of Directors will be reduced from ten directors to nine directors effective at the Annual Meeting. We would like to thank Dr. Nettles for his many years of service and for his many important contributions to Ciena. Director qualifications The Governance and Nominations Committee reviews candidates for service on the Board of Directors and recommends nominees for election to fill vacancies on the Board, including nomination for re-election of directors whose terms are due to expire. The Governance and Nominations Committee endeavors to identify, recruit and nominate candidates who possess a combination of wisdom, sound judgment, excellent business skills, maturity, and high integrity. In particular, the Governance and Nominations Committee seeks individuals with a record of accomplishment and senior leadership experience in their chosen fields who display the independence of mind and strength of character to be committed to representing the long-term interests of our stockholders, and the interests of other key stakeholders, including our customers, employees, business partners, and communities. The Governance and Nominations Committee also seeks to ensure that the Board of Directors is composed of individuals of diverse backgrounds, who have a variety of complementary experience, skills and relationships relevant to Ciena’s business and industry. The Governance and Nominations Committee also sees the benefit of diversity in terms of tenure and having a mix of individuals with a diverse range of experience as a director, whether on Ciena’s Board or that of another company. This diversity of background and experience includes ensuring that the Board includes individuals with experience or skills sufficient to meet the requirements of the various rules and regulations of The New York Stock Exchange (the "NYSE") and the SEC, such as the requirements to have a majority of independent directors, committees composed only of independent directors, and an audit committee financial expert. We also believe that having a diversity of perspectives represented on the Board strengthens Board oversight to the benefit of our stockholders. As required by the Governance and Nominations Committee Charter, the committee has developed and uses criteria for maintaining a balanced board of directors that possesses a diversity of skills and characteristics, and it recommends criteria, establishes procedures for, and conducts an annual review of the Board, its committees, and directors, and reports to the Board on the results of the review. In nominating candidates to fill vacancies created by the expiration of the term of a director, the Governance and Nominations Committee determines whether the incumbent director is willing to stand for re-election. If so, the Governance and Nominations Committee evaluates the director’s performance to determine suitability for continued service, taking into consideration, among other things, the director’s independence, the director's contributions to the Board, the value of the continuity of the director’s service, feedback from the Board's annual self-assessment and from stockholders, including the results of the stockholder vote at the most recent annual meeting, the director's attendance and participation at Board and committee meetings, and the director’s familiarity with Ciena’s markets, business and operations. Board composition – continuing directors and nominees
Pay-for-performance alignment
| | Skills and experience | Board tenure non-executive directors | | | | | 0 to 7 years | | | | | | | | | | 7 to 16 years | | | | | 16+ years | |
Pay-for-performance alignment
Independence and diversity The above charts reflect information for our nominees and continuing directors, and skills that our Board believes are important to the oversight of Ciena. Annually, we ask each of our nominees and continuing directors to self-identify based on both their skills and experience and a range of characteristics, including gender, race, ethnicity, sexual orientation, and disability. In response, three of our nominees and continuing directors self-identified as female and two self-identified as Asian or South Asian. Each of the nominees has consented to serve if elected. However, if any of the persons nominated by the Board of Directors fails to stand for election, declines to accept election, or is otherwise unavailable for election prior to our Annual Meeting, proxies solicited by our Board of Directors will be voted by the proxy holders for the election of any other person or persons as the Board of Directors may recommend, or our Board of Directors, at its option, may reduce the number of directors that constitute the entire Board of Directors. As Dr. Nettles will be retiring at the end of his term, he is not included in the above charts. Information regarding nominees and continuing directors Director nominees Class I director nominees for terms expiring in 2028
Pay-for-performance alignment
| Lawton W. Fitt | | | | Director since November 2000 • Chair of the Board • Audit Committee Age 71 Other public boards 2 | Skills and qualifications • Substantial investment banking experience and expertise in structuring and negotiating acquisition and financing transactions • Understanding of the capital markets • Brings a strong financial background to her service on the Audit Committee and as Chair of the Board • Significant experience in the areas of raising capital, financial oversight and enterprise risk analysis • Executive management experience • Service as a director, lead independent director, and member of the audit committee of other public companies | Other current board experience • The Carlyle Group Inc., Lead Independent Director (public) • The Progressive Corporation, Chairperson (public) Previous board experience • ARM Holdings PLC • Micro Focus International PLC • Thomson Reuters Corporation Professional highlights Ms. Fitt previously served as Director of the Royal Academy of Arts in London from October 2002 to March 2005. From 1979 to October 2002, Ms. Fitt was an investment banker with Goldman Sachs & Co., where she was a partner from 1994 to October 2002. Ms. Fitt also serves as a director or trustee of several non-profit organizations. |
Pay-for-performance alignment
| Devinder Kumar | | | | Director since August 2019 • Audit Committee (chair) Age 69 Other public boards 0 | Skills and qualifications • Strong financial and accounting background including as Chief Financial Officer of a public company • Brings a strong financial background to his service as Chair of the Audit Committee • Senior leadership experience managing a global finance organization, treasury, global corporate services and facilities • Global experience with a multinational organization, including time spent in Asia • More than 40 years in the technology industry | Professional highlights Mr. Kumar served as Executive Vice President and Chief Financial Officer of Advanced Micro Devices, Inc. ("AMD"), a global semiconductor company, for ten years from 2013 to January 2023, as Treasurer for eight years from 2015 to January 2023, and as Corporate Controller for eleven years from 2001 to 2012. He has significant global experience, including spending ten years in Asia working for AMD's manufacturing services group across Malaysia, China, Singapore, and Thailand. He retired from AMD in April 2023. Mr. Kumar has a Bachelor of Science degree in ecology from the University of Malaya, Malaysia, a Master of Arts degree in biology from the University of California, Santa Barbara, and an MBA in finance from the University of California, Los Angeles. |
Pay-for-performance alignment
Continuing directors Class II directors with terms expiring in 2026
Pay-for-performance alignment
| Joanne B. Olsen | | | | Director since October 2018 • Compensation Committee (chair) • Governance and Nominations Committee Age 66 Other public boards 2 | Skills and qualifications • Significant industry experience and knowledge of cloud infrastructure applications • Senior leadership experience with large, multinational technology companies • Global business experience and insight into doing business in key international markets • Executive management experience across a range of sales, services and alliances • Experience as a director of public technology companies Other current board experience • Teradata Corporation (public) • Keysight Technologies, Inc. (public) | Professional highlights Ms. Olsen previously served as Executive Vice President of Global Cloud Services and Support at Oracle Corporation ("Oracle") from 2016 until her retirement in August 2017. In that role, she drove Oracle’s cloud transformation services and support strategy, partnering with leaders across all business units. Ms. Olsen previously served as Senior Vice President and leader of Oracle’s applications sales, alliances, and consulting organizations in North America from 2012 through 2016, and from 2010 through 2012 served in various general management positions at Oracle. Ms. Olsen began her career with International Business Machines Corp (IBM), where, between 1979 and 2010, she held a variety of executive management positions across sales, global financing and hardware. |
Pay-for-performance alignment
| Mary G. Puma | | | | Director since August 2023 • Audit Committee Age 67 Other public boards 3 | Skills and qualifications • Prior service as a Chief Executive Officer of a company in the semiconductor supply industry provides the Board with a high level of expertise and experience in the operations of a global supply company • Provides the Board with strategic insights across a range of corporate functions • Previous management and oversight experience relating to sales, marketing, research and development, supply chain management and manufacturing • Experience in global business transactions, risk management, and a business-oriented approach to resolving operational challenges • Public company director experience Other current board experience • Allegro Microsystems, Inc. (public) • Penguin Solutions, Inc. (formerly SMART Global Holdings, Inc.) (public) • Entegris, Inc. (public) Previous board experience • Axcelis Technologies, Inc. (public) • Nordson Corporation (public) • Apogent Technologies, Inc. (public) | Professional highlights Ms. Puma served as Executive Chairperson of the board of directors of Axcelis Technologies, Inc. ("Axcelis") from May 2023 to May 2024. Ms. Puma previously served at Axcelis, a publicly traded company engaged in the supply of capital equipment for the semiconductor chip manufacturing industry, as President and Chief Executive Officer from January 2002 to May 2023, as President and Chief Operating Officer from July 2000 to January 2002, and as Chairperson of the Board from 2005 to 2015. In 1998, Ms. Puma became General Manager and Vice President of Axcelis’s predecessor, the Implant Systems Division of Eaton Corporation. Prior to joining Eaton Corporation in 1996, Ms. Puma spent 15 years in various marketing and general management positions at General Electric Company (GE). She also serves on the board of directors of SEMI, a global industry association serving the manufacturing supply chain for the micro- and nano-electronics industries, where she has served as Chairperson of the Board since December 2022. Ms. Puma holds a Bachelor of Arts degree in economics from Tufts University and a Master of Science degree from the MIT Sloan School of Management. |
Pay-for-performance alignment
| Gary B. Smith | | | | Director since October 2000 Age 64 Other public boards 0 | Skills and qualifications • As Chief Executive Officer of Ciena for over 20 years, provides the Board with leadership skills, industry experience and comprehensive knowledge of Ciena’s business, strategy, operations and financial position • Unique perspective on the strategic and operational challenges and opportunities faced by Ciena • Over 30 years of experience in the telecommunications industry, during which time he has lived and worked on four continents • Global industry sales and marketing experience provide the Board an important perspective into Ciena’s markets and business and selling strategies | Previous board experience • Avaya, Inc. • CommVault Systems, Inc. Professional highlights Mr. Smith joined Ciena in 1997 and has served as President and Chief Executive Officer since May 2001. Prior to his current role, his positions with Ciena included Chief Operating Officer and Senior Vice President, Worldwide Sales. Mr. Smith previously served as Vice President of Sales and Marketing for Intelsat S.A. and Cray Communications, Inc. Mr. Smith serves on the Wake Forest University Entrepreneurship Advisory Council and participates in initiatives with the Center for Corporate Innovation. |
Pay-for-performance alignment
Class III directors with terms expiring in 2027
Pay-for-performance alignment
| Hassan M. Ahmed, Ph.D. | | | | Director since June 2020 • Compensation Committee • Governance and Nominations Committee Age 67 Other public boards 0 | Skills and qualifications • Prior service as a Chief Executive Officer of a technology company in an adjacent space provides the Board with a high level of expertise and experience in our industry • Provides the Board with strategic insights across a range of corporate functions • Previous management and oversight experience within the industry • Significant industry knowledge and expertise in NFV solutions Other current board experience • Avesha Inc. (private) • Oxefit, Inc. (private) • Sway AI Inc., Executive Chairman (private) Previous board experience • Affirmed Networks, Inc., Chairman • Founder SPAC, Executive Chairman • KINS Technology Group, Inc. (public) • Vesper Technologies, Inc. (private) | Professional highlights Dr. Ahmed has served as Executive Chairman and CEO of Sway AI, Inc., a provider of artificial intelligence technologies and services, since March 2021 and served as Executive Chairman of Founder SPAC, a special purpose acquisition company, from March 2021 until its merger with software company Rubicon Technologies, LLC in August 2022. He previously served as Chairman of the board of directors and Chief Executive Officer of Affirmed Networks, Inc., a provider of virtualized, cloud-native mobile network solutions, which was acquired by Microsoft in April 2020. Before founding Affirmed Networks in 2010, he was a senior advisor at Charles River Ventures, LLC. From 1998 to 2008, Dr. Ahmed served as Chairman and Chief Executive Officer of Sonus Networks, Inc. Prior to that time, he served in various executive roles at Ascend Communications, Inc., Cascade Communications Corporation and Analog Devices, Inc. He also served as President and founder of WaveAccess, Inc. and founded and served as director of the VLSI Systems Group of Codex Corporation. Dr. Ahmed previously served as Associate Professor of Electrical, Computer and Systems Engineering and Associate Professor of Finance at Boston University. |
Pay-for-performance alignment
| Bruce L. Claflin | | | | Director since August 2006 • Audit Committee • Compensation Committee Age 73 Other public boards 1 | Skills and qualifications • Prior service as a Chief Executive Officer of a technology company in an adjacent industry provides the Board with a high level of expertise and experience in the operations of a global, high technology company • Provides the Board with strategic insights across a range of corporate functions • Previous management and oversight experience relating to sales, marketing, research and development, supply chain management and manufacturing • Experience in global business transactions, risk management, executive compensation and a business-oriented approach to resolving operational challenges • Experience as a director of public technology companies • Prior service as a fellow on the National Association of Corporate Directors | Other current board experience • IDEXX Laboratories, Inc., Chair of the Governance and Corporate Responsibility Committee; Audit Committee (public) Previous board experience • Advanced Micro Devices, Inc. (AMD) Professional highlights Mr. Claflin served as President and Chief Executive Officer of 3Com Corporation ("3Com"), a manufacturer of computer network products, from January 2001 until his retirement in February 2006. Mr. Claflin joined 3Com as President and Chief Operating Officer in August 1998. Prior to 3Com, Mr. Claflin served as Senior Vice President and General Manager, Sales and Marketing, for Digital Equipment Corporation. Mr. Claflin also worked for 22 years at International Business Machines Corp (IBM), where he held various sales, marketing and management positions, including general manager of IBM PC Company’s worldwide research and development, product and brand management, as well as president of IBM PC Company Americas. |
Pay-for-performance alignment
| Patrick T. Gallagher | | | | Director since May 2009 • Compensation Committee • Governance and Nominations Committee (Chair) Age 70 Other public boards 1 | Skills and qualifications • Extensive global business experience provides the Board with expertise and an important perspective regarding international transactions and markets • Experience as a senior executive of major European telecommunications service providers offers the Board insight into carrier customer perspectives as well as industry opportunities, marketing and sales strategies and operational challenges outside of the United States • Industry knowledge and prior management expertise provide the Board with significant industry knowledge and expertise in submarine and wireless network applications and strategic growth market opportunities for Ciena • Experience as a public company director in both the United States and Europe provides strong background as Chair of the Governance and Nominations Committee Other current board experience • Harmonic, Inc., Chairman (public) • Mirabeau SAS, Chairman (private) | Previous board experience • Intercloud SAS Professional highlights Since October 2007, Mr. Gallagher has served as Chairman of Harmonic Inc., a publicly traded company and global provider of high-performance video solutions to the broadcast, cable, telecommunications and managed service provider sectors. Mr. Gallagher has served as Chairman of privately held Mirabeau SAS, a French wine producer, since August 2019. From January 2014 until January 2022, Mr. Gallagher served as Chairman of privately-held Intercloud SAS, an international software defined cloud interconnect company. Previously, from March 2008 until April 2012, Mr. Gallagher served as Chairman of Ubiquisys Ltd., from January 2008 until February 2009, Mr. Gallagher served as Chairman of Macro 4 Ltd., and from May 2006 until March 2008, he served as Vice Chairman of Golden Telecom Inc. From 2003 until 2006, Mr. Gallagher was Executive Vice Chairman and served as Chief Executive Officer of FLAG Telecom Group Ltd. and, prior to that role, he held various senior management positions at BT Group plc. |
Pay-for-performance alignment
| T. Michael Nevens | | | | Director since February 2014 • Audit Committee Age 75 Other public boards 1 | Skills and qualifications • Substantial experience with and exposure to a wide variety of companies and their corporate strategies, both as a private equity adviser and management consultant, provides the Board with expertise in the areas of strategic and long-term business planning and competitive strategy • Provides the Board with insight on corporate governance changes affecting public companies • Experience as a director of other global, high technology companies Other current board experience • NetApp, Inc., Chairman (public) Previous board experience • Altera Corporation • Longbow Security, Inc. (previously TalonX, Inc.) | Professional highlights Mr. Nevens has served as senior adviser to Permira Advisers, LLC, an international private equity fund, since 2006, and as an emeritus senior advisor since January 2023. From 1980 to 2002, Mr. Nevens held various leadership positions at McKinsey & Co. Inc., most recently as a director (senior partner) and as managing partner of the firm’s Global Technology Practice. He also served on the board of the McKinsey Global Institute, which conducts research on economic and policy issues. Mr. Nevens has been an adjunct professor of Corporate Governance and Strategy at the Mendoza College of Business at the University of Notre Dame. |
Pay-for-performance alignment
| The Board of Directors recommends that you vote FOR the election of the two Class I nominees listed above |
Pay-for-performance alignment
Corporate governance and the Board of Directors Ciena has adopted a number of policies and practices that highlight our commitment to sound corporate governance principles and sustainability. We maintain a corporate governance page on our website that includes additional related information, as well as governance documents such as our bylaws, codes of conduct, Principles of Corporate Governance, and the charters for each of the standing committees of the Board of Directors. This information and documentation can be found on the "Corporate Responsibility – Governance Documents" page of the "Investors" section of our website at www.ciena.com. Independent directors In accordance with the current NYSE listing standards, the Board of Directors, on an annual basis, affirmatively determines the independence of each director or nominee for election as a director. The Board of Directors has determined that, with the exception of Dr. Nettles and Mr. Smith, both of whom are employees and executive officers of Ciena, all of its members during fiscal 2024 are "independent directors," using the definition of that term in the NYSE Listed Company Manual. Also, as more fully described below, all members of the Board’s standing Audit, Compensation and Governance and Nominations Committees are independent directors, and all members of the Board’s standing Audit and Compensation Committees are independent directors in accordance with the additional listing standards applicable to those committees. Communicating with the Board of Directors The Board of Directors has adopted a procedure for receiving and addressing communications from all interested parties, including Ciena’s stockholders. Interested parties may send written communications to the entire Board of Directors (or any committee thereof), Ciena’s Chair of the Board of Directors, or all of the independent directors serving on the Board, by addressing communications to: Ciena Corporation 7035 Ridge Road Hanover, Maryland 21076 Attention: Corporate Secretary Please address any communication by e-mail to ir@ciena.com with "Attention: Corporate Secretary" in the subject line. Our Corporate Secretary and our General Counsel determine, in their discretion, whether the nature of the communication is such that it should be brought to the attention of the Board of Directors or a committee thereof, the Chair of the Board of Directors, or all of the independent directors. As a general matter, the Corporate Secretary does not forward spam, junk mail, mass mailings, job inquiries, surveys, business solicitations or advertisements, or offensive or inappropriate material. Principles of Corporate Governance, Bylaws, and other governance documents The Board of Directors has adopted Principles of Corporate Governance and other corporate governance policies that supplement certain provisions of our bylaws and relate to the composition, structure, interaction and operation of the Board of Directors. Copies of our Principles of Corporate Governance, bylaws, stock ownership guidelines and other governance documents can be found on the "Corporate Responsibility – Governance Documents" page of the "Investors" section of our website at www.ciena.com. You should review these documents for a complete understanding of these corporate governance practices, but some of the key elements of our strong governance policies and practices are summarized below:
Pay-for-performance alignment
| ❖ | Majority vote standard in uncontested director elections with a mandatory resignation policy that requires incumbent directors and nominees to submit an irrevocable resignation that becomes effective upon the failure to receive a majority vote and the Board’s acceptance of the resignation | ❖ | Stock ownership guidelines require our executive officers and non-employee directors to hold shares as follows: | | | | | | Position | Stock Ownership Requirement | | ❖ | "Overboarding" and service on other boards all directors are in compliance with our "overboarding policy," which limits directors to service on three other public company boards for directors not serving as an executive officer of a public company, and one other public company for a director serving as an executive officer of a public company; in addition, our Governance and Nominations Committee annually reviews and evaluates director time commitments, outside board service, and leadership roles on other boards, including when making recommendations regarding leadership roles for our Board | | CEO Executive Chair Executive Officers Non-Employee Directors | 5x base salary 5x base salary 2x base salary 5x cash retainer | | | | ❖ | Prohibition against pledging Ciena securities and hedging transactions for all employees and directors, in accordance with Ciena’s Insider Trading Policy | | | ❖ | Changes affecting independence including a change to a director’s principal occupation or giving rise to an interlocking directorate, require the director to tender resignation and the Board to consider whether to accept the director’s resignation | | | | | | | ❖ | Term limit for directors elected to fill vacancies from the period from election by the Board until the first annual meeting following election | | | | | ❖ | Independent Board Chair drives accountability at the Board level, facilitates the Board's oversight of management and our long-term strategy and business initiatives and serves as a liaison between management and independent directors | | | ❖ | No term limits or mandatory retirement age to allow the skill set and perspectives of the Board’s members to remain sufficiently current and broad in dealing with current and changing business dynamics | | | | | | | ❖ | Executive sessions of independent directors meet regularly without employee-directors or other executive officers present | | | ❖ | Proxy access provision in our bylaws by which eligible stockholders may nominate director candidates for inclusion in our proxy statement and proxy card | | | | | | | ❖ | Outside advisors and consultants may be retained by the Board or its committees at their discretion and at Ciena’s expense, without consent of management | | | ❖ | Robust annual assessment process to address refreshment and ensure that our Board and its committees are performing effectively and in the best interests of Ciena and its stockholders | | | |
Cybersecurity and data privacy
| | Commitment to our people and communities Our "people strategy" is annually reviewed by and discussed with our Board and is designed to attract and retain key talent. | | Providing competitive compensation • maintain broad-based Employee Stock Purchase Plan ("ESPP") • expanded employee eligibility for annual equity awards and increased percentage of employees receiving equity awards • competitive family leave benefits • flexible paid time off for more than 98% of our workforce • perform annual pay equity assessment in the U.S. • retirement readiness program and benefits, including post-retirement equity vesting benefit Enabling growth, development, and recognition • cultivate talent from within, including training and internal mobility programs, early in career networking and development programs, management and leadership development programs, and coaching and mentoring programs • support for continuing education and tuition reimbursement • maintain leadership succession plans • peer and management-initiated awards to recognize employees who best exemplify our core values • patent incentive and distinguished engineer awards Engaging employees • regular employee engagement surveys on specific topics or focus areas, including integrity, inclusion,and sustainability • achieved participation rate of 84% for our fiscal 2024 employee engagement survey • engagement scores met or exceeded industry benchmarks | |
Cybersecurity and data privacy
| Refreshment • appointed new independent Chair of the Board in 2024 and changed chair of Audit Committee in January 2025 • appointed new independent directors in 2023, 2020, 2019, 2018, and 2017 Representation • ask directors to self-identify based on a range of characteristics, including gender, race, ethnicity, sexual orientation, and disability • female Board chair with deep Ciena knowledge and experience • three female directors and two ethnically diverse directors • two of three Board standing committee have female or ethnically diverse chairs Compensation • maintain limits on annual compensation for non-employee directors | | Outreach and engagement • regular outreach to stockholders on business and financial performance and industry dynamics • in the last 12 months, engaged with over half of our 25 largest stockholders • outreach to stockholders on our sustainability program Return of capital and dilution management • authorized $1 billion stock repurchase program in October 2024 • completed prior $1 billion stock repurchase program in fiscal 2024 • repurchase and retire shares to satisfy tax withholding on vesting of employee equity awards Market-standard proxy access and majority vote in uncontested elections | | Stock ownership guidelines • ownership requirements include 5x base salary for CEO and 5x cash retainer for non-employee directors • 50% holding requirement until relevant minimum ownership level is achieved Corporate governance review • Board regularly reviews and updates bylaws and Code of Ethics for Directors • annually update Principles of Corporate Governance and all Board Committee Charters • Board regularly reviews Code of Business Conduct and Ethics and Code of Conduct for Senior Financial Officers • adopted executive compensation clawback policy in fiscal 2023 | | Promote strong ethical business culture • promote a culture of integrity and measure success with regular employee surveys on compliance program, tone at the top, and managers • encourage employees to "speak up" and conduct managing with integrity programs to support our people managers • maintain several easily accessible internal and external methods by which our employees, business partners, and investors can report concerns relating to the ethical operation of our business, including anonymously as permitted • contractually require suppliers to adhere to principles in RBA Code of Conduct, including provisions of which that are derived from the UN Guiding Principles on Business and Human Rights • maintain a Human Rights Policy guided by international human rights standards encompassed by the United Nations Universal Declaration of Human Rights Corporate compliance governance • Program is overseen by a dedicated Compliance and Ethics function with regular reviews with Governance and Nominations Committee • Corporate Compliance Committee comprised of senior leaders promotes integrity and compliance leadership throughout Ciena |
Cybersecurity and data privacy
Compensation philosophy and objectives The Compensation Committee seeks to ensure that our compensation policies and practices promote stockholder interests and support our compensation objectives and philosophy. Ciena’s compensation program for our executive officers focuses on addressing the following principal objectives: attract and retain talented executive officers by offering competitive compensation packages; • motivate our executive officers to achieve strategic and tactical objectives, including the profitable growth of Ciena’s business; • align executive compensation with stockholder interests; • reward our executive officers for individual, functional and corporate performance; and • promote a pay-for-performance culture. In making compensation decisions, the Compensation Committee also seeks to promote teamwork among and high morale within our executive team. Compensation consultant To assist in carrying out its responsibilities, the Compensation Committee is authorized to retain the services of independent advisors. For purposes of advice and consultation with respect to the compensation of our executive officers during fiscal 2024, the Committee engaged Compensia, Inc. ("Compensia"), a national compensation consulting firm. Prior to engaging Compensia, the Committee considered and assessed Compensia’s independence. To ensure Compensia’s continued independence and to avoid any actual or apparent conflict of interest, the Committee does not permit Compensia to be engaged to perform any services for Ciena beyond those services provided to the Committee. The Committee has sole authority to retain or terminate Compensia as its executive compensation consultant and to approve its fees and other terms of engagement. The Committee regularly, but not less than annually, considers the independence of its compensation consultant and determines whether any related conflicts of interest require disclosure. In establishing executive compensation for fiscal 2024, the Compensation Committee relied upon Compensia to: • assist in the selection of a group of peer companies; • provide information on compensation paid by such peer companies to their executive officers; • analyze broad compensation survey data to supplement publicly available information on compensation paid by our peer companies; • advise on alternative structures or forms of compensation and allocation considerations; • advise on appropriate levels of compensation for the NEOs and the other members of the executive team; and • prepare "tally sheets" showing, for each executive officer, all elements of compensation received in previous fiscal years, equity grant details, the projected value of vested and unvested equity awards outstanding, and a comparative analysis of compensation relative to the peer group. In addition to its advisory work regarding executive compensation and broad-based equity compensation during fiscal 2024, Compensia was engaged by the Compensation Committee to aid in evaluating the compensation of the non-employee directors as set forth below, to participate in and provide assistance with respect to the Committee’s annual compensation risk assessment, and to review the "Compensation Discussion and Analysis" included in this proxy statement. Compensation Committee interlocks and insider participation Dr. Ahmed, Ms. Olsen, and Messrs. Claflin and Gallagher, who comprised the Compensation Committee as of the end of fiscal 2024, are independent directors and were not, at any time during fiscal 2024, or at any other time, officers or employees of Ciena. During fiscal 2024, no member of the Compensation Committee was an executive officer of another entity on whose compensation committee or board of directors an executive officer of Ciena served. Director compensation Our director compensation program is designed both to attract and to fairly compensate highly qualified, non-employee directors to represent our stockholders on the Board of Directors and to act in the stockholders’ best interests. The director compensation program for fiscal 2024 was recommended by the Compensation Committee and approved by our Board of Directors. Our executive officers do not play any role in determining or recommending the amount of non-employee director compensation, except that Mr. Smith and Dr. Nettles vote on the recommendations of the Compensation Committee in their capacities as members of the Board of Directors. Our Board of Directors includes two Ciena executive officers: Dr. Nettles, who served as our Executive Chair of the Board until December 2024, and Mr. Smith, who serves as our Chief Executive Officer. Dr. Nettles does not receive cash compensation for his service as a director, and Mr. Smith does not receive any compensation for his service as a director. Dr. Nettles has announced his intention to retire as of the end of his term and will not stand for reelection at the Annual Meeting. Information regarding equity compensation granted to Dr. Nettles during fiscal 2024 can be found in the tabular disclosure below. Information regarding the determination of Mr. Smith’s compensation can be found in the "Compensation Discussion and Analysis" and "Executive Compensation Tables" below. Fiscal 2024 Board compensation The Compensation Committee engaged Compensia to assist in evaluating the competitiveness of our director compensation program for the purpose of determining non-employee director compensation for fiscal 2024. As part of its process, the Compensation Committee considered an overview of the corporate governance environment, as well as recent trends and developments relating to non-employee director compensation. The Compensation Committee also specifically considered the amounts payable under and the various components of our director compensation program, the aggregate director compensation cost, in comparison to the boards of directors of the same group of peer companies that the Compensation Committee used in determining executive compensation, and the fact that changes were made to director compensation the prior year. After considering those factors and based on the recommendation of the Compensation Committee, the Board of Directors determined not to make any changes to director compensation for fiscal 2024.
Equity compensation
Equity compensation Our equity compensation program for our non-employee directors and Dr. Nettles for fiscal 2024 was as follows:
Equity compensation
| Equity Compensation | Target Delivered Value ($) | | Initial RSU Award — Upon Director Election or Appointment | $225,000 | | Annual RSU Award — Non-Employee Directors and Executive Chair | $225,000 |
Equity compensation
The actual number of shares underlying restricted stock unit ("RSU") awards granted to directors is determined based on the grant date fair value of the award. Initial equity awards are made in connection with initial election or appointment to the Board of Directors, with the target delivered value prorated for the fiscal year based on the date of election or appointment. Initial equity awards vest on or about the one-year anniversary of the grant date. Annual equity awards are made on the date of each Annual Meeting and vest on or about the one-year anniversary of the grant date. Vesting of the RSU awards is subject to acceleration upon the director’s death, disability, retirement, or upon or in connection with a change in control of Ciena. Delivery of the shares upon vesting is subject to any applicable instruction provided by the director under the Deferred Compensation Plan described below. In December 2024, in connection with the appointment of an independent Chair, the Board approved a new annual equity retainer of $100,000 in target delivered value for the independent Chair beginning in fiscal 2025.
Director compensation limits
Director compensation limits Our 2017 Omnibus Incentive Plan (the "2017 Plan") imposes a $500,000 limit on the compensation that can be awarded to a non-employee director in any given fiscal year, including the sum of (i) cash compensation and (ii) the grant date fair value of equity compensation under the 2017 Plan. This limitation, however, does not apply to the extent a non-employee director has been or becomes an employee of Ciena during such fiscal year. In addition, the Board retains discretion to provide further exceptions for one or more individual non-employee directors in extraordinary circumstances, such as service on a special transaction or litigation committee of the Board, provided that the director that is the subject of such exception may not participate in any decision with respect thereto. Director compensation table The following table and the accompanying footnotes describe the "total compensation" earned by our non-employee directors and Dr. Nettles during fiscal 2024:
Fiscal 2024 Director Compensation Table
Fiscal 2024 Director Compensation Table
Fiscal 2024 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | | Patrick H. Nettles, Ph.D. | — | $224,962 | $169,192 | $394,154 | | Hassan M. Ahmed, Ph.D. | $91,000 | $224,962 | — | $315,962 | | Bruce L. Claflin | $100,000 | $224,962 | — | $324,962 | | Lawton W. Fitt | $110,000 | $224,962 | — | $334,962 | | Patrick T. Gallagher | $135,000 | $224,962 | — | $359,962 | | Devinder Kumar | $90,000 | $224,962 | | $314,962 | | T. Michael Nevens | $90,000 | $224,962 | — | $314,962 | | Joanne B. Olsen | $106,000 | $224,962 | — | $330,962 | | Mary G. Puma | $90,000 | $224,962 | — | $314,962 |
Fiscal 2024 Director Compensation Table
(1) Reflects the aggregate dollar amount of all cash compensation earned for service as a director, including the retainers and meeting attendance fees described in "Cash Compensation" above. (2) The amounts set forth in the "Stock Awards" column represent the aggregate grant date fair value of RSU awards granted during fiscal 2024, computed in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718. The aggregate grant date fair value is calculated using the closing price of Ciena common stock on the grant date as if all of the shares underlying these awards were vested and delivered on the grant date. For each director, the aggregate grant date fair value in the above table was calculated using the closing price of Ciena common stock on March 21, 2024, the grant date for each such director’s annual award. Each of these awards was granted under the 2017 Plan and vests on the one-year anniversary of the grant date. The aggregate grant date fair values will likely vary from the actual amount ultimately realized by any director based on several factors, including the number of shares that ultimately vest, the effect of any deferral elections, the timing of any sale of shares, and the market price of Ciena common stock at the time of disposition. (3) Non-employee directors do not receive any perquisites or other personal benefits or property as part of their compensation. Dr. Nettles does not receive cash compensation for his service as a director; the amount reported as "All Other Compensation" for Dr. Nettles reflects (a) his annual base salary for service as an executive officer of Ciena during fiscal 2024 and (b) Section 401(k) plan matching contributions paid by Ciena and available to all full-time U.S. employees on the same terms. Outstanding equity awards for directors at fiscal year-end The following table sets forth, on an aggregate basis, information related to the outstanding unvested RSU awards held by each of our non-employee directors and Dr. Nettles as of the end of fiscal 2024.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End
| | Stock Awards | | Name | Aggregate Number of Unvested Shares or Units (#) | | Patrick H. Nettles, Ph.D. | 4,438 | | Hassan M. Ahmed, Ph.D. | 4,438 | | Bruce L. Claflin | 4,438 | | Lawton W. Fitt | 4,438 | | Patrick T. Gallagher | 4,438 | | Devinder Kumar | 4,438 | | T. Michael Nevens | 4,438 | | Joanne B. Olsen | 4,438 | | Mary G. Puma | 4,438 |
Outstanding Equity Awards at Fiscal Year-End
Deferral of director compensation We maintain the Ciena Corporation Deferred Compensation Plan (the "Deferred Compensation Plan"), which allows our U.S.-based directors (as well as certain U.S.-based senior management employees) to defer elements of their annual compensation. Directors may defer up to 100% of their annual cash retainer and annual equity compensation. Generally, deferral elections may only be made for awards to be granted in a subsequent calendar year. Directors can elect the amount deferred, the deferral period, and the form of distribution of their compensation. If a director elects to defer any portion of an RSU award, upon the vesting of that award, we credit a stock account with the amount deferred. All such accounts are distributed in shares of Ciena common stock. Distributions may be made in a lump sum or installments, as designated by the participating director, subject to early distribution of vested awards in a lump sum in the event of the participant’s death or termination of service, a change in control of Ciena or termination of the plan. Ratification of appointment of independent registered public accounting firm The Audit Committee of the Board of Directors has appointed PricewaterhouseCoopers LLP ("PwC") to serve as our independent registered public accounting firm to audit Ciena’s consolidated financial statements for fiscal 2025, and is asking stockholders to ratify this appointment at the Annual Meeting. PwC has audited our consolidated financial statements annually since Ciena’s incorporation in 1992. A representative of PwC is expected to attend this year’s Annual Meeting. He or she will have the opportunity to make a statement, if desired, and will be available to respond to appropriate questions. In making its recommendation to the Board of Directors to select PwC as Ciena’s independent registered public accounting firm for fiscal 2025, the Audit Committee considered the benefits of having an independent registered public accounting firm with extensive history with us, the quality of PwC’s services, the quality and candor of PwC's communications with the Audit Committee and management, whether the non-audit services provided by PwC are compatible with maintaining the independence of PwC, and the potential impact to Ciena of a change to its independent registered public accounting firm, including the attention and resources needed to onboard a new accounting firm. The Audit Committee also considered how effectively PwC maintained its independence and employed independent judgment, objectivity and professional approach and skepticism, the level of engagement provided by PwC's national office, the depth and industry experience of the PwC team, the quality of insight demonstrated in PwC's review of our assessment of internal control over financial reporting, and the appropriateness of PwC's fees. Following consideration of these factors, the Audit Committee determined that retention of PwC is in the best interests of Ciena and its stockholders. Information regarding fees billed by PwC for our 2023 and 2024 fiscal years is set forth under "Relationship with Independent Registered Public Accounting Firm" below. Our bylaws do not require that stockholders ratify the appointment of our independent registered public accounting firm. We are seeking ratification because we believe it is a matter of good corporate governance. In the event that stockholders fail to ratify the appointment, the Audit Committee will reconsider whether to retain PwC, but may ultimately determine to retain PwC as our independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee, in its sole discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that it is advisable to do so. A representative of PwC is expected to attend this year’s Annual Meeting. He or she will have the opportunity to make a statement, if desired, and will be available to respond to appropriate questions.
Outstanding Equity Awards at Fiscal Year-End
| The Board of Directors recommends that you vote FOR the ratification of the appointment of PwC as our independent registered public accounting firm for fiscal 2025 |
Outstanding Equity Awards at Fiscal Year-End
Relationship with independent registered public accounting firm The following table shows the fees that PwC billed to Ciena for professional services rendered for fiscal 2023 and 2024.
Outstanding Equity Awards at Fiscal Year-End
| Fee Category | Fiscal 2023 | Fiscal 2024 | | Audit Fees | $4,482,415 | $4,484,000 | | Audit-Related Fees | — | — | | Tax Fees | 761,102 | 636,791 | | All Other Fees | 954 | 177,000 | | Total Fees | $5,244,471 | $5,297,791 |
Outstanding Equity Awards at Fiscal Year-End
Audit Fees. This category of the table above includes fees for the integrated audit of our annual financial statements, review of financial statements included in our quarterly reports on Form 10-Q, and services that are normally provided by PwC in connection with statutory and regulatory filings or engagements, and services that generally only PwC as the independent registered public accounting firm can provide, such as services for comfort letters and consents. The preparation of Ciena’s audited financial statements includes compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and the preparation by PwC of a report expressing its opinion regarding the effectiveness of our internal control over financial reporting. Audit fees reflect PwC’s integrated audits of financial statements. Audit-Related Fees. This category of the table above includes fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not included above under "Audit Fees." Tax Fees. This category of the table above includes fees for tax compliance, tax advice, tax planning, and other general tax consulting fees. Fees for fiscal 2023 and 2024 primarily include fees related to a study related to research and development tax credits in relevant geographies and tax services related to assistance with identification and computation of Section 174 expenditures. All Other Fees. This category of the table above includes fees for services provided by PwC that are not included in the other fee categories reported above. All other fees for fiscal 2023 and 2024 relate to subscription fees paid for access to online accounting disclosure research software. All other fees for fiscal 2024 also include review of cybersecurity controls. Pre-approval of services The Audit Committee pre-approves all services provided by our independent registered public accounting firm, including audit services (such as statutory audit engagements as required under local law of foreign jurisdictions) and non-audit services. For audit services with respect to Ciena, each year our independent registered public accounting firm provides the Audit Committee with an engagement letter outlining the scope of the audit services proposed to be performed during the year, which must be accepted by the Audit Committee before the audit commences. Our independent registered public accounting firm also submits an audit services fee proposal, which must be approved by the Audit Committee before the audit commences. Each year, management also submits to the Audit Committee certain non-audit services for which it recommends the independent registered public accounting firm be engaged to provide, and an estimate of the fees to be paid for each. Management and the independent registered public accounting firm must each confirm to the Audit Committee that the performance of the non-audit services on the list would not compromise the independence of our registered public accounting firm and would be permissible under applicable legal requirements. The Audit Committee must approve both the list of non-audit services and the budget for each such service before commencement of the work. Our management and our independent registered public accounting firm report to the Audit Committee at each of its regular meetings as to the non-audit services actually provided by the independent registered public accounting firm and the approximate fees incurred by Ciena for those services. To ensure prompt handling of unexpected matters, the Audit Committee has authorized its Chair to amend or modify the list of approved permissible non-audit services and fees. If the Chair exercises this delegation of authority, he reports the action taken to the Audit Committee at its next regular meeting. In compliance with the Audit Committee’s internal policy and auditor independence rules of the SEC, all audit and permissible non-audit services provided by PwC to Ciena for the fiscal years 2023 and 2024 were pre-approved by the Audit Committee.
Outstanding Equity Awards at Fiscal Year-End
| Audit Committee Report | | The Audit Committee is composed entirely of non-management directors. The members of the Audit Committee meet the independence and financial literacy requirements of the NYSE and additional, heightened independence criteria applicable to members of the Audit Committee under SEC and NYSE rules. The Audit Committee assists the Board in fulfilling its oversight responsibilities, including by assessing and monitoring the quality and integrity of Ciena’s accounting systems and practices, financial information and financial reporting practices, potential financial, legal and regulatory exposures, systems of internal controls, internal audit function and the independent audit process. Ciena’s management is responsible for Ciena’s financial statements, and its independent registered public accounting firm is responsible for planning and conducting an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Audit Committee operates under a written charter that describes the scope of its responsibilities, and which is available on the "Corporate Responsibility – Governance Documents" page of the "Investors" section at www.ciena.com. During fiscal 2024, the Audit Committee discussed with PricewaterhouseCoopers LLP ("PwC"), Ciena’s independent registered public accounting firm, the overall scope and plans for the audit. The Audit Committee met regularly with PwC, with and, at times, without management present, to discuss the results of PwC’s examinations, evaluations of Ciena’s internal control over financial reporting and the overall quality of Ciena’s financial reporting practices. The Audit Committee also met with Ciena’s management during fiscal 2024 to consider Ciena’s internal control over financial reporting and Ciena’s disclosure controls and procedures. In this context, the Audit Committee hereby reports as follows: 1. The Audit Committee has reviewed and discussed Ciena’s audited financial statements for fiscal 2024 with management and with PwC. 2. The Audit Committee has discussed with PwC the matters required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board ("PCAOB") and the SEC. 3. The Audit Committee has received from PwC the written disclosures and the letter required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence, and has discussed with PwC its independence. 4. Based on its review and discussions described in this report, the Audit Committee recommended to the Board of Directors that the audited financial statements for fiscal 2024 be included in Ciena’s Annual Report on Form 10-K for fiscal 2024, for filing with the SEC. Submitted by the members of the Audit Committee: Devinder Kumar (Chair) Bruce L. Claflin Lawton W. Fitt T. Michael Nevens Mary G. Puma |
Outstanding Equity Awards at Fiscal Year-End
Ownership of securities The following table sets forth, as of January 27, 2025, the beneficial ownership of Ciena’s common stock for the following persons: each stockholder (including any group as such term is used in Section 13(d)(3) of the Exchange Act) known by us to beneficially own more than 5% of our common stock; • our Chief Executive Officer and each other named executive officer (as that term is defined in Item 402(a)(3) of Regulation S-K); • each of our directors and director nominees; and • all of our directors and executive officers as a group. Certain information in the table concerning beneficial owners other than our directors and executive officers is based on information contained in filings made by such beneficial owners with the SEC. Under SEC rules, beneficial ownership of a class of capital stock includes any shares of such class as to which a person, directly or indirectly, has or shares voting power or investment power and also any shares as to which a person has the right to acquire such voting or investment power within 60 days through the exercise or conversion of any stock option, stock award, or other similar right. If two or more persons share voting power or investment power with respect to specific securities, each such person is deemed to be the beneficial owner of such securities. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of such acquisition rights. As a result, the percentage of outstanding shares held by any person in the table below does not necessarily reflect the person’s actual voting power. As of January 27, 2025, there were 142,591,833 shares of Ciena common stock outstanding.
Outstanding Equity Awards at Fiscal Year-End
| Name of Beneficial Owner | Number of Shares Owned (1) | Right to Acquire (2) | Beneficial Ownership Total (3) | Percent of Outstanding Shares (%) | | More than 5% Stockholders | | | | | | FMR LLC (4) | 21,664,064 | — | 21,664,064 | 15.19% | | BlackRock, Inc. (5) | 16,296,261 | — | 16,296,261 | 11.43% | | The Vanguard Group, Inc. (6) | 15,026,070 | — | 15,026,070 | 10.54% | | Directors & Named Executive Officers | | | | | | Gary B. Smith | 206,262 | 19,298 | 225,560 | * | | James E. Moylan, Jr. (7) | 282,746 | 4,931 | 287,677 | * | | Dino DiPerna | 4,180 | 3,963 | 8,143 | * | | Jason M. Phipps | 47,162 | 5,816 | 52,978 | * | | David M. Rothenstein | 156,551 | 5,221 | 161,772 | * | | Hassan M. Ahmed, Ph.D. | 15,244 | 4,438 | 19,682 | * | | Bruce L. Claflin (8) | 23,983 | 46,500 | 70,483 | * | | Lawton W. Fitt | 3,928 | 119,915 | 123,843 | * | | Patrick T. Gallagher | 35,779 | 22,285 | 58,064 | * | | Devinder Kumar | 2,929 | 22,285 | 25,214 | * | | Patrick H. Nettles, Ph.D. (9) | 155,958 | 10,938 | 166,896 | * | | T. Michael Nevens | 15,570 | 4,438 | 20,008 | * | | Joanne B. Olsen | 8,375 | 1,484 | 9,859 | * | | Mary G. Puma | 2,696 | 4,438 | 7,134 | * | | All executive officers and directors (17 persons) | 1,033,145 | 287,250 | 1,320,395 | * |
Outstanding Equity Awards at Fiscal Year-End
* Represents less than 1% of outstanding shares. (1) Excludes shares that may be acquired through the exercise of stock options, the vesting of restricted stock units or other convertible equity incentive awards. (2) Except as otherwise set forth in the footnotes below, for our executive officers, represents shares of common stock that can be acquired upon the vesting of restricted stock units within 60 days of the date of this table. For our executive officers and directors, amounts reported also include shares underlying vested restricted stock units deferred pursuant to our Deferred Compensation Plan. None of our executive officers or directors holds outstanding stock options. (3) Except as indicated in the footnotes to this table or as set forth in the SEC reports identified below, we believe the persons named in this table, based on information they have furnished to us or the SEC, have sole voting and investment power with respect to all shares of common stock reported as beneficially owned by them, subject to community property laws where applicable. Stockholder’s address is 245 Summer Street, Boston, Massachusetts 02210. Ownership information is based solely on a Schedule 13G filed by stockholder with the SEC on November 12, 2024 and reflects beneficial ownership by stockholder in its capacity as investment advisor and with respect to certain of its subsidiaries. Stockholder has sole voting power with respect to 21,652,221 shares, shared voting power with respect to 0 shares, sole dispositive power with respect to 21,664,064 shares and shared dispositive power with respect to 0 shares. Stockholder’s address is 50 Hudson Yards, New York, NY 10001. Ownership information is based solely on a Schedule 13G/A filed by stockholder with the SEC on January 30, 2024 and reflects beneficial ownership by stockholder in its capacity as a parent holding company and with respect to certain of its subsidiaries. Stockholder has sole voting power with respect to 15,681,127 shares and sole dispositive power with respect to 16,296,261 shares. (6) Stockholder’s address is 100 Vanguard Blvd, Malvern, PA 19355. Ownership information is based solely on a Schedule 13G/A filed by stockholder with the SEC on February 13, 2024 and reflects beneficial ownership by stockholder in its capacity as investment advisor and with respect to certain of its subsidiaries. Stockholder has sole voting power with respect to 0 shares, shared voting power with respect to 52,836 shares, sole dispositive power with respect to 14,816,955 shares and shared dispositive power with respect to 209,115 shares. (7) Beneficial ownership includes 152,120 shares held in a trust of which Mr. Moylan’s spouse is the beneficiary. Mr. Moylan disclaims beneficial ownership of the securities held by the trust. (8) Beneficial ownership includes 11,136 shares held in a trust of which Mr. Claflin’s spouse and children are the beneficiaries. Mr. Claflin disclaims beneficial ownership of the securities held by the trust. (9) Voting and investment power is shared with spouse. Delinquent Section 16(a) reports Section 16(a) of the Exchange Act requires Ciena’s executive officers, directors, and beneficial owners of more than 10% of our common stock to file reports with the SEC indicating their holdings of, and transactions in, Ciena’s equity securities. Based on a review of these reports as filed electronically with the SEC together with written representations by our executive officers and directors, we believe that all of our executive officers, directors, and 10% owners timely complied with all Section 16(a) filing requirements for fiscal 2024, except for one late Form 4 for Gary B. Smith and two late Forms 4 for each of Joseph Cumello and David M. Rothenstein, in each case with respect to one transaction, two late Forms 4 for Dino DiPerna, one with respect to one transaction and another with respect to five transactions to withhold shares for the payment of taxes upon vesting of RSU awards that had occurred on one date and one late Form 4 for Andrew Petrik with respect to four transactions to withhold shares for the payment of taxes upon vesting of RSU awards that had occurred on the same date as Mr. DiPerna’s withholdings. Compensation Discussion and Analysis
Outstanding Equity Awards at Fiscal Year-End
| Executive summary | 34 | This Compensation Discussion and Analysis describes our executive compensation program, the compensation-setting process followed by the Compensation Committee of the Board of Directors (as used in this section, the "Committee"), and the compensation of our NEOs for fiscal 2024: | | | Fiscal 2024 compensation overview | 35 | | | | Decision-making framework | | | | | Executive compensation best practices | 36 | | Gary B. Smith President and CEO | | Participants in compensation-setting process | 36 | | | | Comparative framework | 37 | | | | Qualitative factors | 38 | | | | Elements of compensation | | | | | Principal elements of compensation | 40 | | | | Pay mix | 41 | | | | Cash compensation | | | James E. Moylan, Jr. Senior Vice President and Chief Financial Officer | | Base salary | 41 | | | | Annual cash incentive opportunity | 42 | | | | Target total cash compensation opportunity | 42 | | | | Annual cash incentive bonus plan | 42 | | | | Attainment of fiscal 2024 cash incentive bonus | 44 | | | | Equity compensation | | | | | Factors and process in determining equity awards | 45 | | Dino DiPerna Senior Vice President, Global Research & Development | | Equity awards | 45 | | | | Attainment of fiscal 2024 PSUs | 48 | | | | Attainment of fiscal 2022 MSUs | 49 | | | | Equity award practices | 49 | | | | Other program elements and pay practices | | | | | Risk assessment of compensation practices | 50 | | | | Stock ownership guidelines | 50 | | Jason M. Phipps Senior Vice President, Global Customer Engagement | | Deferred Compensation Plan | 51 | | | | U.S. Executive Severance Benefit Plan | 51 | | | | Change in control severance agreements | 51 | | | | Clawback policy and provisions | 51 | | | | Perquisites policy | 52 | | | | Retirement benefits | 52 | | | | Required reimbursement policy | 52 | | | | Anti-hedging and pledging policy | 53 | | David M. Rothenstein Senior Vice President, Chief Strategy Officer and Secretary | | Contained below and elsewhere in this proxy statement are certain non-GAAP measures of Ciena’s financial performance for fiscal 2023 and 2024. These measures, along with their corresponding GAAP measures and reconciliations thereto, have been previously disclosed in exhibits to Ciena’s Current Report on Form 8-K furnished with the SEC on December 12, 2024. Also see "Non-GAAP Measures" below for more information on the use of these measures. | | | |
Outstanding Equity Awards at Fiscal Year-End
Executive summary
Outstanding Equity Awards at Fiscal Year-End
| FISCAL 2024 EXECUTIVE COMPENSATION | | FISCAL 2024 BUSINESS PERFORMANCE | | | ❖ | 82% of CEO target total direct compensation was in the form of equity awards and 60% was "at risk" and performance-based | ❖ | Delivered revenue of $4.01 billion | | | | ❖ | Generated record revenue of $1.2 billion from cloud provider customers | | ❖ | Did not increase the base salary or target annual cash incentive opportunity (expressed as a percentage of base salary) for our CEO | | | | | | ❖ | Ended the fiscal year with approximately $1.33 billion in cash and investments | | ❖ | Increased the base salaries of all NEOs other than the CEO in part to improve alignment with the market | ❖ | Continued to deliver industry-leading innovation: | | | | | • Introduced WaveLogic 6 Extreme,the industry’s first 1.6T single wavelength coherent solution | | ❖ | Did not increase the target annual cash incentive opportunity for any NEOs other than Mr. DiPerna, whose increase reflects his promotion to executive officer of Ciena and the significant expansion of his role leading our Global R&D function commencing in fiscal 2024 | | • Added 60 new customers for WaveLogic 5 Extreme | | | | | • Continued momentum with our 400G ZR/ZR+ coherent pluggables portfolio, including design wins with three cloud providers | | | | ❖ | Expanded our WaveRouter coherent routing family with WaveRouter 2 and WaveRouter 7, bringing our portfolio of coherent routers to 16 total | | ❖ | Retained the previous target delivered value of annual equity awards for our CEO and CFO, and increased the target delivered value of annual equity awards for the other NEOs to improve alignment with the market | | | | | | ❖ | Repurchased $250 million of shares, completing our three-year $1 billion stock repurchase program, and announced a new three-year $1 billion stock repurchase program for fiscal 2025 through 2027 | | ❖ | Incentive program outcomes were aligned with business performance below our 2024 plan, resulting in NEOs earning annual cash incentive awards at 65% of target and PSUs at 40% of target | | | | | | ❖ | Released an updated Sustainability Report and continued to work towards our science-based greenhouse gas emissions targets | | ❖ | Due to outperformance of Ciena's TSR relative to a comparison index for the relevant performance period (fiscal 2022-2024), the NEOs earned MSUs awarded in December 2021 at 110% of target | | |
Alignment of incentive program outcomes with performance
Alignment of incentive program outcomes with performance The combination of Ciena's TSR outperformance relative to a comparison index and the performance outcomes related to cash incentive awards and PSUs described below illustrate the Committee's robust goal setting approach and alignment of company performance with executive compensation.
Alignment of incentive program outcomes with performance
| | Percent (%) of target earned | Explanation | | Cash incentive award | 65% | Based on revenue and adjusted operating income performance substantially lower than our 2024 plan | | PSUs | 40% | Performance impacted by reduced sales order flow, in part due to service provider customers taking longer than expected to work through their high levels of inventory, and earnings per share below the minimum performance threshold as a result of lower revenue described above | | MSUs (fiscal 2022-2024) | 110% | Ciena's TSR outperformed the index TSR by 4.79% |
2024 say-on-pay results
| Base salaries | Equity award structure | | Did not increase the base salary of our CEO Increased the base salaries of other NEOs to improve alignment with the market for their positions and in recognition of the criticality of their roles | Continued mix of performance-based and time-based equity awards, with approximately 60% of the target award value for our CEO, and 50% of the target award value for the other NEOs, allocated to at-risk, performance-based equity in the form of PSUs and MSUs | | Target cash incentives | Equity award values | | Did not increase the target cash incentive opportunities (expressed as a percentage of base salary) for our CEO or other NEOs (other than Mr. DiPerna, whose increase reflects his promotion to executive officer and a significant expansion of his role to lead our Global R&D function) | Provided reasonable increases in the target value of annual equity awards for certain of our NEOs to improve alignment with the market and stockholder interests and to maintain retention |
2024 say-on-pay results
| | | | of our CEO’s target total direct compensation was in the form of equity awards | of our CEO’s target total direct compensation was "at-risk" based on our performance against measurable objectives |
2024 say-on-pay results
| WHAT WE DO | | WHAT WE DON’T DO | | | | Ensure independence in establishing our executive compensation program | | Offer income tax gross-ups | | | | | Permit "single trigger" change in control benefits | | | Align pay with performance and stockholder interests | | Provide excise tax gross-ups | | | Use balanced performance metrics that consider both absolute and relative performance | | Allow for hedging or pledging of company securities | | | | | Provide NEO employment agreements | | | Maintain stock ownership requirements | | Pay dividends or dividend equivalents on unearned or unvested equity awards | | | Minimum holding period of one year after exercise of options and SARs for CEO | | | | | | | Provide excessive perquisites, severance, or personal benefits | | | Use rigorous performance goals | | | | | Maintain a compensation recovery ("clawback") policy that complies with applicable NYSE listing standards and broader clawback provisions in our 2017 Plan | | Provide multi-year guarantees for salary increases, bonuses, or equity compensation | | | | | Have "evergreen" replenishment of the shares under our 2017 Plan | | | Assess risks relating to our executive compensation program at least annually | | | | | Use tally sheets to provide holistic visibility of all pay elements under a variety of performance assumptions in one place | | | | | Conduct an annual say-on-pay vote and consider stockholder input on executive compensation | | |
2024 say-on-pay results
Participants in compensation-setting process Compensation Committee. The Committee oversees Ciena’s compensation programs and has final authority to approve and make decisions with respect to the compensation of Ciena’s executive officers. For a discussion regarding the Committee’s compensation philosophy and the principal objectives of our compensation programs, see "Corporate Governance and the Board of Directors – Composition and Meetings of the Board of Directors and its Committees – Compensation Committee" above. Independent Compensation Consultant. In its annual review and determination of executive compensation, the Committee is assisted by Compensia. Compensia is engaged by the Committee and, in order to maintain its independence, does not perform additional consulting or other services for Ciena or its management. The Committee assesses the independence of its compensation advisor on an annual basis. For a discussion regarding Compensia, the scope of its engagement by the Committee and its involvement in our compensation-setting process, see "Corporate Governance and the Board of Directors – Composition and Meetings of the Board of Directors and its Committees – Compensation Committee" above. Chief Executive Officer. Our executive officers, including our CEO and our former Executive Chair, do not participate in the determination of their own compensation. Our CEO works with the Chair of the Committee to develop proposed compensation packages for our other executive officers, including the other NEOs. Based on his review and assessment of each executive officer’s overall performance, success in executing against corporate and functional goals, criticality of function, experience, expertise, retention concerns, existing equity holdings, and compensation relative to other executive officers, as well as the Market Data (as defined below), our CEO provides recommendations to the Committee with respect to the base salary, target bonus percentage, and annual equity award for each executive officer. Because our CEO works most closely with and supervises our executive team, the Committee believes that his input provides critical insight in evaluating their performance. Our CEO also provides the Committee with additional information regarding the effect of market or competitive forces, changes in strategy or priorities upon an individual’s performance, and any other specific challenges faced or overcome by each person or the function that they lead during the prior fiscal year. Comparative framework Peer Group. To assist the Committee in the selection of a group of peer companies against which to compare existing and proposed executive compensation levels for fiscal 2024, Compensia used several quantitative and qualitative criteria, including the primary selection and refinement criteria listed below, which were identical to those used in recent years, to review existing and potential peer group companies. Compensia noted its view that, given the limited number of similarly sized business competitors due to industry consolidation, the revenue criterion has the highest relevance in selecting peer companies for purposes of comparing compensation. Following Compensia’s analysis, the Committee noted that in recent years, the Committee had increased the overall size of the peer group in order to provide a broader data set and avoid the overinfluence of any one company, and to better balance Ciena’s positioning with respect to the revenue and market capitalization criteria. The Committee also noted that, for the prior two years, there was no need to remove any members of the existing peer group due to either merger or acquisition, or falling significantly outside of the Committee’s target ranges for the key criteria. In connection with Compensia's analysis, the Committee: ❖ Removed two companies from the existing peer group: Citrix Systems due to its recent acquisition and EchoStar due to its increased distance from industry fit and falling out of the target ranges of certain criteria. ❖ Added three new companies: Calix, Extreme Networks and Nutanix, in order to retain the peer group size and to address Ciena's positioning with respect to the revenue and market capitalization criteria. Based on this analysis and the selection process set forth below, the Committee determined that the following peer group constituted an appropriate comparative reference for determining executive compensation in fiscal 2024 (the "Peer Group"):
2024 say-on-pay results
| Fiscal 2023 Peer Group | Primary Selection Criteria | Refinement Criteria | Fiscal 2024 Peer Group | | Akamai Technologies Arista Networks Cadence Design Systems Citrix Systems Coherent Corp (formerly II-VI) CommScope EchoStar F5 Networks Juniper Networks Keysight Technologies Logitech Lumentum Motorola Solutions NetApp Sanmina Synopsys ViaSat Zebra Technologies | U.S.-based publicly traded companies in technology industry Revenue of between one-half to approximately two times our size Market capitalization of between one-quarter to approximately four times our size Communications equipment, systems software, application software or Internet software and services industries | Key business and/or executive labor market competitor Employee headcount Peers of current and suggested peers Companies listed as peers by ISS | Akamai Technologies Arista Networks Cadence Design Systems Calix CommScope Coherent Corp Extreme Networks F5 Networks Juniper Networks Keysight Technologies Logitech Lumentum Motorola Solutions NetApp Nutanix Sanmina Synopsys ViaSat Zebra Technologies |
Peer Group comparison
Peer Group comparison
Peer Group comparison
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Peer Group comparison
The Committee noted that Ciena was generally aligned with the medians of the Peer Group for the revenue criterion (43%), the market capitalization criterion (40%), and the headcount criterion (40%), and below the median of the Peer Group for the operating income criterion (26%). The Committee believed that this represented a reasonable and appropriate balance among the key quantitative criteria, particularly given its view that revenue has the highest relevance in selecting peer companies for purposes of comparing compensation. The Committee also considered the criteria used by ISS and the degree of overlap between Ciena’s existing Peer Group and ISS’s recommended peer group of companies. Market Data. As a comparative framework for the Committee to use in establishing executive compensation for our NEOs, Compensia assembles and analyzes compensation data from public filings, data provided by the Radford High Technology Executive Compensation Survey, and other published market data relating to comparable executive positions in the Peer Group (collectively, the "Market Data"). In considering the Market Data, the Committee recognizes that executive officers in different companies can play different roles, with different responsibilities and scopes of work, even though they may hold similar titles or nominal positions. Moreover, qualitative factors that influence compensation, such as each executive officer’s performance during the period under consideration or their criticality to their respective companies’ business, strategy and objectives are not easily discernible from the Market Data. Accordingly, the Market Data is just one of a number of factors used by the Committee in determining executive compensation and it serves as a frame of reference for compensation. Qualitative factors In any given year, and for any particular NEO, the Committee may consider a range of subjective or qualitative factors in setting the NEOs’ compensation, including: ❖ our CEO’s recommendations and his assessment of the executive’s performance; ❖ the role the executive plays and the importance of such individual to Ciena’s business strategy and objectives; ❖ differences in each executive’s tenure and experience; ❖ the responsibilities and particular nature of the functions performed or managed by the executive; ❖ ensuring achievement of retention and motivation objectives; and ❖ the likely cost and difficulty that would be encountered in recruiting a replacement. The Committee’s consideration of any particular factor may range from inapplicable to significant, depending upon the individual and period under consideration. The Committee does not assign relative weights or rankings to such factors. Rather, the Committee relies upon its members’ knowledge and judgment in assessing the various qualitative and quantitative inputs it receives as to each individual and makes compensation decisions accordingly. In determining fiscal 2024 executive compensation, and in addition to the assessment of the Market Data and other specific factors described in the below discussion of the individual elements of compensation, the Committee broadly considered the following qualitative factors in making its compensation decisions for each NEO. Given their tenure, track record and experience, the Committee considered the NEOs to be highly desirable executives and thus potential candidates for recruitment by other companies.
Peer Group comparison
| | Gary B. Smith | | | ❖ Mr. Smith is one of the longest-tenured CEOs in the telecommunications industry, having successfully served as our CEO for over 24 years. He continued to demonstrate outstanding strategic leadership of and direction for Ciena. This included strong leadership of our executive team through a period of significant change among the leadership team and leadership of our company, which delivered a solid financial performance and important advances in the execution of its strategy. Specifically, he maintained Ciena’s focus on the long-term priorities of expanding leadership in optical networking, growing our addressable market, driving software-led transformation, and delivering innovative global services. He also ensured that we remained committed to our People Promise by focusing on the wellbeing of our people and their overall growth and development. |
Peer Group comparison
| | James E. Moylan, Jr. | | | ❖ In his long-standing role as our CFO, Mr. Moylan continued to maintain excellent relationships with the financial community and our stockholders. He provided effective management and leadership over a wide range of organizations, including finance and accounting, global business operations, information technology, information and cybersecurity, internal audit, investor relations, tax and treasury. He supervised the continued strengthening of our balance sheet, including the completion of our $1 billion stock repurchase program. Mr. Moylan also continued to serve as the executive sponsor of several cross-functional initiatives to drive greater levels of digital transformation and integrated business processes within Ciena. On August 28, 2024, Mr. Moylan provided notice of his decision to retire in 12 months, effective August 28, 2025. Ciena is currently conducting a search process to identify a successor. Mr. Moylan will continue to serve as CFO until a successor is in place and his responsibilities are transitioned. |
Peer Group comparison
| | Dino DiPerna | | | ❖ Mr. DiPerna became an executive officer and assumed a larger role leading our Global Research and Development organization entering fiscal 2024. Under Mr. DiPerna’s leadership, Ciena created a new function combining under one organization its significant global development resources and initiatives across our optical networking, routing and switching and network control and planning solutions. This change, which involved navigating new organizational models and leadership roles, enables Ciena to drive greater operational efficiency and collaboration across its team of more than 3,500 research and development professionals executing on Ciena’s research and development strategy. Among his many achievements, Mr. DiPerna led the successful development of Ciena’s WaveLogic 6 technology, the introduction of new WaveRouter solutions and significant advances that position Ciena’s interconnects portfolio to seize on opportunities in and around the data center. |
Peer Group comparison
| | Jason M. Phipps | | | ❖ Mr. Phipps led our Global Customer Engagement organization through a period of considerable industry volatility and uncertainty to achieve continued strong customer engagement and collaboration, to grow our order volumes and to deliver against elevated backlog levels. Mr. Phipps oversaw significant expansion of our sales to cloud providers, including record revenue contribution during fiscal 2024. He also took on added responsibility during fiscal 2024, overseeing our Global Services organization, which significantly contributed to our business diversification. He supported initiatives to enhance our customer engagement model and virtual customer collaboration tools. He also continued to focus on expanding our internal go-to-market resources in the areas of IP and automation. |
Peer Group comparison
| | David M. Rothenstein | | | ❖ In his role as Chief Strategy Officer, Mr. Rothenstein demonstrated strong performance across a range of areas, including: developing and implementing a new structure and planning process for our three-year strategic plan; establishing a comprehensive corporate strategic scorecard; evaluating and actioning several strategic investment decisions; serving as a corporate spokesperson with the financial community; leading the effort to rationalize and optimize our real estate portfolio; and progressing our various sustainability initiatives. In addition, as Corporate Secretary, Mr. Rothenstein continued to manage effectively the work plan for and the engagement with our Board of Directors. |
Peer Group comparison
Internal equity. The Committee seeks to promote strong teamwork and high morale within our executive team. While the Committee does not use any quantitative formula or multiple for comparing or establishing compensation among our executive officers, it is mindful of internal pay equity considerations, and assesses the relationship of the compensation of each executive officer to other members of the executive team. Each fiscal year, the Committee also considers, on a relative basis, the aggregate portion of equity awards, in terms of economic value and allocation of shares, made to the executive team, in comparison to other eligible employees. Elements of compensation Principal elements of compensation The principal elements of compensation of our executive officers, including our NEOs, include:
Peer Group comparison
| Element | Type | Form | Key Characteristics | Purpose | | Base Salary | Fixed | Cash | Annual adjustments based on individual and company performance, pay level relative to market and internal pay equity | Attracts, retains and rewards NEOs by providing a competitive fixed amount of compensation for service that reflects skill, responsibility and experience | | Annual Cash Incentive | Variable | Cash | Variable cash compensation, based on pre-established financial, strategic and operational goals and individual performance | Focuses NEOs on achievement of our short-term financial, strategic, and operational goals Aligns interests of NEOs with stockholders by promoting revenue and operating income growth and achievement of other key corporate objectives | | Long-Term Equity Incentive | Variable | Restricted Stock Units | RSU equity awards vest based on continued service in quarterly increments over a four-year period | Aligns NEO and stockholder interests Motivates and rewards NEOs for the achievement of goals that are aligned with our strategic plan or indicators of long-term corporate performance Retains NEOs through multiyear vesting of equity awards and performance periods | | | | Performance Stock Units | PSU equity awards earned based on pre-established financial goals have a one year performance period and vest in equal increments over two years following the date of grant | | | | | Market Stock Units | MSU equity awards earned based on Ciena TSR relative to an identified median company from a comparison index over a three-year performance period, and vest in full at end of that period | |
Peer Group comparison
We also provide market-aligned severance and change in control related payments and benefits for our NEOs, and other benefits such as a 401(k) plan, health and wellness benefits including an annual physical examination, and financial planning and tax preparation services. In addition, our NEOs participate in the Deferred Compensation Plan available to other senior management employees and standard employee benefit plans and programs available to our other employees. Pay mix In determining the mix of compensation among these elements, the Committee does not assign specific ratios or other relative measures that dictate the total compensation mix to be awarded or targeted to the executive team, or the portion that is either at-risk or otherwise subject to performance. Nevertheless, as illustrated by the charts below, the Committee continued to structure executive compensation in fiscal 2024 so that a significant portion of the target total direct compensation of our CEO and the other NEOs was "at-risk" or performance-based, with the actual value realized subject to the achievement of short-term or long-term corporate and financial performance goals. Approximately 60% of our CEO’s target total direct compensation for fiscal 2024 was structured as "at-risk" performance-based compensation. By linking a significant portion of our executives’ compensation to performance, the Committee emphasized incentive-based variable pay, which is consistent with our pay-for-performance philosophy and creates a strong alignment with long-term stockholder value.
Peer Group comparison
| CEO fiscal 2024 target total direct compensation mix | | Average non-CEO NEO fiscal 2024 target total direct compensation mix | | | | |
Peer Group comparison
Target total direct compensation reflects annual base salary, target annual cash incentive opportunity and grant date fair value of fiscal 2024 equity awards. Cash compensation Base salary In determining base salaries for fiscal 2024, the Committee considered the Market Data, market medians of equivalent positions, anticipated merit increases by peer companies, and the ongoing criticality of the NEOs' respective roles. In addition, the Committee considered Mr. DiPerna's promotion to executive officer and the additional responsibilities associated with his taking on a broader role leading Global Research & Development. Accordingly, for fiscal 2024, the Committee determined not to increase the base salary of Mr. Smith, and to increase the base salaries of Messrs. Moylan, DiPerna, Phipps, and Rothenstein, as set forth below (in Canadian dollars for Mr. DiPerna).
Annual Base Salary
Annual cash incentive opportunity The annual cash incentive opportunity for our employees, including the NEOs, is expressed as a percentage of base salary. Because of this correlation, the Committee typically looks at base salary and annual cash incentive compensation in combination, and considers the effect modifications to either element have on the "target total cash compensation" for each individual. The Committee considers potential incentive payments to each NEO at the "target" level (as reflected in "Annual Cash Incentive Bonus Plan" below), together with base salary, in determining the "target total cash compensation" payable to each executive. Based on the Market Data considered by the Committee and on the planned increases in base salaries described above, the Committee determined that the target annual cash incentive opportunities for the NEOs were reasonable and appropriate, and accordingly did not increase them for fiscal 2024 (except with respect to Mr. DiPerna, whose increase reflects his promotion to executive officer), as set forth below.
Annual Cash Incentive Opportunity
Annual Cash Incentive Opportunity
Annual Cash Incentive Opportunity
| | Target Annual Cash Incentive Compensation (as a percentage of base salary) | | | | Name | Fiscal 2023 | Fiscal 2024 | Percentage Increase | | Gary B. Smith | 150% | 150% | 0% | | James E. Moylan, Jr. | 90% | 90% | 0% | | Dino DiPerna | 60% | 80% | 33% | | Jason M. Phipps | 100% | 100% | 0% | | David M. Rothenstein | 80% | 80% | 0% |
Annual Cash Incentive Opportunity
Target total cash compensation opportunity The Committee’s decisions with respect to annual base salaries and target annual cash incentive opportunities for fiscal 2024 resulted in target total cash compensation for the NEOs as set forth below (in Canadian dollars, for Mr. DiPerna).
Target Total Cash Compensation
The amounts in the table above represent target total cash compensation for fiscal 2023 and fiscal 2024. For amounts actually earned or received by our NEOs during fiscal 2024, see the "Fiscal 2024 Summary Compensation Table" section of the "Executive Compensation Tables" below. Mr. DiPerna's year-over-year increase reflects his promotion to executive officer and assumption of a significantly broader role, with commensurately higher market data points across both cash and equity pay components. Annual cash incentive bonus plan Full-time employees, excluding our employees who receive sales commissions, generally are eligible to participate in our annual cash incentive bonus plan, which pays out a bonus upon the achievement of performance objectives established by the Committee. This plan is the mechanism for delivering the annual cash incentive opportunities discussed above. The bonus plan, which is more fully described in the "Fiscal 2024 Grants of Plan-Based Awards" section of the "Executive Compensation Tables" below, provides the Committee with the flexibility to establish corporate, departmental or individual performance objectives upon which bonus payments are contingent.
Bonus
Bonus
Percentage
Percentage (40%) Financial Objectives Corporate Objectives The bonus plan is structured to focus and incent our executive officers on the achievement of a key pre-established set of short-term financial and corporate performance objectives. Fiscal 2024 structure. In designing the fiscal 2024 annual cash incentive bonus plan, the Committee decided to continue to use two financial objectives and a set of defined corporate objectives to determine the applicable bonus funding percentage. Revenue and adjusted operating income (after taking into account the adjustments described in Financial Objectives below) were again selected as the financial objectives in order to reflect Ciena’s overall emphasis on balancing both top-line revenue growth and bottom-line profitability, and were weighted at 40% and 30%, respectively. The corporate objectives were again weighted at 30%. For fiscal 2024, the Committee determined to retain existing thresholds, payouts, and slopes, as the Committee deemed these elements to be appropriately rigorous in light of Ciena's expected business volatility and within the range of reasonable market practice. The applicable bonus funding percentage under the fiscal 2024 annual cash incentive bonus plan was calculated as set forth below, with the maximum amount that could be paid equaling 185% of the target annual cash incentive opportunity ((200% x 40%) + (200% x 30%) + (150% x 30%)). Overall, the fiscal 2024 annual cash incentive bonus plan was designed to balance and align the interests of our employees and stockholders, while incentivizing Ciena’s workforce to drive toward growing revenue and improving profitability and stockholder return.
Percentage
| Fiscal 2024 Revenue (40%) | | Fiscal 2024 Adjusted Operating Income (30%) | | Corporate Objectives (30%) | | | Performance Against Target (%) | Total Target Bonus Earned (%) | Performance Against Target (%) | Total Target Bonus Earned (%) | Objectives Achieved (#) | Total Target Bonus Earned (%) | | < 80.0% | 0.0% | < 70.0% | 0.0% | 0 - 2 | 0% | | 80.0% | 50.0% | 70.0% | 50.0% | 3 | 50% | | 95.0% | 90.0% | 92.5% | 90.0% | 4 | 100% | | 100.0% | 100.0% | 100.0% | 100.0% | 5 | 125% | | 105.0% | 110.0% | 107.5% | 110.0% | 6 | 150% | | > 115.0% | 200.0% | > 125.0% | 200.0% | | |
Percentage
Bonus payments are interpolated for performance results falling between the designated levels set forth above. For illustrative purposes only and by way of example, if Ciena had achieved 80% of the revenue target, 92.5% of the adjusted operating income target and five of its six corporate objectives, the applicable annual cash incentive award would have been 84.5% ((50% x 40%) + (90% x 30%) + (125% x 30%)) of the target annual cash incentive opportunity. Financial objectives. As noted above, the Committee believed that the use of two financial performance-based metrics – revenue and adjusted operating income – would provide the most comprehensive and effective indicator of Ciena’s overall operating performance, reduce dependency on a single financial objective, and balance emphasis on top-line and bottom-line performance. The Committee recognized that those measures were two of the most important and frequently reviewed metrics used by our CEO and executive team in managing Ciena’s business. Adjusted operating income is a non-GAAP measure pursuant to which the Committee gives effect to certain adjustments to our GAAP income results generally consistent with those reported in our quarterly earnings releases, as well as the cost of the annual cash incentive bonus plan and any sales incentive compensation earned by our global field organization in excess of that budgeted in our annual operating plan. See the section titled "Non-GAAP Measures for more information on the use of these measures and comparable GAAP metrics. Each of the targets for these financial performance-based metrics was taken directly from our fiscal 2024 operating plan approved by the Board of Directors. Corporate objectives. The fiscal 2024 corporate objectives for the annual cash incentive bonus plan were recommended by management and, after discussion, approved by the Committee. The objectives were aligned with Ciena’s execution imperatives for the fiscal year and were viewed as important to advancing Ciena’s three-year strategic plan. The Company achieved five of the six objectives, as set forth below.
Percentage
| Revenue (40%) | | | Adjusted Operating Income (30%) | | | Corporate Objectives (30%) | | | | Target ($MM) | Actual ($MM) | % Bonus Payout | Target ($MM) | Actual ($MM) | % Bonus Payout | Target (#) | Actual (#) | % Bonus Payout | | $4,600 | $4,015 | 69.5% | $734 | $465.8 | 0% | 4 | 5 | 125% |
Attainment of Fiscal 2024 Cash Incentive Bonus
Attainment of Fiscal 2024 Cash Incentive Bonus
Attainment of Fiscal 2024 Cash Incentive Bonus
| Name | Fiscal 2024 Cash Incentive Bonus | | | Gary B. Smith | | $975,000 | | James E. Moylan, Jr. | | $361,355 | | Dino DiPerna | CAD | $336,960 | | Jason M. Phipps | | $366,990 | | David M. Rothenstein | | $290,784 |
Attainment of Fiscal 2024 Cash Incentive Bonus
Equity compensation Factors and process in determining equity awards In determining equity compensation for fiscal 2024, the Committee considered the Market Data with respect to the overall average equity value for our executive officers as compared to the market. Ciena primarily competes with and hires executives from companies that are substantially larger in all relevant comparator metrics, and that the Committee has determined are therefore not appropriate to include in the Peer Group. This dynamic results in the Committee developing a Peer Group of industry-related companies with whom Ciena does not directly compete but who represent an aggregate financial profile that places Ciena at or about the market median, with revenue as the most relevant criterion. As a result, and in order to better reflect market dynamics and Ciena’s resulting challenge in attracting and retaining top executives, the Committee believes that it is appropriate to establish equity values for our executive officers using a third quartile target range for the values delivered to similar executives. Based on Ciena’s business and financial performance, the factors for each individual executive described in "Qualitative Factors" above, and Compensia’s analysis, our CEO prepared recommendations for target equity values for each of the NEOs (other than himself) for the Committee’s consideration. In determining fiscal 2024 equity compensation, and in addition to the qualitative factors described above, the Committee considered, among other things, the following: ❖ our CEO’s assessment of the overall responsibilities, performance, experience, expertise and value to Ciena of each individual, as well as the criticality of each position and any concerns with respect to retaining the individual; ❖ the outstanding, unvested equity holdings of each individual and assumptions relating to future values; ❖ the potential impact of awards at the target equity values on key stockholder dilution metrics, including current and three-year average burn rate, equity overhang levels, and equity grant expense as a percentage of market capitalization; ❖ the specific number of shares resulting from the proposed target equity values using a range of possible grant date Ciena stock prices; and ❖ the number of shares remaining available for issuance under the 2017 Plan. The Committee made its own evaluation for our CEO, based upon its assessment of his performance, experience and value to Ciena, as well as consideration of the other factors listed above. Equity awards As described above, based on the Market Data, as well as our methodology for calculating the value of equity awards, the Committee believed that the target equity values delivered the previous year were slightly below the overall market. Accordingly, the Committee established aggregate target delivered values for fiscal 2024 that represented either the previous target delivered values or reasonable year-over-year increases in target delivered values, with variance by individual executive based on market comparisons for the applicable position, in order to ensure alignment with the market and remain competitive. In order to ensure continued alignment between the compensation of our executive officers, Ciena’s business and financial performance, and stockholder returns, the Committee decided to deliver this aggregate target equity value through a mix of equity vehicles, consistent with the equity allocation used in recent years. Specifically, the fiscal 2024 equity awards for our executive officers included a combination of RSUs, PSUs, and MSUs, the key elements of which are set forth below.
Attainment of Fiscal 2024 Cash Incentive Bonus
| Equity Vehicle | Weighting (CEO) | Weighting (Other NEOs) | Metric(s) | Performance Period | Vesting | | Restricted Stock Units | 40% | 50% | None | N/A | Quarterly (1/16th) over four years | | Performance Stock Units | 36% | 30% | Sales Orders and Adjusted EPS | One Year (Fiscal 2024) | 50% after first year and 50% after second year | | Market Stock Units | 24% | 20% | Relative TSR | Three Years (Fiscal 2024–2026) | 100% after third year |
Attainment of Fiscal 2024 Cash Incentive Bonus
Once established by the Committee, each NEO’s target equity value was calculated into a specific number of shares of Ciena’s common stock based on the grant date fair value. Prior to fiscal 2024, each NEO’s target equity value was calculated into a specific number of shares of Ciena’s common stock based on the trailing 30-day average of Ciena’s closing stock price prior to the grant date, which resulted in deviations that fluctuate, from year to year, between target equity value and grant date fair value. This change in calculation methodology resulted in reductions in aggregate target value in fiscal 2024 as compared to fiscal 2023 for some of our NEOs. For more information on the calculation of grant date fair value in accordance with FASB ASC Topic 718, please refer to the Fiscal 2024 Summary Compensation Table below and its accompanying footnotes. The table below sets forth the specific number of shares underlying the equity awards granted to each NEO, with the PSU and MSU awards set forth at the target level based on achievement of the goals described below. The table also sets forth the aggregate target value intended by the Committee and the aggregate grant date delivered value of such awards based on (i) for RSU and PSU awards, Ciena’s closing stock price of $43.58 per share on the grant date of December 12, 2023, and (ii) for MSU awards, the Monte Carlo simulation as of the grant date, establishing the future award value in accordance with the valuation methodology of FASB ASC Topic 718.
Fiscal 2024 Annual Equity Awards
Fiscal 2024 Annual Equity Awards
Fiscal 2024 Annual Equity Awards
| Name | RSUs (#) | PSUs at Target Level (#) | MSUs at Target Level (#) | Aggregate Target Value (1) ($) | Aggregate Grant Date Delivered Fair Value ($) | | Gary B. Smith | 100,964 | 90,867 | 60,578 | $10,999,984 | $12,069,792 | | James E. Moylan, Jr. | 31,723 | 19,034 | 12,689 | $2,764,977 | $2,989,064 | | Dino DiPerna | 21,799 | 13,079 | 8,720 | $1,900,001 | $2,053,996 | | Jason M. Phipps | 30,978 | 18,587 | 12,391 | $2,700,042 | $2,918,868 | | David M. Rothenstein | 26,388 | 15,833 | 10,555 | $2,299,978 | $2,486,379 |
Fiscal 2024 Annual Equity Awards
(1) Based on the closing stock price of Ciena’s common stock on the date of grant. RSUs. The Committee used its standard four-year vesting period for the RSUs – one-sixteenth of the grant amount vesting each calendar quarter over a four-year period – in order to promote long-term alignment with stockholders and longer-term decision making that provides an effective balance to the shorter-term incentive provided by annual cash incentive bonus awards. PSUs. The Committee structured the PSUs with a fiscal 2024 performance period. In selecting a one-year period, the Committee sought to achieve a balance between the desire to incorporate a specific performance-based component in the long-term incentive compensation for our executive officers with an acknowledgment of the difficulties inherent in establishing long-term performance goals in an uncertain macroeconomic environment and given the volatile technology and communications networking sectors in which we and our customers compete. The Committee carefully considered the implications of using a one-year performance period instead of a longer period for this portion of its long-term incentive compensation, and ultimately determined that such implications were outweighed by the desire to avoid any long-term unintended consequences or limiting Ciena’s flexibility as a result of outdated or inapplicable long-term goals in future years. In recognition of the one-year performance period, the Committee incorporated an additional retention element to the performance equity compensation, whereby any PSU shares that were earned during the fiscal 2024 performance period would be subject to a staggered vesting and delivery schedule in two equal installments over the 12 months following the end of the fiscal 2024 performance period, subject to the individual executive officer’s continued service with Ciena. In establishing this performance equity structure, the Committee was significantly influenced by the fact that it had been using a similar structure for the past several years and that the structure successfully achieved the Committee’s desired objectives for both company performance and long-term incentive compensation for our executive officers. The Committee also considered this structure to be reasonable and appropriate in light of the use of other longer-term equity awards, including, in particular, MSUs as part of the overall equity allocation for our executive officers. In establishing goals for the PSUs, the Committee sought to align the interests of our executive officers with our stockholders by focusing their efforts on ensuring the longer-term growth of our business while achieving growing profitability. The Committee also sought to avoid metric overlap between the goals for the annual cash incentive bonus plan and the long-term equity compensation for our executive officers. Accordingly, the PSUs were based on two goals for fiscal 2024: ❖ $4,017 million in aggregate sales orders; and ❖ $2.95 in adjusted earnings per share. Adjusted earnings per share is a non-GAAP measure determined as Ciena's earnings per share calculated using our GAAP income results with adjustments generally consistent with those reported in our quarterly earnings release. See the section titled "Non-GAAP Measures" for more information on the use of these measures and comparable GAAP metrics. Each of these goals was derived directly from the targets set forth in our fiscal 2024 operating plan, which was reviewed and approved by the Board of Directors. The PSUs were allocated equally between the two goals, and the Committee considered the prospects for attainment and non-attainment of the PSU performance goals to be equally likely. Any portion of the PSUs not earned by the end of the performance period would be forfeited. The PSUs were designed such that 100% of the shares underlying the award would be earned upon the achievement of 100% of both the sales orders target and the adjusted EPS target. Consistent with our pay-for-performance philosophy, and to closely align the interests of our executive officers with our stockholders and to further incentivize them to overachieve against our fiscal 2024 operating plan, the Committee incorporated upside earning potential to the PSUs for extraordinary performance and downside risk for under-performance against each of the two goals. For fiscal 2024, in order to better align payout slopes with current market practice, the Committee made adjustments to the slopes within 7.5% of the target for aggregate sales orders performance to match the slopes for adjusted earnings per share performance. Specifically, the Committee established the minimum performance thresholds and maximum number of additional PSUs that could be earned for achievement against the sales orders and adjusted earnings per share targets, as set forth below:
Fiscal 2024 Annual Equity Awards
| | Aggregate Sales Orders (1/2 of Total PSUs) | | | Adjusted Earnings Per Share (1/2 of Total PSUs) | | | | | Aggregate Sales Orders ($MM) | Performance Against Target (%) | Target PSUs Earned (%) | EPS ($) | Performance Against Target (%) | Target PSUs Earned (%) | | | < $3,214 | < 80.0% | 0% | <$2.07 | < 70.0% | 0% | | “Threshold” | $3,214 | 80.0% | 50% | $2.07 | 70.0% | 50% | | | $3,716 | 92.5% | 90% | $2.73 | 92.5% | 90% | | "Target" | $4,017 | 100.0% | 100% | $2.95 | 100.0% | 100% | | | $4,318 | 107.5% | 110% | $3.17 | 107.5% | 110% | | “Maximum” | $4,620 | 115.0% | 200% | $3.84 | 130% | 200% |
Fiscal 2024 Annual Equity Awards
The percentages of target PSUs earned are interpolated on a straight-line basis for results falling between the designated levels set forth above. Based on the above table, no PSUs could be earned for performance below the threshold, and the maximum amount of PSUs that could be earned was 200% of the target number of shares underlying each PSU award. MSUs. To promote a strong alignment of interests with our stockholders, the Committee incorporated a relative stock performance goal as part of the annual equity awards for our executive officers. The MSUs are based on Ciena’s total stockholder return ("TSR") – i.e., its stock price appreciation – as compared to the TSR of an identified median company (the "Index Median Company") within the S&P North American Technology-Multimedia Networking Index (the "S&P Networking Index") over a three-year measurement period covering Ciena’s fiscal 2024 through fiscal 2026 (the "Measurement Period"). Prior to fiscal 2024, for purposes of calculating MSU performance, Ciena's TSR was compared to the total reported return (the "Return") of the S&P Networking Index. The Committee made the change from the Return to the TSR of the Index Median Company in order to address the impact of regular index reconstitution, which changes the weighting of companies continuing in the index, as well as the potential addition or removal of companies from the index during the performance period. The Committee selected the S&P Networking Index as the appropriate comparator index both because it is directly relevant to our business, consisting of several companies in our sector and including Ciena as a constituent, and because its overall performance has been closely correlated to that of Ciena in recent years. For purposes of determining the TSR for Ciena and the TSR for the Index Median Company, and in order to mitigate the potential impact of stock price volatility, the beginning and ending values for each measure are determined on an average basis over a period of 90 calendar days prior to both the beginning and the end of the Measurement Period. For the same reasons as with the PSUs, the Committee incorporated upside earning potential to the MSUs for outperformance against the S&P Networking Index and downside risk for underperformance against the S&P Networking Index. Specifically, the applicable percentage of the target number of MSUs earned will be determined based on the absolute percentage point difference between Ciena’s TSR as compared to the TSR for the Index Median Company during the Measurement Period, as set forth below:
Fiscal 2024 MSU Performance Goal
| Fiscal 2024-2026 Relative TSR (absolute percentage point difference) | Target MSUs Earned (%) | | (50)% | 0% | | Equal | 100% | | ≥50% | 200% |
Fiscal 2024 MSU Performance Goal
The percentage of target MSUs earned is interpolated on a straight-line basis for results falling between the designated levels set forth above. Based on the above table, the maximum amount of MSUs that can be earned is 200% of the target number of shares underlying each MSU award. However, if Ciena’s TSR during the Measurement Period is negative (as a result of a decline in our stock price during such period), then the executive officer will earn less than 100% of the target number of shares underlying the MSU award. To the extent earned, the MSUs will vest in full in December 2026 following the end of the Measurement Period, subject to the individual executive officer’s continued service with Ciena through the vesting date. Any portion of the MSUs not earned at the end of the Measurement Period will be forfeited. Overall, the Committee believed that nearer-term goals of the PSUs focused on top-line growth and bottom-line cash generation (via the PSU goals of sales orders and adjusted earnings per share), complemented by a longer-term MSU goal focused on relative TSR, is an effective combination that will closely align the interests of our executive officers with those of stockholders and thereby encourage actions expected to enhance stockholder value. Attainment of fiscal 2024 PSUs As noted above, we experienced a lower volume of sales orders in fiscal 2024 when compared to our target, which was in part due to service provider customers taking longer than expected to work through their high levels of inventory. These lower sales orders had resulting impacts on our business and financial performance that flowed through to adjusted earnings per share. Consequently, we underperformed against the aggregate sales order goal and failed to meet the minimum performance threshold for the adjusted earnings per share goal, each as set forth below.
Fiscal 2024 MSU Performance Goal
Based on the equal weighting of the two goals, 40% of the total PSUs were earned as set forth below. One-half of the PSUs earned during fiscal 2024 vested in December 2024, and the remaining one-half of the PSUs earned will vest in December 2025, subject to continued service with Ciena through the vesting date.
Fiscal 2024 PSU Awards Earned
Fiscal 2024 PSU Awards Earned
Fiscal 2024 PSU Awards Earned
| Name | PSUs Earned (#) | | Gary B. Smith | 36,346 | | James E. Moylan, Jr. | 7,614 | | Dino DiPerna | 5,231 | | Jason M. Phipps | 7,434 | | David M. Rothenstein | 6,333 |
Fiscal 2024 PSU Awards Earned
Attainment of fiscal 2022 MSUs The MSUs granted in December 2021 applied to the three-year measurement period covering Ciena’s fiscal 2022 through fiscal 2024. During that period, Ciena’s average 90-day average stock price increased from $54.26 at the beginning of the measurement period to $58.83 at the end of the measurement period, thereby generating a TSR of 8.43%. During that same period, the average stock price of the S&P Networking Index generated a Return of 3.63%. Based on that performance, Ciena’s TSR overperformed the S&P Networking Index’s Return over the measurement period by 4.79%, which resulted in 110% of the total MSUs being earned as set forth below. By their terms, the earned MSUs vested in their entirety in December 2024.
Fiscal 2024 PSU Awards Earned
| Fiscal 2022-2024 Comparative TSR Performance | | | | Ciena TSR (%) | Index TSR (%) | % MSUs earned | | 8.43% | 3.63% | 110% |
Fiscal 2022 MSU Awards Earned
Equity award practices Although we do not have a formal policy or obligation to grant equity awards to executive officers and directors on specific dates, we apply a consistent approach in our equity award practices by granting annual equity awards to our executive officers and directors at or around the same time each year. Annual equity awards to our NEOs are made by the Committee, and the grant date of these awards is the same day that the Committee meets to approve the awards. The Committee generally meets, approves and grants annual equity awards to our executive officers promptly following Ciena’s release of earnings for the fourth quarter and fiscal year. This practice began in fiscal 2007 and continued for annual equity awards in fiscal 2024, with the fourth quarter earnings release on December 7, 2023 and executive and non-executive equity awards granted on December 12, 2023. We do not take material nonpublic information into account when determining the timing and terms of equity awards, and do not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. We have not granted stock options or similar awards in many years. Other program elements and pay practices Risk assessment of compensation practices During fiscal 2024, at the Committee’s request and direction, management conducted an assessment of the risks associated with Ciena’s compensation policies and practices, including: ❖ review of plans, policies and procedures relating to the components of our compensation programs ❖ review of incentive-based cash and equity compensation features ❖ identification of any regional or functional distinctions in our compensation programs ❖ identification of compensation design features that could potentially encourage excessive or imprudent risk taking, and identification of business risks that these features could potentially encourage ❖ consideration of the presence or absence of appropriate controls, oversight or other factors that mitigate potential risks ❖ consideration of risks related to our compensation policies and practices and the potential for such risks to result in a material adverse effect on Ciena as a whole The Committee paid particular attention to any additions, modifications or revisions to our compensation programs during the current and preceding fiscal years, and how these changes affected the strengths, weaknesses or controls related to such programs. The Committee also focused its assessment on performance-based incentive compensation programs involving variable payouts and compensation programs impacting our executive team. In substantially all cases, compensation programs were found to be centrally designed and administered and, excluding sales incentive compensation, substantially identical across function and geography. The objectives used to determine incentive compensation were found to be based primarily on Ciena’s reported financial results and other performance-based corporate performance goals used to manage the business or derived from Ciena’s annual operating plan approved by the Board of Directors. In addition, the assessment identified significant controls and other mitigating factors that serve to offset elements of Ciena’s compensation policies and practices that may introduce risk, including: ❖ oversight of major incentive compensation programs and decision-making by the Committee, which, in most cases, retains the ability to adjust elements of incentive compensation in its discretion ❖ robust internal controls over financial reporting and compensation practices regularly reviewed and/or tested by internal auditors and subject to testing as part of the annual independent integrated audit by our external auditors ❖ appropriate segregation of duties ❖ Audit Committee oversight and review of financial results and non-GAAP adjustments used in certain components of incentive compensation ❖ presence of and training relating to corporate standards of business conduct and ethics ❖ substantial alignment of compensation and benefits for executive and non-executive salaried employees ❖ recoupment or "clawback" policies and features in incentive compensation plans applicable to our executive officers and other award recipients as described in "Clawback Policy and Provisions" below Based on the assessment and factors described above, the Committee determined that the risks associated with Ciena’s compensation policies and practices are not reasonably likely to result in a material adverse effect on Ciena. Stock ownership guidelines To align the interests of our executive officers and directors with those of our stockholders, and to promote our commitment to sound corporate governance, the Board of Directors has established stock ownership guidelines for our executive officers and non-employee directors. The guidelines require such persons to hold shares of Ciena common stock of a value equal to a multiple of their annual base salary or annual cash retainer, as applicable, as follows:
Fiscal 2022 MSU Awards Earned
We also have a requirement that our executive officers and non-employee directors hold 50% of all shares of Ciena common stock acquired from Ciena equity awards (net of any shares withheld for taxes or payment of exercise price) until they achieve the applicable minimum ownership level. In addition to the stock ownership requirements specified above, our CEO is required to hold any net shares of Ciena stock that he receives through the exercise of stock options or SARs for at least one year. Each executive officer and non-employee director is subject to these guidelines, provided he or she has five years to attain the requisite stock ownership from the date such individual first becomes subject to the guidelines. Shares that count toward satisfaction of the stock ownership guidelines include: (i) shares owned outright by the person or his or her immediate family members residing in the same household; (ii) shares held in trust for the benefit of the person or his or her family; (iii) shares held through our Deferred Compensation Plan; and (iv) shares purchased on the open market. Unexercised stock options, whether or not vested, unvested RSUs, and unearned and unvested PSUs or MSUs, do not count toward the satisfaction of the guidelines. The guidelines may be waived, at the Committee’s discretion, if compliance would create hardship or prevent compliance with a court order. Deferred Compensation Plan Our Deferred Compensation Plan allows a select group of management employees in the United States (including our NEOs) to defer up to 75% of their base salary and up to 100% of their other compensation, including annual cash incentive bonuses, commissions and RSU awards. The plan also allows non-employee directors to defer up to 100% of their annual cash retainer and annual RSU awards. The plan does not provide for any matching or discretionary contributions to participants except for restorative matching payments of foregone matching contributions that a participant would have received under the terms of our 401(k) Plan but for the participant’s deferrals into the plan. U.S. Executive Severance Benefit Plan We maintain a U.S. Executive Severance Benefit Plan as part of our efforts to continue to attract and retain top executive talent. This plan, which is governed by the Employee Retirement Income Security Act of 1974, as amended, provides certain U.S.-based employees, including the NEOs and employees of the rank of vice president or above, with certain severance payments and benefits in the event of an involuntary separation of service by Ciena without "cause." We believe that this plan is necessary to offer competitive executive compensation packages, and that the plan is important for the retention of participants. For additional information about the severance payments and benefits payable under this plan, as well as the estimated value of these payments and benefits for the NEOs, see "Payments Upon Involuntary Separation of Service for Other than Cause" below. Change in control severance agreements Each of our executive officers has a change in control severance agreement with Ciena. We have entered into these agreements upon the initial hiring of senior employees, upon promotion of existing employees to senior executive roles, and when the Committee determines it to be important for the retention of other key employees. As the existing agreements were due to expire in accordance with their terms, in November 2022 each of the NEOs entered into a new change in control severance agreement with Ciena. These agreements contain the same terms and conditions as the previous agreements and are effective through November 2025, unless earlier terminated. We believe that these severance arrangements are important for retention of key employees and necessary to attract qualified executive officers, who may otherwise be deterred from taking a position with us by the possibility of being dismissed following a change in control of Ciena, particularly given the level of acquisition activity in our industry. Except for the conversion of certain performance-based equity into time-based awards at the target performance level, (i) our CEO receives no payments of benefits under this agreement unless his employment is terminated without cause, or by him for good reason, within 90 days prior to or 18 months following the effective date of a "change in control transaction" (as defined in the agreement), and (ii) the other NEOs receive no payments of benefits under these agreements unless their employment is terminated without cause, or by the executive for good reason, within 90 days prior to or 12 months following the effective date of a change in control transaction. We believe this so-called "double trigger" structure reflects best practice and strikes an appropriate balance between the potential compensation payable to executive officers and the corporate objectives described above. We also believe that were Ciena to engage in discussions or negotiations relating to a corporate transaction that our Board of Directors deems in the interest of stockholders, these agreements would serve as an important tool in ensuring that our executive team remains focused on the consummation of the transaction, without significant distraction or concern relating to personal circumstances such as continued employment. Should any severance payment or benefit be subject to excise tax imposed under federal law, or any related interest or penalties, such severance payments or benefits shall be either (a) paid in full by us or (b) paid in a lesser amount such that no portion of the payments would be subject to the excise tax, whichever results in receipt by the executive officer of a greater after-tax amount. Under this "best choice" mechanism, Ciena would not pay any excise taxes or make any gross-up or similar reimbursement payments related to excise taxes resulting from any severance payment or benefit. For additional information about the payments and benefits payable under these agreements, as well as the estimated value of these payments and benefits for the NEOs, see "Potential Payments Upon Termination or Change in Control" below. Clawback policy and provisions We maintain an Executive Compensation Clawback Policy (the "Required Clawback Policy") that is designed to comply with, and will be interpreted in a manner consistent with, Section 10D of the Exchange Act and the applicable listing standards of the NYSE. Under the Required Clawback Policy, in the event of any required accounting restatement due to Ciena’s material noncompliance with any financial reporting requirement under applicable securities laws to correct a material error in previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, Ciena must recover certain erroneously awarded performance-based compensation previously paid to the Ciena’s executive officers in accordance with the terms of the Required Clawback Policy. Furthermore, under the Required Clawback Policy, Ciena is prohibited from indemnifying any executive officer or former executive officer against the loss of erroneously awarded performance-based compensation and from paying or reimbursing an executive officer for purchasing insurance to cover any such loss.
Fiscal 2022 MSU Awards Earned
We also maintain compensation recoupment or "clawback" provisions in our 2017 Plan, annual cash incentive plan, and sales incentive compensation plan, which are broader than what is currently required by applicable law and provides for recoupment of certain payments and benefits in the event that Ciena is required to prepare an accounting restatement due to material noncompliance, as a result of misconduct, with any financial reporting requirement under applicable securities laws. Specifically, those executive officers subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, and any other recipient of covered incentive compensation who knowingly engaged in such misconduct, was grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct or was grossly negligent in failing to prevent the misconduct, are required to reimburse Ciena the amount of any payment in settlement of such award earned or accrued during the three-year period following the first public issuance or filing with the SEC (whichever first occurred) of the financial document that contained such material noncompliance. Perquisites policy Under our perquisites policy, our executive officers are eligible for the same benefits as our salaried employees and receive only limited perquisites, generally consisting of annual physical examinations as well as tax preparation and financial planning services, both of which are made available to other senior employees. Retirement benefits For equity awards issued on or after December 13, 2022, when executive officers who are residents of certain countries, including the U.S., U.K., and Canada, retire after age 60 with ten years of service and provide and fulfill 12 months’ notice of their retirement, their granted but unvested RSU awards and a pro-rated amount of their PSU awards and MSU awards will continue to vest per their original vesting schedule. Non-executive employees in these countries will be subject to the same eligibility and notice requirements, but will receive acceleration of their granted but unvested RSU awards upon retirement. During the retirement notice period, employees, including executive officers, are not eligible for additional equity grants. In December 2023, we expanded eligibility for this benefit to cover employees in 18 countries. We believe continued vesting following retirement, rather than acceleration upon retirement, better aligns our executive officers’ interests with stockholders beyond the date such executive officer retires from Ciena. We believe that these provisions benefit Ciena by giving us increased visibility into eligible employees’ retirement plans and allowing for enhanced succession planning and knowledge transfer. As of November 2, 2024, Messrs. Smith, Moylan, and DiPerna met the eligibility requirements for continued vesting upon retirement for awards granted on or after December 13, 2022. Starting with the fiscal 2024 performance cycle, we introduced a similar benefit in our annual cash incentive bonus plan, under which employees, including our NEOs, who retire after age 60 with ten years of service and provide and fulfill 12 months’ notice of their retirement will be eligible to receive cash incentive bonus awards based on actual performance and pro-rated to reflect the total percentage of days they were employed during the relevant bonus period. As of November 2, 2024, Messrs. Smith, Moylan, and DiPerna met the eligibility requirements for this benefit. On August 28, 2024, Mr. Moylan provided notice of his decision to retire in 12 months, effective August 28, 2025. Other benefits Our executive officers are eligible to participate in all of our employee benefit plans, such as medical, dental, vision, group life, disability, and accidental death and dismemberment insurance, in each case on the same basis as other employees in their jurisdiction, subject to applicable law. In addition, under our 401(k) plan, all of our U.S. employees are eligible to receive matching contributions up to a defined amount. Our executive officers are also eligible to participate in certain additional benefits, including tax preparation and financial planning reimbursement and an executive health benefit that includes an annual physical examination, that are generally available to employees in roles of Vice President or more senior. Required reimbursement policy We maintain a policy requiring our executive officers to reimburse certain costs associated with any personal use of items such as corporate tickets to sporting or cultural events and personal use of any corporate membership at a golf or similar club. Specifically, any executive officer who makes personal use of such tickets is required to reimburse Ciena for the face value of the tickets used. Any executive officer who makes personal use of a club in which Ciena has a corporate membership must reimburse Ciena for the cost of any meals, merchandise, greens fees, lessons and other charges associated with his or her use and, in addition, reimburse Ciena for a pro-rata share of the annual membership dues for each day on which he or she makes personal use of the facilities. To date, any personal usage has been extremely limited as corporate memberships are maintained predominately in order to use these facilities for business-related functions. The annual dues for each of the three executive officers named individually on club memberships used by Ciena generally range from approximately $3,500 to $30,000. Anti-hedging and pledging policy In accordance with our Insider Trading Policy, and as set forth in "Principles of Corporate Governance, Bylaws and Other Governance Documents" above, our employees (including executive officers) and directors are prohibited from pledging Ciena securities and engaging in hedging transactions with respect to Ciena securities.
Fiscal 2024 Summary Compensation Table
Fiscal 2024 Summary Compensation Table
Fiscal 2024 Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Non- Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Gary B. Smith | 2024 | $1,019,231 | — | $12,069,792 | $975,000 | $12,750 | $14,076,773 | | President and CEO | 2023 | $1,000,000 | — | $12,933,210 | $1,485,000 | $13,200 | $15,431,410 | | | 2022 | $1,000,000 | — | $11,005,780 | $— | $12,200 | $12,017,980 | | James E. Moylan, Jr. | 2024 | $624,114 | — | $2,989,064 | $361,355 | $22,153 | $3,996,686 | | SVP and CFO | 2023 | $591,369 | — | $3,223,979 | $532,283 | $21,730 | $4,369,361 | | | 2022 | $575,000 | — | $2,676,675 | $— | $20,431 | $3,272,106 | | Dino DiPerna | 2024 | $473,330 | — | $2,053,996 | $241,488 | $28,740 | $2,797,554 | | SVP, Global R&D | | | | | | | | | Jason M. Phipps | 2024 | $570,450 | — | $2,918,868 | $366,990 | $21,046 | $3,877,354 | | SVP, Global Customer Engagement | 2023 | $539,000 | — | $2,798,397 | $540,540 | $20,842 | $3,898,779 | | | 2022 | $515,385 | — | $2,804,194 | $— | $20,573 | $3,340,152 | | David M. Rothenstein | 2024 | $565,000 | — | $2,486,379 | $290,784 | $15,658 | $3,357,821 | | SVP, Chief Strategy Officer and Secretary(5) | 2023 | $533,854 | — | $2,667,176 | $428,314 | $13,200 | $3,642,544 | | | 2022 | $515,000 | — | $2,294,362 | $— | $12,200 | $2,821,562 |
Fiscal 2024 Summary Compensation Table
(1) Ciena has a 52 or 53-week fiscal year, which ends on the Saturday nearest to the last day of October in each year. Ciena’s fiscal 2024 consisted of a 53-week period. Ciena's fiscal 2023 and 2022 consisted of a 52-week period. Salary information for fiscal 2024 reflects Mr. DiPerna’s salary paid in Canadian Dollars (CAD$660,462) as converted to U.S. dollars based on the ending exchange rate for the applicable fiscal year. (2) The amounts set forth in the "Stock Awards" column represent the aggregate grant date fair value of RSU, PSU and MSU awards granted during the fiscal years noted above, computed in accordance with FASB ASC Topic 718. Aggregate grant date fair values reported above do not reflect sale or forfeiture of shares to fund tax withholding in accordance with the terms of the award agreement and will likely vary from the actual amount ultimately realized by any NEO based on a number of factors, including the number of shares that are earned and ultimately vest, the timing of vesting, the timing of any sale of shares and the market price of Ciena common stock at that time. For RSUs, we calculate grant date fair value by multiplying the number of shares underlying the award by the closing price per share of Ciena common stock on the grant date. Assumptions used in determining the grant date fair value of PSUs and MSUs are set forth in Note 23 to our consolidated financial statements included in our 2024 Form 10-K. Assuming the maximum future payout under the PSUs and MSUs, the aggregate grant date fair value in the "Stock Awards" column above for fiscal 2024 would have been as follows: $19,739,572 for Mr. Smith; $4,595,641 for Mr. Moylan; $3,157,992 for Mr. DiPerna; $4,487,714 for Mr. Phipps; and $3,822,770 for Mr. Rothenstein. See the "Fiscal 2024 Grants of Plan-Based Awards" table below for information relating to RSU, PSU and MSU awards granted during fiscal 2024 under our 2017 Plan. (3) The amounts set forth in the "Non-Equity Incentive Plan Compensation" column represent the amounts earned by each NEO under Ciena’s annual cash incentive bonus plan for fiscal 2024. See the "Fiscal 2024 Grants of Plan-Based Awards" table below for information relating to cash incentive awards granted during fiscal 2024 under our annual cash incentive bonus plan. The amounts set forth in the "All Other Compensation" column include the following for each NEO (as applicable) during fiscal 2024: a. For each NEO other than Mr. DiPerna, 401(k) plan matching contributions paid by us and generally available to all full-time U.S. employees, including $12,750 for Mr. Smith, $13,553 for Mr. Moylan, $12,446 for Mr. Phipps, and $13,800 for Mr. Rothenstein. In the case of Mr. DiPerna, contributions of $9,353 were paid by us to a defined contribution pension plan that covers Ciena’s employees based in Canada, converted to US dollars. b. For Messrs. Moylan, DiPerna and Phipps, reimbursement of costs associated with financial planning and tax preparation services generally made available to all executive officers, subject to a $10,000 annual limit per tax year on such services. c. For Mr. Rothenstein, costs associated with an annual physical examination based on the amount paid for such service. (5) Mr. Rothenstein was appointed Senior Vice President, Chief Strategy Officer and Secretary effective January 30, 2023 and, in connection with his appointment to this role, resigned from his previous role as Senior Vice President and General Counsel. Grants of plan-based awards Non-equity incentive plan awards. Non-equity incentive plan awards for fiscal 2024, which are identified as "Incentive Cash" in the "Fiscal 2024 Grant of Plan-Based Awards" table below, represent the estimated range of potential payouts possible under our annual cash incentive bonus plan at the time of award. The actual cash incentive bonus earned by the NEOs during fiscal 2024 is set forth in the "Non-Equity Incentive Compensation" column of the "Fiscal 2024 Summary Compensation Table" above. The design and structure of the plan for fiscal 2024, including the use of a combination of (i) financial objectives consisting of our fiscal 2024 revenue target and our fiscal 2024 adjusted operating income target and (ii) corporate objectives consisting of six corporate performance goals, to derive the total bonus payout percentage, is more fully described in "Compensation Discussion and Analysis" above. Based on the level of achievement of the fiscal 2024 financial objectives and corporate objectives, bonuses under the annual cash incentive bonus plan would have been payable at each of the "threshold," "target" and "maximum" levels as set forth below, with payments interpolated for results falling between the designated levels:
Fiscal 2024 Summary Compensation Table
| | Fiscal 2024 Cash Incentive Bonus Plan | | | | | | Revenue Objective Achieved | Adjusted Operating Income Objective Achieved | Corporate Objectives Achieved | Target Bonus Payable | | "Threshold" | < 80% | 70% | 0 - 2 | 15% | | "Target" | 100% | 100% | 4 | 100% | | "Maximum" | 115% | 125% | 6 | 185% |
Fiscal 2024 Summary Compensation Table
The "threshold," "target" and "maximum" values in the table below are calculated by multiplying each NEO’s base salary for fiscal 2024 by his respective target annual cash incentive opportunity (expressed as a percentage of annual base salary) by the applicable target bonus payable factor above. See "Compensation Discussion and Analysis — Annual Cash Incentive Bonus Plan." Equity awards. Equity awards during fiscal 2024 consisted of RSU, PSU and MSU awards. Each such stock award represents a contractual right to receive one share of our common stock. RSU awards granted to the NEOs in fiscal 2024 vest over a four-year term, with one-sixteenth of the grant amount vesting quarterly. PSU awards granted to the NEOs in fiscal 2024 were structured such that 100% of the shares underlying the award would be earned upon the achievement of 100% of both the sales orders target and the adjusted earnings per share target, as more fully described in "Compensation Discussion and Analysis — Equity Awards — PSUs" above. The PSU awards incorporate upside earning potential for extraordinary performance and downside risk for underperformance against each of the two goals. Specifically, the PSU awards are subject to the minimum performance thresholds and maximum number of additional PSUs that could be earned for achievement against the sales orders and adjusted earnings per share targets, as set forth below:
Fiscal 2024 Grants of Plan-Based Awards
Fiscal 2024 Grants of Plan-Based Awards
Fiscal 2024 Grants of Plan-Based Awards
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Stock | Full Grant Date Fair | | Name | Type of Award | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Units (#) | Value (2) ($) | | Gary B. Smith | PSU | 12/12/2023 | | | | 22,717 | 90,867 | 181,734 | | $3,959,984 | | | RSU | 12/12/2023 | | | | | | | 100,964 | $4,400,011 | | | MSU | 12/12/2023 | | | | 0 | 60,578 | 121,156 | | $3,709,797 | | | Incentive Cash | 12/12/2023 | $225,000 | $1,500,000 | $2,775,000 | | | | | | | James E. Moylan, Jr. | PSU | 12/12/2023 | | | | 4,759 | 19,034 | 38,068 | | $829,502 | | | RSU | 12/12/2023 | | | | | | | 31,723 | $1,382,488 | | | MSU | 12/12/2023 | | | | 0 | 12,689 | 25,378 | | $777,074 | | | Incentive Cash | 12/12/2023 | $83,390 | $555,930 | $1,028,471 | | | | | | | Dino DiPerna | PSU | 12/12/2023 | | | | 3,270 | 13,079 | 26,158 | | $569,983 | | | RSU | 12/12/2023 | | | | | | | 21,799 | $950,000 | | | MSU | 12/12/2023 | | | | 0 | 8,720 | 17,440 | | $534,013 | | | Incentive Cash | 12/12/2023 | $55,728 | $371,520 | $687,311 | | | | | | | Jason M. Phipps | PSU | 12/12/2023 | | | | 4,647 | 18,587 | 37,174 | | $810,021 | | | RSU | 12/12/2023 | | | | | | | 30,978 | $1,350,021 | | | MSU | 12/12/2023 | | | | 0 | 12,391 | 24,782 | | $758,825 | | | Incentive Cash | 12/12/2023 | $84,690 | $564,600 | $1,044,510 | | | | | | | David M. Rothenstein | PSU | 12/12/2023 | | | | 3,958 | 15,833 | 31,666 | | $690,002 | | | RSU | 12/12/2023 | | | | | | | 26,388 | $1,149,989 | | | MSU | 12/12/2023 | | | | 0 | 10,555 | 21,110 | | $646,388 | | | Incentive Cash | 12/12/2023 | $67,104 | $447,360 | $827,616 | | | | | |
Fiscal 2024 Grants of Plan-Based Awards
Estimated possible payouts under non-equity incentive plan awards reflect the following: a. Cash incentive opportunity reported at the "threshold," "target" and "maximum" levels has been calculated in accordance with the plan design described in "Non-Equity Incentive Plan Awards" above and more fully described in "Compensation Discussion and Analysis — Annual Cash Incentive Bonus Plan." b. The cash incentive opportunities reported for Mr. DiPerna are calculated assuming the conversion of Canadian Dollars to U.S. dollars based on the ending exchange rate for fiscal 2024. (2) Grant Date Fair Value reported in the table above, computed in accordance with FASB ASC Topic 718, will likely vary from the amount actually realized by any NEO based on a number of factors, including the number of shares that are earned and ultimately vest, the timing of vesting, the timing of any sale of shares, and the market price of Ciena common stock at that time. For RSUs and PSUs, we calculate grant date fair value by multiplying the number of shares granted by the closing market price per share of Ciena common stock on the grant date. For MSUs, we calculate grant date fair value based on the Monte Carlo simulation as of the grant date, establishing the future award value in accordance with the valuation methodology of FASB ASC Topic 718. Assumptions used in determining the grant date fair value of PSUs and MSUs are set forth in Note 23 to our consolidated financial statements included in our 2024 Form 10-K. Outstanding equity awards at fiscal year-end The following table sets forth, on an award-by-award basis, information related to unvested stock awards held by each NEO as of the end of fiscal 2024. The vesting conditions for each award, including the identification of those awards that are subject to performance-based vesting conditions, are set forth in the footnotes below the table. The market value of equity awards that have not vested is calculated by multiplying the number of shares by $63.97, the closing market price per share of our common stock on the NYSE on the last trading day of fiscal 2024.
Outstanding Equity Awards at Fiscal 2024 Year-End
Outstanding Equity Awards at Fiscal 2024 Year-End
Outstanding Equity Awards at Fiscal 2024 Year-End
| | | Stock Awards | | | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Gary B. Smith | 12/12/2023 | 36,346(1) | $2,325,054 | | | 12/12/2023 | 82,034(2) | $5,247,715 | | | 12/12/2023 | 60,578(3) | $3,875,175 | | | 12/13/2022 | 13,990(4) | $894,940 | | | 12/13/2022 | 54,648(5) | $3,495,833 | | | 12/13/2022 | 58,291(6) | $3,728,875 | | | 12/14/2021 | 16,858(7) | $1,078,406 | | | 12/14/2021 | 35,602(8) | $2,277,460 | | | 12/16/2020 | 4,399(9) | $281,404 | | James E. Moylan, Jr. | 12/12/2023 | 7,614(1) | $487,068 | | | 12/12/2023 | 25,776(2) | $1,648,891 | | | 12/12/2023 | 12,689(3) | $811,715 | | | 12/13/2022 | 2,931(4) | $187,496 | | | 12/13/2022 | 17,172(5) | $1,098,493 | | | 12/13/2022 | 12,210(6) | $781,074 | | | 12/14/2021 | 5,207(7) | $333,092 | | | 12/14/2021 | 7,329(8) | $468,836 | | | 12/16/2020 | 1,238(9) | $79,195 | | Dino DiPerna | 12/12/2023 | 5,231(1) | $334,627 | | | 12/12/2023 | 17,713(2) | $1,133,101 | | | 12/12/2023 | 8,720(3) | $557,818 | | | 10/27/2023 | 4,572(10) | $292,471 | | | 12/13/2022 | 7,452(5) | $476,704 | | | 12/14/2021 | 2,975(7) | $190,311 | | | 12/16/2020 | 688(9) | $44,011 | | Jason M. Phipps | 12/12/2023 | 7,434(1) | $475,553 | | | 12/12/2023 | 25,170(2) | $1,610,125 | | | 12/12/2023 | 12,391(3) | $792,652 | | | 12/13/2022 | 2,544(4) | $162,740 | | | 12/13/2022 | 14,904(5) | $953,409 | | | 12/13/2022 | 10,598(6) | $677,954 | | | 12/14/2021 | 5,454(7) | $348,892 | | | 12/14/2021 | 7,679(8) | $491,226 | | | 12/16/2020 | 1,238(9) | $79,195 | | David M. Rothenstein | 12/12/2023 | 6,333(1) | $405,122 | | | 12/12/2023 | 21,441(2) | $1,371,581 | | | 12/12/2023 | 10,555(3) | $675,203 | | | 12/13/2022 | 2,120(4) | $135,616 | | | 12/13/2022 | 12,420(5) | $794,507 | | | 12/13/2022 | 3,726(5) | $238,352 | | | 12/13/2022 | 8,832(6) | $564,983 | | | 12/14/2021 | 4,463(7) | $285,498 | | | 12/14/2021 | 6,283(8) | $401,924 | | | 12/16/2020 | 1,031(9) | $65,953 |
Outstanding Equity Awards at Fiscal 2024 Year-End
PSU awards granted on December 12, 2023 were subject to achievement of the goals described above in "Grants of Plan-Based Awards" and "Compensation Discussion and Analysis" for the fiscal 2024 performance period. In December 2024, such goals were determined by the Compensation Committee to have been satisfied in part, and 40.0% of the total PSUs were earned. See "Compensation Discussion and Analysis" above. Amounts reported above reflect the actual amount earned with respect to such PSU awards in December 2024. The amounts earned thereunder vest in equal installments on December 20, 2024 and 2025. (2) Remaining unvested RSUs granted on December 12, 2023 vest as to one-sixteenth of the grant amount on March 20, June 20, September 20 and December 20 of each year through December 20, 2027. (3) MSU awards granted on December 12, 2023 are subject to achievement of the goals described above in "Grants of Plan-Based Awards" and "Compensation Discussion and Analysis." (4) Remaining amounts earned with respect to PSUs granted on December 13, 2022 vested on December 20, 2024. (5) Remaining unvested RSUs granted on December 13, 2022 vest as to one-sixteenth of the grant amount on March 20, June 20, September 20 and December 20 of each year through December 20, 2026. MSU awards granted on December 13, 2022 are subject to achievement of the goals described above in "Compensation Discussion and Analysis" for the fiscal 2023-2025 performance period. Remaining unvested RSUs granted on December 14, 2021 vest as to one-sixteenth of the grant amount on March 20, June 20, September 20 and December 20 of each year through December 20, 2025. (8) MSU awards granted on December 14, 2021 were subject to achievement of the goals described above in "Grants of Plan-Based Awards" and "Compensation Discussion and Analysis" for the fiscal 2022-2024 performance period. In December 2024, such goals were determined by the Compensation Committee to have been satisfied, and 110.0% of the total MSUs were earned. See "Compensation Discussion and Analysis" above. Amounts reported above reflect the actual amount earned with respect to such MSU awards in December 2024. The amounts earned thereunder vested in their entirety on December 20, 2024. (9) Remaining unvested RSUs granted on December 16, 2020 vested on December 20, 2024. (10) Remaining unvested RSUs granted on October 27, 2023 vest as to one-sixteenth of the grant amount on March 20, June 20, September 20 and December 20 of each year through September 20, 2027. Option exercises and stock vested The following table sets forth on an aggregated basis, as to each NEO, information related to stock awards that vested during fiscal 2024. The value realized upon vesting of stock awards is a pre-tax amount determined by multiplying the aggregate number of shares of stock vested for each NEO during fiscal 2024 by the closing market price per share on the corresponding vesting date for that award. Information as to the value realized does not take into account reductions related to withholding and other tax-related items, brokerage commissions or fees, or forfeiture or other disposition of shares to cover these amounts. The NEOs do not hold any outstanding stock options and there were no options exercised by our NEOs during fiscal 2024.
Fiscal 2024 Option Exercises and Stock Vested Table
Fiscal 2024 Option Exercises and Stock Vested Table
Fiscal 2024 Option Exercises and Stock Vested Table
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Gary B. Smith | 132,686 | $6,289,663 | | James E. Moylan, Jr. | 34,894 | $1,675,926 | | Dino DiPerna | 15,388 | $767,589 | | Jason M. Phipps | 33,798 | $1,621,917 | | David M. Rothenstein | 29,782 | $1,432,965 |
Fiscal 2024 Option Exercises and Stock Vested Table
Nonqualified deferred compensation The following table shows the executive contributions, earnings and account balances for fiscal 2024 for each NEO participating in the Deferred Compensation Plan. This plan allows a select group of senior management employees in the United States (including our NEOs) to defer up to 75% of their annual base salary and up to 100% of their other compensation, including cash incentive bonuses, commissions and RSU awards. The plan does not provide for any matching or discretionary contributions to participants except for restorative matching payments of foregone matching contributions that a participant would have received under the terms of our 401(k) Plan but for the participant’s deferrals into the plan.
Fiscal 2024 Nonqualified Deferred Compensation Table
Fiscal 2024 Nonqualified Deferred Compensation Table
Fiscal 2024 Nonqualified Deferred Compensation Table
| Name | Executive Contributions in Fiscal 2024 ($) | Registrant Contributions in Fiscal 2024 ($) | Aggregate Earnings in Fiscal 2024 ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at November 2, 2024 ($) | | Gary B. Smith | — | — | — | — | — | | James E. Moylan, Jr. (1) | 67,048 | — | 1,152,290 | — | 3,226,775 | | Dino DiPerna | — | — | — | — | — | | Jason M. Phipps | — | — | — | — | — | | David M. Rothenstein | 214,157 | — | 609,615 | — | 2,207,936 |
Fiscal 2024 Nonqualified Deferred Compensation Table
(1) Reflects the fair market value of shares of Ciena common stock based on the closing market price of $63.97 per share of Ciena common stock on the NYSE on the last trading day of fiscal 2024. Potential payments upon termination or change in control This section describes and quantifies the estimated compensation payments and benefits that would be paid to our NEOs in each of the following situations: • upon death or disability; • upon a Qualifying Retirement (as defined below); • upon an involuntary separation of service for other than cause; • upon a change in control of Ciena; and • upon a termination of employment following a change in control of Ciena. We do not maintain employment agreements with our executive officers, including the NEOs. The information below describes those instances in which our NEOs would be entitled to payments and benefits following a termination of employment and/or upon a change in control of Ciena. Our NEOs are "at will" employees and, except as otherwise described below, they are only entitled to payment of accrued salary and vacation time, on the same terms as provided to our other employees, upon any resignation, retirement, or termination of employment, with or without cause. Except as otherwise noted below, the calculations below do not include any estimated payments for those benefits that we generally make available on the same terms to our full-time, non-executive employees. The estimated payments below are calculated based on compensation arrangements in effect as of the last day of fiscal 2024 and assume that the triggering event occurred on such date. The estimated payment amounts are based on a Ciena common stock price of $63.97 per share, which was the closing market price per share of our common stock on the NYSE on the last trading day of fiscal 2024. Our estimates of potential payments are further based on the additional assumptions specifically set forth in the tables below. Although these calculations are intended to provide reasonable estimates of potential compensation benefits payable, the estimated payment amounts may differ from the actual amount that any individual would receive upon termination or the costs to Ciena associated with continuing certain benefits following termination of employment. Payments upon death or disability Stock awards granted under our 2017 Plan provide for the acceleration of vesting of awards following a termination of service resulting from the holder’s death or disability. Acceleration of vesting upon death or disability applies to all awards granted under these plans, including awards to both executive officers and non-executive employees, as well as awards to our NEOs. In the case of RSUs, acceleration of vesting applies to such number of shares that would otherwise vest in the 12 months following a termination of service resulting from the holder’s death or disability. In the case of PSUs and MSUs, acceleration of vesting applies to such number of shares that have been earned, but not yet vested, under the award. In the case of PSUs or MSUs not yet earned or unearned, such awards are considered to have been forfeited and are not subject to any acceleration of vesting upon death or disability under the award agreement. However, beginning with the awards granted in December 2023, PSUs and MSUs not yet earned upon the holder’s death or disability will automatically vest, on a pro-rated basis, based on the number of days the holder was employed during the performance period, with performance assumed at target. For purposes of the foregoing, a disability is defined as inability to perform each of the essential duties of the applicable person’s position by reason of a medically determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a continuous period of not less than 12 months. For each NEO, the amount in the table below reflects the value of the NEO’s stock awards that are subject to acceleration of vesting upon death or disability multiplied by $63.97 per share, the closing market price per share of Ciena common stock on the NYSE on the last trading day of fiscal 2024. For each NEO, the amount in the table below reflects the value assuming they were still employed as of the last day of fiscal 2024.
Potential Payments Upon "Covered Termination"
Potential Payments Upon "Covered Termination"
Potential Payments Upon "Covered Termination"
| Name | Salary and Bonus Payment ($)(1) | Continuation of Benefits Coverage ($)(2) | Value Realized Upon Equity Acceleration ($)(3) | Total ($) | | Gary B. Smith | $6,250,000 | $32,791 | $26,485,499 | $32,768,290 | | James E. Moylan, Jr. | $1,760,445 | $32,791 | $6,583,792 | $8,377,028 | | Dino DiPerna | $1,253,879 | $9,962 | $3,531,080 | $4,794,921 | | Jason M. Phipps | $1,693,800 | $45,400 | $6,260,552 | $7,999,752 | | David M. Rothenstein | $1,509,840 | $45,400 | $5,509,928 | $7,065,168 |
Potential Payments Upon "Covered Termination"
(1) Reflects pre-tax severance payments to each NEO based upon: (a) annual salary in effect as of the end of fiscal 2024, and (b) annual cash incentive compensation payable during fiscal 2024 at the target level. (2) Includes aggregate incremental costs for continuation of medical and dental benefits as used for financial statement reporting purposes, assuming we are able to continue such existing coverage and continuation costs are commensurate with costs incurred for such coverage during fiscal 2024 despite the NEO’s non-employee status. (3) Reflects the conversion of PSU and MSU awards upon change in control and value associated with the resulting acceleration of vesting as described in "Payments Upon Change in Control" above, together with the acceleration of stock awards upon a covered termination. Amounts reported reflect estimates with respect to acceleration of stock awards only. Calculations in the table below with respect to PSUs and MSUs that have not yet been earned reflect estimated values based upon the "target" level of achievement. Applicable Definitions. For purposes of determining whether a change in control or covered termination has occurred under the change in control severance agreements, the following terms generally have the following meanings: "Cause" means: the officer’s willful and continued failure substantially to perform the duties of his position, as determined by the Board of Directors following written notice to the officer; • any willful act or omission constituting dishonesty, fraud or other malfeasance; • any willful act or omission constituting immoral conduct or gross misconduct; • any willful material violation of our Code of Business Conduct and Ethics or Proprietary Information, Inventions and Non- Solicitation Agreement; or • the officer’s conviction of, or plea of nolo contendere to, a felony or crime of moral turpitude under federal or state law or the laws of any other jurisdiction in which Ciena conducts business. "Good reason" means: • removal from, or failure to be reappointed or reelected to, the officer’s principal position held immediately prior to the change in control; • material diminution in the officer’s position, duties or responsibilities, or the assignment of duties that are inconsistent, in any material respect, with those held immediately prior to the change in control; • material reduction in base salary, incentive compensation opportunity or participation in other long-term incentive or benefit plans as in effect immediately before the change in control; • relocation of principal workplace, without the officer’s consent, by more than 50 miles; or • the failure to obtain the assumption of the change in control severance agreement by any successor company; provided, in each case, that (a) the officer notifies Ciena of the foregoing conditions within 90 days of the initial existence of the condition, (b) Ciena has been given at least 30 days following notice to cure such condition, and (c) the officer actually terminates employment within one year following the initial existence of the condition. "Change in control" means: • the direct or indirect sale or exchange by our stockholders of all or substantially all of our outstanding stock, or a merger or consolidation, transaction, in each case, where the stockholders before such transaction do not retain at least a majority voting interest in the acquiring corporation after such transaction; • the sale, exchange or transfer of all or substantially all of our assets; • a change in the composition of the Board within a two-year period, as a result of which less than a majority of the directors are incumbent directors (as defined in the agreement); • our liquidation or dissolution; or • any other event determined to be a change in control by our Board of Directors. In each case, the determination of whether a "change in control" has occurred shall be made without regard to whether such events were hostile or against the position of the Board of Directors or were approved or concurred with by the Board of Directors. CEO pay ratio disclosure As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our median employee and the annual total compensation of our CEO.
Potential Payments Upon "Covered Termination"
| CEO Pay Ratio | | | CEO Annual Total Compensation * | $14,076,773 | | Median Employee Annual Total Compensation | $99,735 | | CEO to Median Employee Pay Ratio | 141:1 |
Potential Payments Upon "Covered Termination"
* Represents amount of total compensation from Fiscal 2024 Summary Compensation Table Methodology Our CEO pay ratio is an estimate calculated in a manner consistent with SEC rules and based upon our reasonable judgment and assumptions. As permitted by SEC rules, we used the same median employee selected for fiscal 2023, who is a full-time employee located in Canada, because there has been no change in our employee population or compensation arrangements that we believe would result in a significant change to our pay ratio disclosure. Upon determining that we would use the same median employee selected for fiscal 2023, we calculated our median employee’s annual total compensation for fiscal 2024 according to the SEC’s instructions for preparing the Summary Compensation Table. We applied an exchange rate of 1 CAD to 0.716666 USD as of November 2, 2024, to convert the median employee's earnings into U.S. dollars. We then calculated our CEO’s annual total compensation according to the SEC’s instructions for preparing the Summary Compensation Table and calculated the ratio between the two numbers. The disclosure presented above is a reasonable estimate. Because the SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, exemptions, estimates and assumptions, this disclosure may not be comparable to the pay ratio reported by other companies. Pay versus performance The following table and related disclosures has been prepared in accordance with Item 402(v) of Regulation S-K, and do not necessarily reflect the economic benefit actually earned, received, or realized by our NEOs, the method by which the Compensation Committee makes compensation determinations, or how the Compensation Committee views the relationship between Ciena’s financial performance and NEO compensation. For example, a significant portion of "compensation actually paid" relates to changes in the fair value of unvested equity awards over the course of each year, and the ultimate value realized by our NEOs from unvested equity awards is not determined until the awards vest. For a discussion of our executive compensation program and the Compensation Committee’s decision-making process in determining and approving our NEOs’ compensation, see "Compensation Discussion and Analysis" above. Pay versus performance table
Potential Payments Upon "Covered Termination"
| | | | | | Value of Initial Fixed $100 Investment Based On: (3) | | | | | Fiscal Year (1) | Summary Compensation Table (SCT)Total for PEO | Compensation Actually Paid (CAP) to PEO (2) | Average SCT Total for Non-PEO NEOs | Average CAP to Non-PEO NEOs (2) | Ciena Total Shareholder Return (TSR) | Peer Group TSR | Net Income (in thousands) | Ciena Revenue (4) (in thousands) | | 2024 | $14,076,773 | $23,208,434 | $3,507,354 | $5,365,965 | $144.53 | $109.00 | $83,956 | $4,014,955 | | 2023 | $15,431,410 | $10,330,867 | $3,956,502 | $2,894,005 | $88.69 | $79.54 | $254,827 | $4,386,549 | | 2022 | $12,017,980 | $8,210,990 | $3,200,888 | $2,227,016 | $88.93 | $105.69 | $152,902 | $3,632,661 | | 2021 | $11,450,851 | $22,399,417 | $3,082,875 | $5,147,573 | $114.00 | $142.96 | $500,196 | $3,620,684 |
Potential Payments Upon "Covered Termination"
(1) Mr. Smith was the principal executive officer ("PEO") for all four fiscal years in the table. For fiscal 2021-2023, Messrs. Moylan, McFeely, Phipps, and Rothenstein were the Non-PEO NEOs. For fiscal 2024, Messrs. Moylan, DiPerna, Phipps, and Rothenstein were the Non-PEO NEOs. (2) The dollar amounts reported represent the amount of "compensation actually paid" ("CAP"), as calculated in accordance with Item 402(v) of Regulation S-K and do not reflect the actual amounts of compensation earned by or paid to our NEOs during the applicable fiscal year. For purposes of calculating CAP, the fair value of equity awards is calculated in accordance with FASB ASC Topic 718 using the same assumption methodologies used to calculate the grant date fair value of awards for purposes of the Summary Compensation Table (refer to "Executive Compensation — Fiscal 2024 Summary Compensation Table" for additional information). The Change in Fair Value of Outstanding and Unvested Equity Awards, Year-Over-Year and CAP used in the table for 2021, 2022, and 2023 reflect corrections to the fair value of earned but unvested MSU awards as compared to the values used in the proxy statement for our 2024 Annual Meeting (the “2024 Proxy Statement”). As corrected, the calculation of these amounts uses the fair value of the actual number of shares earned by each NEO at the end of the relevant measurement period rather than the target number of shares. In the 2024 Proxy Statement, the amounts for the Change in Fair Value of Outstanding and Unvested Equity Awards, Year-Over-Year and CAP were understated by $3,410,941 and $598,948 for fiscal 2021, overstated by $962,532 and $172,979 for 2022, and overstated by $392,686 and $70,559 for 2023, in each case with respect to the PEO and the Non-PEO NEOs, respectively.
Potential Payments Upon "Covered Termination"
| | Fiscal 2024 | | Fiscal 2023 | | Fiscal 2022 | | Fiscal 2021 | | | | PEO | Average Non-PEO NEOs | PEO | Average Non-PEO NEOs | PEO | Average Non-PEO NEOs | PEO | Average Non-PEO NEOs | | Summary Compensation Table (SCT) Total | $14,076,773 | $3,507,354 | $15,431,410 | $3,956,502 | $12,017,980 | $3,200,888 | $11,450,851 | $3,082,875 | | Deduction for Amounts Reported as "Stock Awards" in SCT | (12,069,792) | (2,612,077) | (12,933,210) | (2,871,987) | (11,005,780) | (2,644,856) | (8,589,251) | (1,849,692) | | Increase for Fair Value of Equity Awards Granted in the Year and Unvested as of Year End | 14,023,720 | 3,047,358 | 7,444,016 | 1,696,980 | 5,808,224 | 1,396,651 | 10,365,414 | 2,141,480 | | Increase for Fair Value of Equity Awards Granted and Vested in the Year | 983,792 | 270,087 | 857,427 | 247,599 | 486,233 | 148,357 | 718,030 | 193,519 | | Change in Fair Value of Outstanding and Unvested Equity Awards, Year-Over-Year | 5,554,341 | 1,003,205 | (555,276) | (148,410) | (3,145,110) | (603,900) | 4,527,985 | 909,187 | | Change in Fair Value of Equity Awards Vested, Granted in a Previous Year | 639,600 | 150,038 | 86,500 | 13,321 | 4,049,443 | 729,875 | 3,926,389 | 670,203 | | Compensation Actually Paid | $23,208,434 | $5,365,965 | $10,330,867 | $2,894,005 | $8,210,990 | $2,227,016 | $22,399,417 | $5,147,573 |
Potential Payments Upon "Covered Termination"
Ciena and Peer Group TSR was determined based on an initial fixed investment of $100 on October 30, 2020. Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between Ciena’s share price at the end and the beginning of the measurement period by our share price at the beginning of the measurement period. The Peer Group TSR set forth in the Pay Versus Performance Table was determined using the S&P Networking Index, a published industry or line-of-business index which we also used in preparing the stock performance graph included in our 2024 Form 10-K as required by Item 201(e) of Regulation S-K. (4) We have determined that revenue is the financial performance measure that, in Ciena’s assessment, represents the most important financial performance measure used to link "compensation actually paid" to our NEOs for fiscal 2024 to company performance. Pay versus performance relationship descriptions The principal objectives of our executive compensation program are to attract and retain talented executive officers by offering competitive compensation packages, motivate our executive officers to achieve strategic and tactical objectives, including the profitable growth of Ciena’s business, align executive compensation with stockholder interests, reward our executive officers for individual, functional, and corporate performance, and promote a "pay-for-performance" culture, and each element of our executive compensation program is linked to these objectives.
Compensation Actually Paid and Total Stockholder Return
Compensation Actually Paid and Total Stockholder Return The following graph illustrates the relationship between "compensation actually paid" to our PEO and the average amount of "compensation actually paid" to our non-PEO NEOs, our cumulative TSR and our cumulative peer group TSR for fiscal 2021, fiscal 2022, fiscal 2023, and fiscal 2024, each as set forth in the "Pay versus performance table" above. The cumulative TSR amounts in the graph assume an initial investment of $100.00 on October 30, 2020.
Compensation Actually Paid and Net Income
Compensation Actually Paid and Net Income The following graph illustrates the relationship between "compensation actually paid" to our PEO and the average amount of "compensation actually paid" to our non-PEO NEOs and our net income for fiscal 2021, fiscal 2022, fiscal 2023, and fiscal 2024, each as set forth in the "Pay versus performance table" above.
Compensation Actually Paid and Revenue
Compensation Actually Paid and Revenue The following graph illustrates the relationship between "compensation actually paid" to our PEO and the average amount of "compensation actually paid" to our non-PEO NEOs and our revenue for fiscal 2021, fiscal 2022, fiscal 2023, and fiscal 2024, each as set forth in the "Pay versus performance table" above. Tabular list of financial performance measures The table below lists the financial performance measures that the Compensation Committee believes represent the most important financial performance measures used to link "compensation actually paid" to our NEOs to Ciena’s performance for fiscal 2024. Revenue and Adjusted Operating Income are the financial performance measures used to determine performance-based cash bonuses under the Annual Cash Incentive Bonus Plan, aggregate sales orders and adjusted earnings per share are the financial performance measures used to determine the earning of PSU awards, and total stockholder return is the financial performance measure used to determine the earning of MSU awards. See "Compensation Discussion and Analysis" above for a further description of our executive compensation program. The performance measures included in this table are not ranked by relative importance.
Compensation Actually Paid and Revenue
| Revenue (Company Selected Measure) | | Adjusted Operating Income | | Aggregate Sales Orders | | Adjusted Earnings Per Share | | Total Stockholder Return |
Compensation Actually Paid and Revenue
Annual advisory "say-on-pay" vote to approve our named executive officer compensation Our Board of Directors recognizes stockholders’ interest in our executive compensation program. In accordance with Section 14A of the Exchange Act and related SEC rules, we are asking stockholders to approve a non-binding advisory resolution on the compensation of our NEOs. We encourage stockholders to read the "Compensation Discussion and Analysis" and "Executive Compensation Tables" in this proxy statement for a more detailed discussion of our executive compensation program and policies, the compensation governance measures undertaken and implemented by our Board of Directors, and the compensation awarded to our NEOs during fiscal 2024. We actively review and assess our executive compensation program in light of the dynamic industry in which we operate, the evolving marketplace in which we compete for executive talent, and changes in compensation governance best practices. We are focused on compensating our executive officers fairly and in a manner that promotes our compensation philosophy.
Compensation Actually Paid and Revenue
| Compensation Objectives | | | ❖ Attract and retain talented executives by offering competitive compensation packages ❖ Motivate executives to achieve strategic and tactical corporate objectives, including the profitable growth of Ciena’s business | ❖ Align executive compensation with stockholder interests ❖ Reward executives for individual, functional and corporate performance ❖ Promote a pay-for-performance culture |
Compensation Actually Paid and Revenue
Our Board of Directors believes that our executive compensation program has been designed and executed to satisfy these objectives, and that our compensation program is worthy of stockholder support. In considering our executive compensation program for fiscal 2024, we believe it is important to view the Compensation Committee’s decision-making against the backdrop of our overall corporate governance, our fiscal 2024 business and financial performance, and the pay practices of the companies with whom we compete for talent. We have deliberately structured our core compensation principles and practices to align executive compensation with the interests of our stockholders and to avoid certain compensation practices that do not serve our stockholders’ interests. We continue to evaluate and modify these principles and practices as necessary in order to achieve these objectives. In this regard, we believe that stockholders should consider the "Compensation Discussion and Analysis" in this proxy statement, and in particular the "Decision-making framework – Executive compensation best practices" therein. The Board recommends that stockholders vote in favor of the following resolution:
Compensation Actually Paid and Revenue
| "RESOLVED, that the stockholders approve, on an advisory basis, the compensation of Ciena’s named executive officers, as disclosed in Ciena’s proxy statement for its 2025 Annual Meeting of Stockholders pursuant to the rules of the Securities and Exchange Commission (including in the Compensation Discussion and Analysis, the compensation tables and related footnotes and narrative disclosures under the heading "Executive Compensation Tables")." |
Compensation Actually Paid and Revenue
Although this vote is advisory and is not binding on the Compensation Committee or the Board, the Compensation Committee and the Board value the input and views of our stockholders. The Board and the Compensation Committee will review the results of the vote and take them into consideration when considering future executive compensation policies and decisions.
Compensation Actually Paid and Revenue
| The Board of Directors recommends that you vote FOR the advisory approval of our named executive officer compensation |
Compensation Actually Paid and Revenue
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