(Updates with Cisco spokeswoman in fourth paragraph.)
Oct. 10 (Bloomberg) -- Cisco Systems Inc. shareholder Ralph Nader, a former presidential candidate and consumer advocate, reiterated a call for Chief Executive Officer John Chambers to issue a special dividend and increase the existing one.
“My sense is that you really do not resonate with your shareholders who trusted you and relied on you,” Nader said in a statement. “Give them the dividend respect their continuity with you deserves.”
Nader is putting pressure on Chambers to use part of Cisco’s $38.9 billion in cash and short-term investments to more than double its dividend, now at 24 cents a year. He also urged the company to issue a one-time dividend of $1 a share. Cisco’s stock has come under pressure as the company scales back sales- growth projections amid price competition and slow demand.
“We engage with our shareholders consistently and value their input,” said Karen Tillman, a spokeswoman for San Jose, California-based Cisco. “We have moved aggressively and decisively with our action plan to deliver profitable growth and we continue to evaluate optimal use of capital, with a clear focus on providing consistent, meaningful return to shareholders.”
Nader initially made the dividend demands, including a request for 50 cents a year, in June. He said in an interview that the company’s responses indicate it’s not taking his request seriously.
If the company doesn’t announce the one-time dividend and an increase by the end of the month, Nader plans to ask Cisco shareholders to pledge a penny for each share they own, to pay the costs of assigning a “watchdog” to monitor the company’s behavior. The watchdog could be a public interest lawyer or an “out-of-work investigative journalist,” Nader said in an interview. “I hear there are some of those around.”
Nader said investors would not need to send any money until enough had been raised to pay the advocate.
Cisco said in November it was adding $10 billion to a stock repurchase program. The company’s board had previously given a green light to as much as $72 billion in repurchases.
Cisco rose 43 cents to $17.09 today in New York.
The company said on Sept. 13 that it expects sales growth of 5 percent to 7 percent by 2014, ditching an earlier forecast for growth of 12 percent 17 percent.
--Editors: Tom Giles, Donna Alvarado
To contact the reporter on this story: Peter Burrows in San Francisco at email@example.com
To contact the editor responsible for this story: Tom Giles at firstname.lastname@example.org