CIENA CORP
For the period ended Mar 21, 2024. Filed Feb 8, 2024.
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Mar 21, 2024 · Filed Feb 8, 2024
Contents
Proxy statement summary
This summary highlights information that is contained elsewhere in this proxy statement. It does not include all information necessary to make a voting decision, and you should read this proxy statement in its entirety before casting your vote.
Ciena at a glance
Industry-leading, global networking systems, services and software company
| $4.39B FY23 Annual Revenue | $1.25B Cash Position at FYE 23 | Leading Market Position in the markets in which we operate* |
|---|---|---|
| 80+ Countries in which we sell products | 8,000+ Employees | 1,600+ Customers |
- As cited by Omdia, Dell’Oro Group, or Cignal AI for different markets
| Foundational strengths | Strategic initiatives | ||
|---|---|---|---|
| Leading technology & innovation we own the key enabling technologies for our solutions and use our significant R&D investment capacity to push the pace of innovation in our industry | Lead grow our core business by strengthening our optical innovation leadership, increasing optical market share, pursuing coherent pluggables, increasing international business and growing attached services | ||
| Diversification we have a broad-based business that spans a diverse set of customer segments, a wide range of solutions and applications, and multiple geographies | Invest invest in next generation metro and edge by expanding use cases for our portfolio and addressable market opportunity, promoting coherent routing solutions, and leveraging pluggable PON innovation | ||
| Global scale we have significant talent and deep resources in engineering, sales, services and customer support that advance our global business | Expand drive digital transformation and network automation, grow our software business, and pursue advanced services-led transformation |
| 2024 Proxy Statement | 1 |
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Business highlights
Fiscal 2023 business performance
| ❖ Delivered 21% year-over-year increase in revenue • Grew routing and switching revenue by 27% • Grew cloud provider revenue by 57% • Achieved record services revenue of $805 million ❖ Generated 43% year-over-year increase in annual adjusted earnings per share ❖ Significantly increased global market share in optical networking, and expanded addressable market and broadband access solutions portfolio with the acquisitions of Benu Networks and Tibit Communications | ❖ Continued to deliver industry-leading innovation with WaveLogicTM 5 Extreme, the most widely deployed 800G solution, and WaveLogic 5 Nano coherent pluggables ❖ Completed the buyback of $250 million of shares as part of an authorized share repurchase program, and ended the fiscal year with $1.25 billion in cash and investments ❖ Released an updated Sustainability Report and obtained approval from the Science Based Target Initiative of new greenhouse gas reduction goals |
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Fiscal 2023 financial performance
(approximate)
Contained above, and elsewhere in this proxy statement, are certainnon-GAAP measures of Ciena’s financial performance for fiscal 2022 and 2023. These measures, along with their corresponding GAAP measures and reconciliations thereto, were previously disclosed in exhibits to Ciena’s Current Report on Form 8-K filed with the SEC on December 7, 2023. Also see“Non-GAAP Measures” on page 94 for more information about these measures and how they are used.
| 2 | 2024 Proxy Statement |
Fiscal 2023 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 market median 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 for our CEO or other NEOs | Provided reasonable increases in the target value of annual equity awards for all NEOs, including our CEO, to improve alignment with the market |
Pay-for-performance alignment
| CEO fiscal 2023 target total direct compensation mix | Average non-CEO NEO fiscal 2023 target total direct compensation mix |
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| 2024 Proxy Statement | 3 |
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Corporate governance and stockholder outreach
Stockholder outreach and engagement
We believe that strong corporate governance practices should include regular outreach and conversations with our stockholders, with whom we regularly discuss our business, financial performance, industry dynamics, compensation, and ESG matters. We actively seek engagement with stockholders of all sizes through a combination of virtual andin-person engagements, including our annual meeting, our website, investor conferences, andone-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 material stockholder engagements as well as any 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. 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 capital allocation priorities.
In May 2023, we published our 2022 Sustainability Report and, in October 2023, we published an updated ESG investor presentation, both of which are available publicly on our website. We proactively distributed this information to our top 17 stockholders, representing approximately 54% 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
| Bylaw amendments | Policies and charters |
|---|---|
| Amended and restated our Bylaws in fiscal 2023 in connection with our periodic governance review, including to: • address updates to align with recently adopted on universal proxy rules • update our advance notice bylaw to reflect current best practices for stockholder nomination disclosure and procedural requirements • address recent changes to Delaware law • use gender-neutral language • reflect other current good governance practices | Updated policies and charters to reflect alignment with good governance practices: • Code of Ethics for Directors • Principles of Corporate Governance • Charters of standing Board committees Updates included mechanisms to prevent anticompetitive or interlocking directorates, additional restrictions intended to avoid potential conflicts of interest, and additional clarity on oversight of aspects of our sustainability strategy and program |
| Environmental, social, and governance | |
|---|---|
| • Published 2022 Sustainability Report • Through carbon reduction initiatives, investments in renewable energy and offsets, advanced our efforts to be carbon neutral for our fiscal 2023 CDP-reported operational emissions (excludes certain Scope 3 categories) • 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 | • Increased gender and ethnic diversity in our leadership by appointing a new independent director and new members of the executive leadership team • Through a range of volunteering and charitable activities, Ciena and its employees contributed approximately $3 million and volunteered more than 35,000 hours • Published updated ESG investor presentation and conducted stockholder outreach • Awarded 20 schools with a Ciena Solutions Challenge Sustainability Award to help them bring to life innovative solutions to sustainability challenges affecting their local communities |
Existing strong governance structure
| • Eight of ten current directors are independent • Lead Independent Director • Separate Board Chair and CEO roles • 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 |
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| 4 | 2024 Proxy Statement |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.