Juniper Networks Under Pressure to Cut Salaries

Juniper Networks’ generosity to employees hasn’t gone over well with activist investor Elliot Management. The hedge fund is pressing for a better a deal for investors, in part at the expense of its workers.

Juniper NetworksIn an effort to pump up its share price, Elliot wants Juniper to cut costs by $200 million a year, streamline its portfolio of products and return up to $3.5 billion in cash to shareholders through buybacks and dividends. That cost-cutting would come from what Elliot considers extravagant spending on research and development and salaries.

Juniper paid the top salaries to software engineers ($159,990 in base pay), according to Glassdoor. LinkedIn came in second, at $136,427, followed by Yahoo ($130,312), Google ($127,143) and Twitter ($124,863).

In a presentation to investors, the hedge fund said:

  • As percentage of revenue, average R&D spending at peer companies is 11 percent compared with Juniper’s 21 percent.
  • The peer average for R&D dollars spent per R&D employee is $181, while Juniper spends $229.

The hedge fund owns a 6.2 percent stake in the company and believes its share price should be up to $40, rather than around $25.25 as it was Tuesday.

In October, Juniper announced plans to cut 280 jobs – 3 percent of its workforce. Its board is also reportedly in the final phases of its search for a new CEO – incumbent CEO Kevin Johnson has announced plans to leave. The new CEO could have different thoughts on how well the company pays its staff.

Comments

  1. BY Fred Bosick says:

    6% of company stock? They should just ignore the miser.

  2. BY oregon111 says:

    “Juniper paid the top salaries to software engineers ($159,990 in base pay), according to Glassdoor. LinkedIn came in second, at $136,427, followed by Yahoo ($130,312), Google ($127,143) and Twitter ($124,863).”

    I dont know what juniper does, but the rest are just simply “code and server” companies…

    what I mean by that is they have physical assets and make no physical products — like steel, for example

    it would be FUN to get some IT friends together and copy their businesses and put it out on the web and make millions!

    how hard can it be?

    • BY oregon111 says:

      to my prev post – and if its illegal? lets just go to mexico and set up shop

  3. BY VADATAGUY says:

    Just checked out the website for these whining Elliot Management clowns…a typical “mirage” website…looks pretty but has zero real content about the company…Juniper Networks produces great products with excellent an reputation for reliability and scalability. The R&D percentages detailed above indicate to me that Juniper is maintaining its R&D efforts while others have fallen on the sword of the financiers and hedge fund managers…

    Why dont we just let the new CEO make the decisions regarding the company and leave these whining hedge fund clowns go sell their measley 6%…you cant tell me that they havent hedged their bet both ways anyway…

  4. BY Sumogallo says:

    “The hedge fund is pressing for a better a deal for investors, in part at the expense of its workers.”
    What’s the b or c deal? Is that in the works?

Post a Comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>