Cisco's Chambers Cashing In at Right Time

John Chambers isn't just a fearless captain of industry. No, the events of this week show that the Cisco (CSCO) CEO is a shrewd investor to boot.

Chambers pocketed $38.3 million Thursday selling Cisco shares as the stock hovered near 52-week highs. The move comes just days after the executive voiced his strongest prediction yet of an emerging tech-spending recovery.

Adding to the brilliant timing, the networking chief is selling at a time when his San Jose-based tech juggernaut just happens to be buying back shares at a record clip.

Investors certainly haven't been taking a cue from the chief in recent weeks. Cisco shares, flat at $22.70 Friday, have surged 14% since late October and are nearly double their year-ago level.

The Bold and the Beautiful

To his credit, Chambers made his boldest personal finance decision two years ago, when networking gear demand had all but vanished. Back then, he opted for stock options in lieu of salary, a risky move that has now turned into a windfall. The 16 million shares he's added to his option pile since 2001 are worth $363 million by today's prices, marking a significant improvement over the paltry seven-figure annual salary and bonus he otherwise would have collected.

According to federal filings, Chambers sold 2 million shares Thursday at prices between $22.50 and $22.74. That gives him a total take of about $45.2 million. The strike price on those shares was $3.45 and the options were due to expire in August 2004. So Chambers netted roughly $38 million on the sale.