In a localization agreement addressed to Wim Elfrink, Cisco’s chief globalisation officer Cisco is paying Elfrink US$ 700,000 this month and US$ 300,000 in January 2014 to accept a job in the US as its Executive VP, Emerging Solutions and Chief Globalisation Officer.
According to the agreement Elfrink is supposed to have already began his job in the US. The agreement says, “We are pleased to welcome you to the US team and are looking to the start of your employment with Cisco Systems, Inc. (the “Company”) on January 1, 2013.”
The agreement adds that the money is to help him relocate and settle in California.
US$ 1M For Relocation
It reads, “To assist with your transition to the US, we agree that you will receive cash payments of $700,000 in January 2013 and $300,000 in January 2014, subject to your continued employment with the Company.”
The agreement drafted by Randy Pond the Executive VP Operations, Processes, and Systems at Cisco will only be effective if Elfrink moves and doesn’t include paying for him his national, local income taxes and social taxes in his new location at San Jose, California.
According to the agreement Elfrink’s income earned last year will still be tax equalized according to the IAA till December 31, 2012.
However there are some good news too.
Elfrink will not receive tax equalization or gross-up for income incurred after 2012. Cisco will also pay his tax preparation fees for his home and local country income tax returns for 2012 and 2013 and his customary immigration services fees in 2013 as a facilitation to help him relocate. But this does not include fees for his his personal financial plans and his other personal tax services.
Elfrink will not be working for free.
His Annual Base Salary Is $775,000
The communication stipulates that, “Effective January 1, 2013, your annual base salary will be $775,000, less applicable taxes, deductions, and withholdings, and will be paid bi-weekly and subject to annual review.”
According to the agrrement Elfrink was effective January 1, 2013 eligible for the US employees benefits program except the 401(k) plan and the nonqualified deferred compensation plan for US employees.His Netherlands Capital Plan will run until his 65th birthday or termination of employment though his maximum pension salary minus statutory allowance is limited to Euro 735,300.
Who Is This Man
The 59 year old joined the firm in 1997 as VP Cisco Services in Europe and three years later was promoted to Senior Vice President, Cisco Services, and given global responsibility for the function. He grew the business from $3.3 billion to over $7.6 billion in 2010 with industry-leading margins and customer satisfaction. He is worth the price.