David M. Rothenstein
CIENAAbout David M. Rothenstein
Senior Vice President, Chief Strategy Officer, and Corporate Secretary at Ciena. He joined Ciena in 2001 and was appointed Chief Strategy Officer on January 24, 2023, after serving as SVP & General Counsel for over 14 years; he also leads sustainability, enterprise risk management, and corporate real estate . Education: J.D. with honors, The George Washington University Law School; B.A. magna cum laude, Tufts University . Under his tenure as CSO, Ciena delivered FY24 revenue of $4.01B and maintained strong TSR alignment, with 2022–2024 MSUs earned at 110% due to 8.43% TSR vs 3.63% index return (+4.79% relative) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ciena | Senior Vice President, Chief Strategy Officer and Corporate Secretary | 2023–present | Leads strategic planning, M&A/ventures, partnerships; oversees sustainability, ERM, and real estate; moved from acting CSO (Mar 2022) to permanent CSO (Jan 24, 2023) . |
| Ciena | Senior Vice President, General Counsel & Corporate Secretary | 2008–2023 | Managed worldwide legal; led compliance & ethics and government relations; key role in Nortel MEN acquisition; led HR for a year and created Management Development Program . |
| Ciena | Assistant General Counsel; then VP & Associate General Counsel | 2001–2008 | Early in-house counsel; progressed to lead major transactions and governance . |
| Paley Rothman (law firm) | Trial Lawyer → Partner | Pre-2001 | Corporate, employment, technology law and litigation; outside counsel to tech startups and M&A sales . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Lumiphase AG | Board Director | N/A | Photonics/semiconductor exposure; adjacent tech insights . |
| American University, Kogod School of Business | Advisory Council Member | N/A | Business education advisory and network . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 515,000 | 533,854 | 565,000 |
| Target Bonus (% of salary) | 80% | 80% | 80% |
| Actual Annual Cash Incentive ($) | — | 428,314 | 290,784 |
Notes:
- Target bonus percent unchanged at 80% in FY24; base salary increased 3.4% to $559,200 (annualized target basis listed at $565,000 due to 53-week FY24; plan target remains 80%) .
Performance Compensation
FY2024 Annual Cash Incentive Plan Outcome (Company-wide Plan)
| Component (Weight) | Target | Actual | Component Payout | Vesting/Payment |
|---|---|---|---|---|
| Revenue (40%) | $4,600M | $4,015M | 69.5% | Cash paid at year-end |
| Adjusted Operating Income (30%) | $734M | $465.8M | 0% | Cash |
| Corporate Objectives (30%) | 4 of 6 = 100% | 5 achieved | 125% | Cash |
| Total Payout vs Target | — | — | 65% of target | Cash |
Result for Rothenstein: $290,784 cash bonus (65% of target) .
FY2024 PSU Program (One-year performance; vests over 2 years)
| Metric (50% each) | Threshold | Target | Maximum | Actual | % of Target Earned | Vesting |
|---|---|---|---|---|---|---|
| Aggregate Sales Orders | $3,214M (50%) | $4,017M (100%) | $4,620M (200%) | $3,595M | 80% | 50% in Dec-2024, 50% in Dec-2025 |
| Adjusted EPS | $2.07 (50%) | $2.95 (100%) | $3.84 (200%) | $1.82 | 0% | Same as above |
| Total Earned | — | — | — | — | 40% of target | As above |
PSUs earned for Rothenstein: 6,333 shares (40% of 15,833 target) .
MSUs (Relative TSR over FY2024–FY2026; vests end of period)
| Metric | Payout Curve | Status |
|---|---|---|
| Relative TSR vs median company in S&P North American Tech–Multimedia Networking Index | 0% at -50 ppt, 100% at equal, 200% at +50 ppt; straight-line between points | In progress; cliff vests Dec-2026 . For historical 2022–2024 MSUs, Ciena TSR 8.43% vs index 3.63% → 110% earned (vested Dec-2024) . |
Equity Grants and Vesting (FY2024 awards)
| Equity Type | Grant Date | Shares (#) | Target Value ($) | Grant Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| RSUs | 12/12/2023 | 26,388 | 2,299,978 | 2,486,379 | Quarterly 1/16 over 4 years |
| PSUs (target) | 12/12/2023 | 15,833 | — | — | Earned at 40% (6,333); vests 50% Dec-2024/50% Dec-2025 |
| MSUs (target) | 12/12/2023 | 10,555 | — | — | Relative TSR; vests Dec-2026 |
FY2024 stock awards recognized in SCT for Rothenstein: $2,486,379 .
Outstanding Equity at FY2024 Year-End (Selected lines for Rothenstein)
| Grant Date | Type | Unvested/Earned Units (#) | Notes |
|---|---|---|---|
| 12/12/2023 | PSUs (earned) | 6,333 | 40% of target earned; vests Dec-2024/Dec-2025 |
| 12/12/2023 | RSUs | 21,441 | Quarterly vest through Dec-20-2027 |
| 12/12/2023 | MSUs (target) | 10,555 | Performance period FY2024–2026 |
| 12/13/2022 | PSUs (earned) | 2,120 | Remaining earned PSUs vested Dec-20-2024 |
| 12/13/2022 | RSUs | 12,420 | Quarterly vest through Dec-20-2026 |
| 12/13/2022 | RSUs | 3,726 | Quarterly vest through Dec-20-2026 |
| 12/13/2022 | MSUs (in-flight) | 8,832 | FY2023–2025 cycle |
| 12/14/2021 | RSUs | 4,463 | Quarterly vest through Dec-20-2025 |
| 12/14/2021 | MSUs (earned) | 6,283 | 110% earned; vested Dec-20-2024 |
Vesting cadence creates potential trading windows around Mar 20, Jun 20, Sep 20, Dec 20; PSUs deliver in December; MSUs are cliff vesting at cycle end .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Jan 27, 2025) | 156,551 shares owned; 5,221 “right to acquire” within 60 days; total 161,772; <1% of outstanding . |
| Ownership Guidelines | Executives must hold stock equal to 2x base salary; 50% of net shares from equity awards must be held until guideline met . |
| Hedging/Pledging | Prohibited for all employees and directors; 10b5-1 plans permitted under policy . |
| Deferred Compensation | Elected deferrals in FY2024: $214,157; aggregate balance $2,207,936 at Nov 2, 2024 . |
| Section 16 Compliance | Two late Forms 4 (administrative timing); one transaction . |
No disclosure of pledged shares; policy prohibits pledging .
Employment Terms
| Topic | Key Terms |
|---|---|
| Employment Agreement | None; at-will . |
| Severance (without cause) | U.S. Executive Severance Plan: 1x salary + target bonus; benefits continuation ~12 months; outplacement; for Rothenstein: $1,006,560 cash and $32,084 benefits/outplacement estimated = $1,038,644 . |
| Change-in-Control (CIC) | Double-trigger. Performance awards convert to time-based at target on CIC; on covered termination within 12 months post-CIC (90 days pre also covered), all unvested equity vests; severance at 1.5x salary + target bonus; benefits continuation; best-net cutback (no tax gross-up) . |
| CIC Economics (Illustrative at FY2024 price) | Salary+bonus $1,509,840; benefits $45,400; equity acceleration value $5,509,928; total $7,065,168 . |
| Non-Compete/Non-Solicit | 12 months as condition for severance/CIC payments (18 months for CEO) . |
| Clawback | NYSE-compliant policy plus broader recoupment in plans; no indemnification for clawback losses . |
| Retirement Treatment | Continued vesting for RSUs and pro-rated PSUs/MSUs upon Qualifying Retirement (≥60 yrs, 10 yrs service, 12 months’ notice); as of Nov 2, 2024, not disclosed as applicable to Rothenstein; CEOs/CFOs listed; cash bonus pro-rated for eligible retirees . |
Multi‑Year Compensation Summary (NEO SCT values)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 515,000 | 533,854 | 565,000 |
| Stock Awards ($) | 2,294,362 | 2,667,176 | 2,486,379 |
| Non-Equity Incentive Plan Comp ($) | — | 428,314 | 290,784 |
| All Other Comp ($) | 12,200 | 13,200 | 15,658 |
| Total ($) | 2,821,562 | 3,642,544 | 3,357,821 |
Compensation Structure Analysis
- Mix and risk: FY2024 LTI split for non-CEO NEOs was 50% RSUs (time-based), 30% PSUs (one-year performance on Sales Orders and Adjusted EPS), 20% MSUs (three-year relative TSR); increases retention but includes at-risk components tied to top-line, profitability, and market-relative TSR .
- Goal rigor and outcomes: FY2024 cash plan paid 65% of target (revenue under plan, AOI below threshold, 5/6 corporate objectives achieved) indicating downside protection; PSUs earned at 40%; 2022–2024 MSUs paid at 110% due to TSR outperformance (+4.79 ppt vs index) .
- Year-over-year: Base salary up 3.4% in FY2024; target cash opportunity unchanged; equity target value methodology changed to grant-date fair value basis (reducing variance), with Rothenstein’s FY2024 grant fair value slightly below FY2023 .
Performance & Track Record
- Strategic execution: As CSO, led three-year strategic planning, corporate strategic scorecard, strategic investments, real estate optimization, and sustainability initiatives; acted as corporate spokesperson to the financial community . In 2023 proxy, credited with supervising acquisitions of Benu Networks and Tibit Communications and establishing investment governance .
- Business performance context: FY2024 revenue $4.01B; record $1.2B revenue from cloud providers; cash/investments ~$1.33B; buybacks completed $1B program and authorized new $1B (2025–2027) .
- Pay-for-performance alignment: FY2024 pay outcomes (cash 65%, PSUs 40%) tracked under-plan operating performance; TSR-aligned MSUs from the prior cycle paid 110% .
Risk Indicators & Red Flags
- Hedging/Pledging: Prohibited; strong insider trading controls; 10b5‑1 plans allowed .
- Clawback: NYSE-compliant and broader misconduct-based recoupment in plans; no gross-ups; best‑net cutback on 280G .
- Related Parties: No related person transactions in FY2024 within SEC threshold .
- Section 16 Compliance: Two late Forms 4 for Rothenstein (administrative timing) .
Compensation Peer Group & Say-on-Pay
- Peer group used for FY2024 comp decisions includes Akamai, Arista, Keysight, NetApp, Synopsys, Zebra, etc.; equity values set around third quartile to address executive market dynamics .
- Say-on-Pay support ~90% at prior annual meeting, indicating investor approval of design and outcomes .
Investment Implications
- Alignment and incentives: High proportion of at-risk pay (PSUs/MSUs at 50% of NEO equity) ties outcomes to revenue/orders, profitability, and TSR; FY2024 underperformance translated into below-target payouts, reinforcing pay-for-performance discipline .
- Selling pressure timing: Quarterly RSU vesting (Mar/Jun/Sep/Dec 20) plus December PSU/MSU deliveries can create predictable liquidity windows; pledging is prohibited, and 10b5‑1 plans are used, moderating discretionary timing .
- Retention/CIC risk: At-will with market-standard severance (1x) and CIC (1.5x) with double-trigger and conversion of performance awards to time-based upon CIC; no tax gross-ups; non-compete/non-solicit for 12 months supports retention post-transition .
- Ownership and skin-in-the-game: Beneficial ownership of ~162K shares and stock ownership guidelines (2x salary and 50% hold rule) support alignment; no pledging allowed .
- Track record: Demonstrated role in strategy/M&A and prior successful MSU cycle (110% earned) suggest credible strategic execution; FY2024 operating softness flowed through to incentive outcomes, consistent with investor expectations .