Main image of article 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. In 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.