Afternoon, and welcome to Ciena Corporation's 2021 Annual Meeting of Stockholders. I would now like to introduce the first presenter, David Rothenstein, Senior Vice President, General Counsel, and Secretary.
Thank you, and good afternoon. I'm David Rothenstein, Senior Vice President, General Counsel, and Secretary of Ciena Corporation. On behalf of our Board of Directors and Management Team, I'd like to welcome you to Ciena's 2021 Annual Meeting. For the ninth consecutive year, we are hosting a completely virtual annual meeting, with our stockholders participating exclusively via our web portal and by telephone. We believe that this approach provides expanded access, improves communication with stockholders, and yields cost savings. It is also particularly helpful this year, as many of our stockholders and others continue to deal with COVID-19-related disruptions. We continue to receive positive feedback from our stockholders as we adopt best practices and new technologies for our annual meeting, proxy statement, and related materials.
We evaluate annually the method of holding the annual meeting, taking into consideration stockholder feedback, as well as business and market conditions, and the proposed agenda items. It is 3:01 P.M. Eastern Time, and I will now call this year's annual meeting to order. In just a minute, we'll consider the four proposals on the agenda for today's meeting. After reviewing these proposals, our President and CEO and I will briefly discuss the current state of Ciena's business and key elements of our corporate strategy. First, however, I'd like to introduce certain members of the Ciena team who are on the line with me today: Gary Smith, our President and CEO; James Moylan, our CFO; and Gregg Lampf, our Vice President of Investor Relations. Representing PricewaterhouseCoopers, our independent auditors, is Scott Fuller. Scott will be available during the question-and-answer session to respond to appropriate questions.
Also on the line today is Jim Raitt from American Election Services, who has been appointed to act as Inspector of Elections. Jim has signed the required oath to faithfully and impartially execute his duties at this year's annual meeting. The four items of business under consideration today are: one, the election of directors, including four nominees to serve as Class III directors, two, the approval of the amendment and restatement of our employee stock purchase plan, three, the ratification of the appointment of PricewaterhouseCoopers as Ciena's independent auditors for fiscal year 2021, and four, a stockholder advisory vote on our named executive officer compensation. Under our bylaws, the deadline for nominating additional director candidates and for proposing additional matters for consideration at this year's meeting has passed. As a result, these proposals will be the only items to be voted on at this year's annual meeting.
Before proceeding to a vote, I'd like to address some procedural matters. Copies of the agenda and rules of conduct for today's meeting are available on our annual meeting web portal. After the formal business of today's meeting and Mr. Smith's presentation, we will provide an opportunity for stockholders to ask questions. Only stockholders who have entered their control number will be able to ask questions via the web portal. Please note that this meeting is being recorded and will be available on our annual meeting web portal by 5:00 P.M. Eastern Time tomorrow. However, no one else attending today's meeting is permitted to use any audio recording device.
I've been advised that Ciena properly mailed its Notice of Internet Availability of Proxy Materials on February 18th, 2021, to stockholders as of our record date, February 4th, 2021, and I've received an affidavit of distribution to that effect from our proxy distribution agent. According to a preliminary count conducted just prior to the meeting, approximately 134 million shares are represented at this meeting in person or by proxy. That represents approximately 87% of Ciena's shares outstanding on the record date, which is sufficient for a quorum under our bylaws. This meeting is now duly convened for the purpose of transacting business. I will declare the polls open at 3:04 P.M. Eastern Time on April 1st, 2021. The first item of business is the election of directors.
Today, we'll be electing four C lass III directors who will serve in office until the 2024 annual meeting or until their respective successors are elected and qualified. The board has nominated and recommends the election of Hassan M. Ahmed, Bruce L. Claflin, T. Michael Nevins, and Patrick T. Gallagher as Class III directors. Dr. Ahmed was previously appointed by the board last June in accordance with our bylaws. Information about each of these individuals was included in your proxy materials, including descriptions of their business experience and other qualities or characteristics considered by our board in nominating these individuals. As no other nominations were timely received, the nominations are closed. Is there a motion for election of these nominees?
I move for the election of the board's director nominees.
The second item of business is the approval of the amendment and restatement of our employee stock purchase plan to extend its term to April 1st, 2031, increase the number of shares available for issuance by 8.7 million shares, eliminate its evergreen mechanism, and make such other changes described in the proxy materials. The amendment was previously approved by the board and is fully described in your proxy materials. Is there a motion for approval of the amendment?
Move for the approval of the amendment and restatement of the employee stock purchase plan.
Thank you. The third item of business is the ratification of the audit committee's appointment of PricewaterhouseCoopers to serve as Ciena's independent registered public accounting firm for fiscal 2021. Is there a motion to that effect?
I so move that the appointment of PricewaterhouseCoopers be ratified.
The fourth and final item of business is our annual stockholder say-on-pay advisory vote regarding our named executive officer compensation. We encourage stockholders to read the compensation discussion and analysis and executive compensation table sections of our proxy statement. These sections provide a detailed discussion of our compensation programs and policies, the compensation governance measures used by our board of directors, and the compensation awarded to our executive officers in fiscal 2020. Is there a motion regarding the advisory vote on our named executive officer compensation?
I move for an advisory vote regarding the Named Executive Officer compensation described in this year's proxy materials.
At this time, if any stockholder would like to make a comment or ask a question regarding any of the four proposals, please submit your comment or question through the web portal. We'll pause now for any questions. Since there are no questions, we will proceed with the vote. I'll now ask that stockholders submit any final voting instructions via the annual meeting web portal. Any stockholder who hasn't yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions. Stockholders who have already sent in proxies or voted by telephone or the internet and do not want to change their vote do not need to take any further action. Now that everyone has had an opportunity to vote, I declare that voting is complete and the polls are now closed at 3:08 P.M.
Eastern Time on April 1st, 2021. I'll ask the Inspector of Elections to please tally any additional ballots submitted and prepare his report on the voting results. In a few minutes, we will receive the inspector's report on the preliminary voting results and complete the business of the annual meeting. A final tally of the votes at today's annual meeting will be reported in a Form 8-K to be filed with the SEC within four business days. In the meantime, it's now my pleasure to introduce Gary Smith, Ciena's President and CEO, who will provide our stockholders with an update on the state of our business. Before he proceeds, however, I want to remind you that during the course of today's presentation or in answers to questions raised by stockholders, we may make forward-looking statements regarding future events or the future performance of Ciena.
Such statements are based on our current expectations, forecasts, and assumptions, and include risks and uncertainties that could cause actual results to differ materially from the statements discussed today. These statements should be viewed in the context of the risk factors detailed in Ciena's filings with the SEC, and in particular, our 10-K for fiscal 2020 and our most recent 10-Q for the first quarter of fiscal 2021. We do not assume any obligation to update the information discussed in this presentation, whether as a result of new information, future events, or otherwise. Gary?
Thank you, David, and I appreciate the opportunity to talk with folks today around the business and some of the key strategic elements that we have going on in the business. First thing I would like to share with you, next slide, please, would obviously be our response to the COVID crisis, and in summary, I could not be more proud of the team and how we've performed in the various dimensions and challenges that have been put upon the globe. First of all, from a safety and community point of view, from a business continuity point of view, in terms of supply chain, et cetera, and I think we've furthered the financial strength of the business. It's been well demonstrated during these challenging times.
So I want to say thank you to all our employees who've excelled through their continued focus on the business, our customers, and the ecosystem, and for their kindness into the community, and for the business continuity that we've been able to achieve to our customers and from our partners. I want to say a big thank you. I think the financial strength that we've demonstrated really, I think, illustrates the long-term resiliency that we've built into our business and the differentiated financial position that we have among our competitors. Next slide, please. I think if you look at our portfolio, our value proposition is really about delivering and enabling an adaptive, intelligent network in all its various elements, both from a programmable infrastructure, the analytics, and the software control and automation. It continues to play an increasingly large role in this.
And if you really sort of step back from about what Ciena does, it's really about providing greater capacity, bandwidth, at higher speeds, at more efficiency, with greater automation, essentially closer to the customer. So when you think about 5G, data center, interconnect, submarine networks, basically, they are all sort of characterized as those elements that we bring from our portfolio. So I think as we've learned the value of the network, particularly during the last year or so with COVID, it only really puts a more important emphasis on the need to get bandwidth out to people faster and closer to the customers. And our portfolio continues to lead the way in that regard. Next slide, please. Our strategy has really been underpinned by three sort of execution elements, if you will, and they've been very consistent on the execution of our strategy over many years.
First of all, it starts with innovation, with the best in the world at what we do, which is basically moving optical bits in all their various forms, and we are the absolute market leader in that innovation. Diversification, we have a very broad-based business, lots of different customers, different applications within those customers, and different applications in terms of the market segment. So over time, we've built a diversified and resilient business. And that goes hand in hand as well with the global scale that is required to get the financial model to deliver the results that we are now delivering. So it's these three elements that have been consistently executed upon on many years that have put the company in the position that we're in. And you can see from our 2020 achievements, next slide, please, that we continue to push down strong on all of those elements.
The pace of innovation with the adaptive network continues to drive even during the COVID period. We are delivering innovations in all of our core technologies: WaveLogic 5, Blue Planet, and our Adaptive IP. We launched a number of new elements into the marketplace during the last 12 months, and as I said earlier on, that's reflected in the business model that we have, and our balance sheet is very strong. If you look at the performance, our adjusted operating margin was close to 18% for the year. Free cash flow resulted in about 66% of adjusting operating income, and we ended the year in a very strong cash position, and the underpinning and rooted in all of that is really our people and the ecosystem that we have with our partners and our customers and all the various elements to it.
So very proud of what we were able to achieve in 2020 as a result of all the hard work of our team. Next slide, please, and if we look at that in the context of really the last sort of four or five years, this looks at the last four years, you can see in all of the metrics, obviously, revenue was slightly down last year during the COVID period, really due to a cautious view by some of our customers, both operationally and fiscally. We believe that is now ameliorating, as we're seeing in our results in this current fiscal year, but you look at all the other metrics, I talked about the EPS increase last year, and you can see a steady increase over the last few years.
Operating expense as a percentage of revenue continues to come down, and our adjusted operating margin correspondingly continues to go up. All of the elements are really there to reinforce the business model that we've been able to establish over many years. Next slide, please. Further underlining the leadership that we have in the various elements that we bring into market, this really looks at the three main independent industry analysts. Really, the takeaway from this is that we are number one or number two in really every market segment that we play in, be it data center interconnect, be it submarine, be it metro links, be it access switching. All of those elements, we are number one or number two with global scale. As we look at the market going forward, the secular demand for what we do continues to be very strong.
I mean, basically, bandwidth and capacity in all of its various forms is required closer to the customer with ever-increasing degrees of automation and software intelligence, and this is where we have invested as a company over many years, and we are the innovation leaders and will continue to focus on our strategy going forward. With that, I'm going to hand over to David, who's going to give you an update on ESG and particularly on governance and sustainability. David.
Thank you, Gary. As Gary mentioned, I wanted to take just a few minutes to provide an update on a range of our ESG or sustainability initiatives, which perhaps have never been as important to our stakeholders, including our investors, our customers, our partners, and our employees. Next slide, please, so for Ciena, sustainability is effectively centered around these four key elements, and there were some notable highlights over the past year. With respect to people and culture, our people are obviously core to everything that we do, and we spend a lot of time seeking to nurture and develop our corporate culture. For example, this past year, we launched our People Promise, focused on empowerment, inclusion, and making a difference. We introduced new well-being platforms, including regular mental health well-being sessions and morale initiatives, and we created a new dedicated function focused on diversity, inclusion, and belonging.
On the environment, we partnered with Tree-Nation to offset a significant percentage of our operational emissions for 2019, and we made an enterprise-wide commitment to be carbon neutral across our global operations by the end of 2023. With respect to community outreach and our charitable activities, in the face of the COVID-19 pandemic, we tripled our corporate charitable matching program for employee donations. We offered volunteering time off with matching rewards for volunteering during working hours. We also donated PPE, and our Canadian operations 3D printed and designed face shields for healthcare workers. Finally, on corporate governance, as part of our ongoing commitment to board refreshment and diversity, we appointed a new independent director this past year. Our board now has three female directors out of 10 and two ethnically diverse directors. We also created a new function dedicated solely to corporate compliance and ethics. Next slide.
Turning to a specific ESG program of which we're particularly proud, in 2020, we launched our Digital Inclusion Initiative, and under this program, we committed $10 million over the next five years to promote digital access and inclusion for underserved students in our communities, and we're doing it through a combination of access, technology, and digital skilling. The work is taking a number of different forms, such as direct and in-kind contributions, volunteering, but especially partnering with our customers and other organizations. In particular, we publicly announced separate partnerships with Verizon, Bharti, and Spark in New Zealand to help bridge the digital divide with them in different ways. We're also in the process of working with several other organizations and are excited about expanding this program going forward. Next slide.
Finally, just to double-click for a moment on the environmental benefits of our innovation leadership, our industry-leading WaveLogic coherent modem solutions have yielded significant contributions to sustainability over the past 10 years. To put it in comparative terms, through the end of 2019, our energy-efficient product innovation led to the first four generations of our technology helped network operators avoid over 3.1 million metric tons of carbon emissions. That's the equivalent of 3.4 billion lbs of coal burned and roughly 80% of one year of emissions from a coal-fired power plant. We'll continue to deliver sustainability improvements with our next-generation WaveLogic 5 products, which yield 50% reductions in space and power consumption over its previous generation. These are just some of the elements of our ESG program, and we look forward to sharing additional ones with you in the future.
With that, we'd be happy to answer any questions posted at this time. Okay. Since there are no questions, we will return to completing the business portion of today's annual meeting. Has the Inspector of Elections tallied all of the votes?
I have. I am pleased to report that the count with respect to the election of Ciena's Class III director nominees indicates that Hassan M. Ahmed, Bruce L. Claflin, T. Michael Nevins, and Patrick T. Gallagher each received the majority of the votes cast in accordance with Ciena's bylaws. With respect to the approval of the amendment and restatement of the employees' stock purchase plan, the count indicates that the proposal has been approved by a majority of the votes cast. With respect to the ratification of the appointment of PricewaterhouseCoopers, the count indicates that the proposal has also been approved by a majority of the votes cast. Finally, I am pleased to report that with respect to the advisory say-on-pay vote, the count indicates that a majority of the votes cast approve the named executive officer compensation described in this year's proxy material, and that is all.
Thank you, Mr. Ray. Based on those votes, I declare that the four nominees have been duly elected as Class III directors. I declare that the amendment and restatement of the employee stock purchase plan has been approved. I also declare that the ratification of the appointment of PricewaterhouseCoopers has been approved. As the say-on-pay matter is advisory in nature, it is not binding. However, the board of directors values stockholders' opinions on this matter and will consider these voting results when determining named executive officer compensation matters in the future. With the business of this year's annual meeting complete, on behalf of Ciena's board of directors and management team, I'd like to express my sincere appreciation to the stockholders attending via the internet or by telephone and those of you submitting proxies for today's meeting.
Thank you for participating in our annual meeting and for your continued support of Ciena. There being no further business, the 2021 Annual Meeting of Stockholders of Ciena Corporation is now adjourned.
The Ciena Corporation's 2021 Annual Meeting of Stockholders has now come to an end. Thank you for attending. You may now disconnect.