Good day and welcome to the Ciena Corporation Annual Meeting of Stockholders. I would now like to turn the conference over to David Rothenstein. Please go ahead.
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 2020 Annual Meeting. For the eighth consecutive year, we're hosting a c ompletely 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's also particularly helpful this year, as many of our stockholders and others 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 here on the line with me today: Gary Smith, our President and CEO, and Gregg Lampf, our Vice President of Investor Relations. Representing PricewaterhouseCoopers, our independent auditors, is Scott Thorp. 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 three nominees to serve as Class II directors and one nominee to serve as a Class I director. Two, the approval of the amendment of our 2017 Omnibus Incentive Plan to increase the number of shares available for issuance thereunder by 12.2 million shares. Three, the ratification of the appointment of PricewaterhouseCoopers as Ciena's independent auditors for fiscal year 2020. 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 19, 2020, to stockholders as of our record date, February 4, 2020, 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 139 million shares are represented at this meeting in person or by proxy. That represents approximately 90% 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 2, 2020. The first item of business is the election of directors.
Today, we will be electing three Class II directors who will serve in office until the 2023 annual meeting or until their respective successors are elected and qualified. The board has nominated and recommends the election of Judith M. O'Brien, Joanne B. Olsen, and Gary B. Smith as Class II directors. In accordance with our bylaws, we will also be electing one Class I director, previously appointed by the board last August, to serve the remainder of his term until the 2022 annual meeting or until his successor is elected and qualified. The board has nominated and recommends the election of Devinder Kumar as a Class I director. 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 so move for the election of the board director nominee.
The second item of business is the approval of the amendment of our 2017 Omnibus Incentive Plan to increase the number of shares available for issuance thereu nder by 12.2 million shares. 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?
I move for the approval of the amendment to the 2017 Omnibus Incentive Plan.
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 2020. Is there a motion to that effect?
I 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 Tables 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 2019. 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 a 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 2, 2020. 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'll 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 the 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.
Thank you, David.
David, Gary, one second, sorry. Before you proceed, I want to remind stockholders 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. Those statements are based on the 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 2019 and our most recent 10-Q for the first quarter of fiscal 2020. 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?
Thanks, David. I appreciate that and welcome, everybody. I appreciate the opportunity to talk with you today. Before I talk around the overall business and before I begin, I'd like to obviously address the COVID-19 situation. The pandemic is affecting all of us in some way. First and foremost, Ciena is taking extensive measures to ensure the safety and well-being of our employees and our extended family of customers and partners and ecosystem around the world. We have activated our business continuity plans to ensure that we continue to operate with minimal disruption. The vast majority of our employees are working remotely, not traveling, and are practicing appropriate social distancing and hygiene recommendations and we have shifted our engagement strategies to digital platforms and virtual collaboration tools so that we can remain in touch with one another and our customers and partners throughout the world.
Prior to this global health crisis, we made significant investments in our infrastructure, systems, and remote working capabilities, and we diversified our supply chain. As a result of these efforts, along with our ability to leverage our financial and operational strength, our business has continued to run with relative minimal operational disruption within the current environment. However, as everybody knows, the situation is obviously very fluid and uncertain at this time, and we're obviously not immune to potential broader business implications as it evolves. At a higher level, as an industry, we are indeed stewards of the immense networks that now connect and bind us together. In a world where social distancing is now the norm, it is the network that keeps us connected to loved ones, friends, colleagues, and important services.
Our customers are reporting rapid growth in bandwidth, demanding results from the dramatic shift in how we are living today. These demands stem from the exponential rise in remote working to maintain the flow of business and commerce, for distance education so our children continue to learn and develop, and e-gaming and streaming entertainment for the reprieve we all need. Importantly, our technology is essential to enabling the healthcare community, from first responders to hospitals and telemedicine for medical research, to treat patients and work to contain the spread of COVID-19, as well as for governments to coordinate efforts and communicate instructions to citizens. The network and its ability to connect people has a tremendous role to play in helping the world navigate and overcome the challenge of this coronavirus global pandemic.
We are all on this journey together, and I'm very honored that Ciena plays a critical role in serving the world's connectivity needs at this time. Unfortunately, we are well placed to do that. If we look at the business that we're in, Ciena is very well placed to be able to support the kind of network technology that we're talking about. And from an industry-leading global network systems and services and software company, our strategy is to be the best in the world at moving optical bits and also to automate all of the systems around them, which are critical at this time. We've developed a very diverse customer base and market segments that have multiple different applications, from wireless backhaul to long-haul and metro networks, interconnecting data centers, edge and access networks, packet aggregation, through to submarine networking. Next slide, please.
Our foundational strengths really have set us apart from the competition, and you've seen that in our financial performance over the last few years, our innovation, diversification, and global scale. On innovation, we are now clearly the market leader in the coherent technology that we pioneered, and we continue to push the pace of innovation in our industry. Diversification: we have a very broad base of customers around the world and different geographies and different applications. Global scale: we have significant talent and deep resources across multiple functions that are spread out around the globe. Next slide, please, and you can see that this strategy is clearly working. If you look at the 2019 key achievements, we are taking market share and outperforming the competition. Our balance sheet continues to strengthen, and we are forcing the pace of innovation with adaptive networking. Next slide, please.
As I said, this is showing up obviously in our financial performance. In terms of our revenue growth, outgrowing the industry, continuing to drive market share. In our adjusted growth in earnings per share, our adjusted operating expenses continue to come down as a percentage of revenue, and our adjusted operating margin continues to grow. This is the result of a very deliberate strategy of the three elements that I talked about: innovation, diversification, and scale, all coming together over a period of time to drive outstanding financial performance. This is further validated on the next slide of market leadership. We are universally regarded as number one in multiple of these markets. We are either one or two in every single market that we play in, and that continues to be recognized as the broad industry leadership that we now have.
Before I turn the presentation back over to David, I'd like to remind everyone, really, in summary, that we have the industry's leading innovation, global scale, and reach, and the financial and operational strength to continue to serve our customers and support the world's expanding connectivity needs during this pandemic now and as this situation continues to evolve. This is particularly relevant as the broader economy is faced with the growing uncertainty and market volatility at this time. Not only do we remain focused on delivering networks that can successfully adapt to ever-changing demands, we are fully committed to continuing to deliver and, during those volatile times, working to protect shareholder value, and in times like these, we believe our resiliency that we've built up as a business with our strategy will be a long-standing differentiator even when we emerge from this situation.
With that brief summary of the business, I'd like to turn back over to David to discuss our efforts around governance and sustainability. David.
Thank you, Gary. As many of you know, we've not typically discussed elements of our environmental, social, and governance programs, or ESG, at the annual meeting. However, over the past year, we've made a concerted effort to discuss our strategy and approach to ESG across various vehicles, including in our most recent 10-K, our annual report, and our proxy statement, and also on our website. So I'd like to take just a few minutes to review some of our ESG-related highlights. Next slide. First, with respect to governance. As you can see on this slide, we believe that we've done quite a bit in this regard. In particular, we've tried to be both proactive and responsive to market practice and input from our stockholders. With our board of directors, we've specifically focused our efforts in recent years on the composition of the board and its refreshment over time.
That's included appointing new directors, changing leadership positions, and reducing the overall tenure of the board. We've also maintained our historically strong approach to gender diversity on the board and recently improved our ethnic diversity as well. With respect to stockholders, we've substantially increased our outreach engagement in recent years, especially in communicating financial targets. We believe that we're one of the very few companies that provides the financial community with quarterly guidance, annual guidance, as well as three-year longer-term financial targets. We also conducted our first ESG roadshow with top stockholders late last year, as it's a topic of great interest for them, which gave us an opportunity to discuss our efforts in these areas in great detail and also to get their feedback and perspectives as well.
Separately, for the past few years, we've also directly incorporated the return of capital to shareholders as part of our capital allocation strategy with the implementation of the stock repurchase program, and finally, on governance policies, we have a very strong set of policies and practices in place, ranging from stock ownership guidelines to a full set of corporate governance vehicles, as well as having issued our first CSR, or corporate social responsibility report, last year. Next slide. Another key element of our ESG strategy centers around human capital management, and there's a lot on this next slide, but at a high level, we feel pretty strongly that we've developed and implemented a best-in-class program, which is centered around our People Plan. The People Plan is something we look at and adjust and revise annually, and it's very closely aligned with our corporate strategic plan.
There are a lot of elements to human capital management for Ciena, but some of the highlights include fostering and improving inclusion and diversity, growing our employees through learning, training, and development, recognizing and rewarding our employees, and focusing on physical and emotional health and well-being of our employees, which, frankly, has never been more important than it is today. And we do this latter piece through a combination of leading compensation and benefit programs and a range of education, support, retirement readiness, and other initiatives. While we receive a number of rewards and awards as a result of these efforts, what's most important to us is that we're able to attract, retain, and develop top talent in a very competitive labor market. And we've received very positive feedback from our employees on various satisfaction surveys. Last slide.
Finally, with respect to environmental and social responsibility, on sustainability in particular, in short, we have all of the programs and track all of the metrics that one would expect a global multinational company in the high-tech space to do and to have. And that includes tracking our greenhouse gas emissions scores, conducting sustainability assessments of our key suppliers, maintaining a supplier diversity program, looking to reduce our carbon footprint, and consolidating our real estate footprint as well. But perhaps the most important driver of our sustainability program in recent years has been driven by our industry. Specifically, our service provider customers have been focused on reducing the number of physical elements in their networks and on decreasing the power consumption and space utilization of those elements. And in response, we've been successfully incorporating those elements in our product designs for years.
The result is that we have a purpose-built product portfolio that enables our customers to do more with less. As for social responsibility, we have extensive programs in place designed to foster community outreach, charitable giving, and other elements of social responsibility. These include locally led programs under the Ciena Cares brand, an online giving portal, flexible volunteer hours, and a disaster relief program. We're also currently in the midst of internal discussions about how we as a company can and intend to support overall efforts toward addressing both the spread and the longer-term impacts of COVID-19 in the locations and the communities that we serve and which we operate.
As a result of these efforts, I'm pleased to report that we recently received a platinum rating from EcoVadis, a third-party ratings platform that places Ciena in the top 1% of the many thousands of companies rated for our aggregate efforts on sustainability and social responsibility. With that, Gary and I would be happy to answer any questions posted at this time. And looking at the portal, I see there are two questions. The first question is actually for PwC, so I'll ask Scott Thorp to answer this question, which is, "Could you briefly explain the lead partner rotation process that takes place over five years?
Sure can, sure can. So due to the independence requirements of the SEC, an audit partner responsible for signing the audit opinion can only serve on that account for five years under public company accounting rules. So upon the completion of a five-year term of any individual partner within the firm, that audit firm will then identify a new partner to succeed that individual based upon their industry and any other experience that they have. And that partner cannot have served on that client within the five years prior to that in a similar capacity. And the company then has an opportunity to certainly consider that individual as part of the rotation each year as part of recommending the audit firm for reappointment.
Thank you, Scott.
Dave?
Sure. Second question has come in, which I'll take. Passive index investors are holding increasing amounts of company shares. Vanguard and BlackRock both hold a combined almost 19% of Ciena outstanding shares. Vanguard also manages roughly a third of the assets of the company's 401(k) plan. What is your view of these growing ownership stakes and the potential conflicts of interest when one or more of these investment firms also manage company retirement assets? So in essence, we see the two as completely de-linked. In particular, the company's 401(k) retirement plan in the U.S. is managed by a committee of independent fiduciaries who seek advice from a set of independent advisors and outside firms.
All the funds that are looked at and are selected and offered for the retirement investment options are regularly reviewed by all those fiduciaries as well as the advisors and firms for their appropriateness, performance, and cost, which is entirely independent of the holdings of any institutional investor within the company. The two are completely de-linked, and as a result, we do not believe there's any conflict of interest in that regard. Since there are no more questions, we will now 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 the count with respect to the election of Ciena's Class II director nominees, namely that Judith M. O'Brien, Joanne B. Olsen, and Gary B. Smith each received the majority of the votes cast in accordance with Ciena's bylaws. With respect to the election of Class I director nominee, Devinder Kumar has also received the majority of the votes cast. With respect to the approval of the amendment to the 2017 Omnibus Incentive Plan, the count indicates that the proposal has been approved by a majority of the shares present and entitled to vote. With respect to the ratification of the appointment of PricewaterhouseCoopers, the count indicates the proposal has also been approved by a majority of the shares present and entitled to vote.
Finally, I'm pleased to report that with respect to the advisory Say-on-Pay vote, the count indicates that a majority of the shares present and entitled to vote approved the executive officer compensation described in this year's proxy materials. And that is all.
Thank you, Mr. Raitt. Based on those votes, I declare that the three nominees have been duly elected as Class II directors and that the one nominee has been duly elected as a Class I director. I declare that the amendment to our 2017 Omnibus Incentive 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 your 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 2020 annual meeting of stockholders of Ciena Corporation is now adjourned.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.