Nortel Networks finally came out with its fourth-quarter results this morning. At first blush, they look mixed. Sales were US$2.62-billion - compared with analysts' estimates of US$2.8-billion and the company's internal goal of US$2.8-billion to US$2.9-billion (based on a regulatory filing made in December). On a positive note, Nortel made a profit of three cents a share, compared with estimates of 2 cents, while gross margins were slightly higher than expected at 45%.
Before anyone gets too excited about the EPS number, net income included US$181-million in income from discontinued operations and customer financing recovery and settlements. This was offset by an US$81 million restructuring charge.
Among the interesting tidbits to come out of the 10-K were CEO Bill Owens' compensation package. It includes a base salary of US$1-million a year with the opportunity to make a bonus of 170%. He was also slated to get a special pension worth about US$33,540 a month for the five years following his retirement. If that wasn't enough of a carrot, Nortel approved an "additional special pension benefit" in March of US$4.5-million to compensate Owens for equity compensation he forfeited when he resigned from the boards of other other companies after he was hired as Nortel's president and CEO last April. As a result, Owens will receive US$119,787 a month over five years when he retires.
Nice work if you can get it.
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Mark Evansthe blog - examines the world of telecom and technology from a distinctly Canadian perspective.the person - lives in Toronto, CA with his wife and three children, and works as director of community with PlanetEye Inc. 
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Comments
Re: Nortel's Q4 Results
by
Anonymous
on Mon 02 May 2005 09:55 AM EDT | Permanent Link
Compared to his predecessors, Owens got an average deal.
-Randy Re: Re: Nortel's Q4 Results
by
cristi
on Wed 26 Mar 2008 06:12 PM EDT | Profile | Permanent Link
Compared to his predecessors, yes, an average deal. Compared to everyone else, he's a god! Sometimes I wonder if I chose the right college but now I know that computer science and a lot of hard work can get me places!
--- california drug treatment center Re: Re: Nortel's Q4 Results
by
Cristian
on Mon 08 Sep 2008 05:23 PM EDT | Profile | Permanent Link
That is why because he has lots of cheap laser toner. He can afford to print as many flyers as he desire and not all of those are that "informative".
Re: Re: Re: Nortel's Q4 Results
by
bijikpalir
on Wed 21 Jan 2009 06:02 AM EST | Profile | Permanent Link
Their employees had chance to buy a baby toys for theirs children and playing a electric guitars while wearing an adult diapers.
Re: Nortel's Q4 Results
by
Ronald
on Tue 03 May 2005 01:21 AM EDT | Profile | Permanent Link
Agree w/ Randy and wrote some comparisons in my blog. But this is a good thread, because it stimulates more thinking. What, in your own view, is the most effective way to compensate a CEO?
Re: Re: Nortel's Q4 Results
by
Mark Evans
on Tue 03 May 2005 07:58 AM EDT | Profile | Permanent Link
i think owens got a sweet deal - relatively speaking - for someone who appears to be more of a stop-gap measure than an executive who can lead nortel out of the woods. You pay for what you get. Since leaving the U.S. military, Owens has wanted to be a CEO. It didn't work out at SAIC because the founder/CEO refused to step aside, which is why Owens left. When the Nortel CEO job came up, Owens probably jumped at the chance - even though it is not the most lucrative package. It was the perfect marriage: Nortel badly needed someone to take the job but couldn't offer a huge package because of its accounting woes, while Owens desperately wanted to be a CEO.
Re: Nortel's Q4 Results
by
Anonymous
on Thu 08 Feb 2007 11:01 AM EST | Permanent Link
Sherman, let's jump ahead to 2007:
Nortel Networks plans to slash 2,900 jobs Bloomberg News Article Last Updated: 02/08/2007 05:15:30 AM PST Nortel Networks Corp., North America's largest maker of phone gear, plans to cut about 8.5 percent of its work force after previous reductions failed to make the company profitable. The stock rose the most in more than a year. Nortel will eliminate 2,900 jobs and move about 1,000 to India, China and Mexico from higher-cost locations in the next two years. The reductions may lower expenses by as much as $400 million a year, the Toronto-based company said Wednesday in a statement. Nortel has now cut at least 7,250 jobs since September 2004. Chief Executive Officer Mike Zafirovski is aiming to revive Nortel after a $2.58 billion loss in 2005 and three financial restatements in as many years. Nortel said Tuesday that finance chief Peter Currie, rehired in 2005 to help the company recover from accounting errors, will leave in April. AT LEAST THE EXECUTIVES ARE GETTING GOOD RETIREMENT PACKAGES. After all, that's all that matters, right? Trackbacks
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