Light Reading
Nortel vice chairman John Roth got rewarded for walking away from the collapse

Nortel's Roth Rakes It In

Light Reading
News Analysis
Light Reading
3/13/2002
50%
50%

How good a CEO was Nortel Networks Corp.'s (NYSE/Toronto: NT) John Roth? So good that he is being paid more not to be at work than he was getting when he ran the company.

Just a few days before former Nortel CEO Roth announced his retirement back in May 2001, he received a $250,000 annual raise, according to documents Nortel filed with the Securities and Exchange Commission (SEC).

For the first four months of 2001, Roth’s base salary was $1,250,000 per year. This climbed to $1,500,000 a year on May 1, 2001. Roth officially retired as Nortel's president and CEO on November 1, 2001. Since then he has been on a yearlong leave of absence, during which he will continue to draw his entire salary.

In 2000, Roth earned $6.7 million in cash, including $1,104,167 in base salary, a bonus of $5.6 million, and miscellaneous pocket-change of $33,199 (see 2001 Top Ten: Fat Cats).

Roth, now Nortel's vice chairman, became Nortel's president and CEO in October 1997, and while he held that title Nortel shrank in size by about 28 percent and lost about 50 percent of its market capitalization.

When Roth took the top job, Nortel had a stock price of around $105 a share and employed more than 72,800 people. By the time he retired, Nortel was down to around 52,600 employees, and its stock price was less than $6 a share.

In the summer of 1997, Nortel's market capitalization was hovering around $32 billion. Now it is about half that.

Along with many other telecom chief executives in the late 90s, Roth's cheerleading about the Internet's exponential growth contributed to many of the unsustainable investments in the telecom market. Moreover, the vendor financing and overblown acquisitions that took place on his watch helped usher in a long and humiliating restructuring period at Nortel (see Nortel Buys: Reaping the Whirlwind? and Nortel: Can This Company Be Saved?). "He misread so many of the signals the market gave him in 2001," says Ariane Mahler, an analyst at Dresdner Kleinwort Wasserstein.

Frank Dunn, Roth's successor, began 2001 with a base salary of $475,000 a year (see Nortel Swings Axe, Switches CEOs). By November 1, he'd been bumped up to $825,000 a year to reflect his promotion, according to Nortel's SEC filings.

Nortel declined to discuss Roth's compensation. "I'm not going to dissect the numbers. They are what they are. They speak for themselves," says Nortel spokesman David Chamberlin.

— Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com

(40)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Page 1 / 4   >   >>
OptixCal
50%
50%
OptixCal,
User Rank: Light Beer
12/4/2012 | 10:48:07 PM
re: Nortel's Roth Rakes It In
Why should an announcement like Nortel's Roth getting this huge payout upset us? Aren't we all pretty much resigned to the fact that this sort of thing continually happens? On the surface, doesn't this smack a bit of "Enron-gate"? Big execs getting big payouts and leaving just before the fit hits the shan? come on! As an unfortunate investor in Nortel I can only hope the shedding of this "exec's-utive" weight will eventually help.
kcufde
50%
50%
kcufde,
User Rank: Light Beer
12/4/2012 | 10:48:05 PM
re: Nortel's Roth Rakes It In
roth made money, by acquiring companies which are non standards, and people who worked hard , walked out home, why did they paid him salary when he was at home , to make the stock to 5 dollar, if this continues, stock will come to 5 cents
Lopez
50%
50%
Lopez,
User Rank: Light Beer
12/4/2012 | 10:48:05 PM
re: Nortel's Roth Rakes It In
I guess at 15 or so engineers out of 50K were laid off so Roth could continue to collect his paycheck. What a wanker.
Star
50%
50%
Star,
User Rank: Light Beer
12/4/2012 | 10:48:05 PM
re: Nortel's Roth Rakes It In
Thats BS, This jabrone, Roth will continue to drive into the sunset with one of his millions and I said millions of cars he owns, laughing and lying all the way to the bank !
The old geyser is a prime example of all that's wrong with NT and their old school mentality.
I saw this old buck speak 2 years ago to a standing ovation by NT workers only to have them turn on him a year later and beat him down like a government mule.
Today it's clear he's just a Jackass and my NT stock is on a roll in my bathroom waiting to wipe my mudhole...........
optical_man
50%
50%
optical_man,
User Rank: Light Beer
12/4/2012 | 10:48:04 PM
re: Nortel's Roth Rakes It In
Ever see the Poseiden Adventure?
Remember the part where the small group of refugees sees the unending line of poor souls headed towards the bow, and the Preacher says "but the bow is under water, wake up Man, you're headed towards certain death!" and no one listens?
Someone in the refugee group said "we've got to do something to help them!", the Preacher says "forget it, they're aleady dead".

Does anyone who was there (at Norty) see the connection now that time has passed?
optical_man
50%
50%
optical_man,
User Rank: Light Beer
12/4/2012 | 10:48:04 PM
re: Nortel's Roth Rakes It In
Good for John.
He wanted that old fuddy duddy to make a right angle turn, but many of the employees at Norty were too entrenched in their mindsets to change with him.
He tried. He tried darned hard. If you've heard the speeches you know.
If you tried to make a difference and were frustrated, you cashed out your options, and left for somewhere else.
If you stayed and lost it all, and now want to complain, you missed your timing, you should have stood up at a company conference and said "my department is holding us back and I want to change it!".
You didn't did you...
Why? You wanted to become part of the country club set, and figured if you sat quietly long enough, a factor of number of years served would promote you.
Nortel has it's issues, but who doesn't. They are an incumbent and will press on eventually.
Good for John, now quit complaining.
lucidity
50%
50%
lucidity,
User Rank: Light Beer
12/4/2012 | 10:48:04 PM
re: Nortel's Roth Rakes It In
OptixCal -
I must respectfully disagree with you. The "we've all been screwed/will be screwed again by the fat cats" attitude doesn't serve anyone except said fat cats. The management of any corporation must be held accountable for their poor decisions and the effect those decisions have on their employees and investors. Sitting back and sighing "not again" only encourages those who (ab)use the system for their own financial gain to continue their behavior unabashed.
mrcasual
50%
50%
mrcasual,
User Rank: Light Beer
12/4/2012 | 10:48:03 PM
re: Nortel's Roth Rakes It In
Good for John.
He wanted that old fuddy duddy to make a right angle turn, but many of the
employees at Norty were too entrenched in their mindsets to change with him.
He tried. He tried darned hard. If you've heard the speeches you know.
If you tried to make a difference and were frustrated, you cashed out your options,
and left for somewhere else.


I did exactly what you suggested. Worked for me. I don't have any beefs with JR getting all his cash and options when Nortel was going up. He gets paid for peformance, and until the crash Nortel was performing exceptionally based on the only metric that matters at the CEO level, i.e. stock price.

However, I do have a beef with JR getting a 20% raise after presiding over a year that even the most generous of souls would call a disaster. Let's be serious, if any of us had had a similar year, evaluated against our performance metric, we probably would have been fired, not given a 20% raise.
Star
50%
50%
Star,
User Rank: Light Beer
12/4/2012 | 10:48:03 PM
re: Nortel's Roth Rakes It In
Hey Jackass, don't talk about preechers to me...
I went to mine and asked him to forgive me for buying NT stock. I also asked him to prepare last rights for NT.
As far as boats go, that boat at NT has sailed.
Star
50%
50%
Star,
User Rank: Light Beer
12/4/2012 | 10:48:03 PM
re: Nortel's Roth Rakes It In
My only mistake was listening to my fearless leader, "Uncle Buck" better known as JR and drinking the NT Kool-Aid.....

As for your comments, "pull your lips away from JR's ASS and just shut the hell up !"
Page 1 / 4   >   >>
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
Interview With Rick Talbot, Principal Analyst, Current Analysis

10|31|14   |   2:12   |   (0) comments


At the NFV Open Cloud Forum 2014, Rick Talbot shared his positive feedback about the holistic and open approach that Huawei adopts for SDN and NFV. He also found the open sharing at the event valuable as it features different perspectives from Huawei experts, telecom operators, industry analysts as well as security experts.
LRTV Huawei Video Resource Center
Interview With David Snow, Principal Analyst, Current Analysis

10|31|14   |   2:24   |   (0) comments


David Snow talked about his understanding of Huawei and its SoftCOM strategy at the NFV Open Cloud Forum 2014, saying that Huawei's wide approach combining IT and CT expertise, introducing big data and analytics into solutions and contributing to the OpenStack community particularly resonate with him and make the company stand out in the industry.
LRTV Huawei Video Resource Center
Interview With Roz Roseboro, Senior Analyst, Heavy Reading

10|31|14   |   3:13   |   (0) comments


Roz Roseboro commented on Huawei's data center capabilities and NFV solutions at the NFV Open Cloud Forum 2014, saying that in addition to covering all three key domains of compute, storage and networking, the company also emphasizes the importance of management capabilities and professional services, which are essential in making NFV a reality.
LRTV Huawei Video Resource Center
Interview With Michael Howard, Co-founder & Principal Analyst, Infonetics Research

10|31|14   |   5:25   |   (0) comments


Michael Howard talked about SDN, NFV, and OpenStack adoption at Huawei's NFV Open Cloud Forum 2014. Particularly, he pointed out that Virtual Enterprise CPE is the top NFV use case that operators plan to invest in over 2014 and 2015 to deliver new enterprise services through virtualized functions.
LRTV Huawei Video Resource Center
Interview With Jerry Caron, Senior Vice President, Current Analysis

10|31|14   |   3:11   |   (0) comments


At Huawei's NFV Open Cloud Forum 2014, Jerry Caron from Current Analysis said that orchestration and management are key to realizing SDN and NFV for global carriers, and the approach that Huawei is taking, with its FusionSphere Cloud OS at the core, is in the right direction to address the challenges.
LRTV Documentaries
Broadband Battles

10|31|14   |   01:39   |   (0) comments


This year's Broadband World Forum featured a number of show floor battles focused on access gear, components and coffee.
Jonestown
Mobile Backhaul: Going to the Dark Side?

10|30|14   |   2:26   |   (1) comment


Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
Upcoming Live Events
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Like Us on Facebook
Twitter Feed