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Russo Takes Place of Holder

Light Reading
News Analysis
Light Reading
4/24/2003

Patricia Russo has taken yet another top executive post at Lucent Technologies Inc. (NYSE: LU). In addition to CEO and chairman of the board, she is set to become COO, replacing Robert C. Holder, who will leave that post this summer.

"I decided that it was the right time to consolidate our top management structure and for me to manage operations more directly," Russo said in a prepared statement released today. A key motivator for the move, she indicated, was the resolution of Lucent's SEC investigation and shareholder lawsuits (see Lucent to Settle With SEC and Lucent Pays Big to Settle Claims). With those past, it seems there's less need for extra help at the top.

It's the second time Russo's moved to take over a post vacated by a top exec. This past February, a little over a year after taking over as CEO in January 2002, Russo announced she would also become chairman of the board as Henry Schacht stepped down (see Russo Rules at Lucent).

Analysts see it as a positive move. "If anything, it saves money," says Cobb Sadler of Deutsche Bank AG.

It may indeed. Robert Holder was among the executives given special retention awards to stay on through the company's restructuring after the dismissal of CEO Rich McGinn in October 2000. He was in fact awarded the highest such incentive -- $4.5 million (see Lucent Execs Get Richer and Execs Bag More Lucent Loot ).

That Russo's taking on yet another job may also help quell tongues wagging about her compensation. While Lucent has maintained that Russo's initial base salary of $1.2 million and one-time sign-up bonus of $1.8 million were in line with industry norms, some believed they topped the scale (see Post-Bubble Arrogance and Lucent Fat Cats Gorge in 2002). Clearly, though, she's working hard.

There may be other good reasons for Lucent investors to applaud the move. "It's a lot of hats to be wearing, but at a time like this, Lucent needs to be managed closely," says Steve Kamman of CIBC World Markets. When a company's struggling with the issues that Lucent is, decision-making's consolidated anyway, he says.

But the consolidation, Kamman warns, "doesn't do anything to change the fundamentals." Lucent's still struggling with its balance sheet and its strategy, despite the progress it's shown (see Lucent Grows Slightly, Loses Less). It's not clear how the new emphasis on services will play out, or how the product line will evolve to support that, he says.

Russo isn't the only exec who's wearing more hats than one these days. Frank Dunn continues to be both CEO and COO at Nortel Networks Corp. (NYSE/Toronto: NT), which hasn't had a full time COO since 2001 (see Nortel's Empty Room at the Top). Like Lucent, that company is holding its own (see Surprise! Nortel Earns a Profit). But the future's uncertain, no matter who's in charge.

— Mary Jander, Senior Editor, Light Reading

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rafaelg
rafaelg
12/5/2012 | 12:10:31 AM
re: Russo Takes Place of Holder
I am laughing hysterically....

"Analysts see it as a positive move. "If anything, it saves money," says Cobb Sadler of Deutsche Bank AG."

Yeah, wait until next performance eval. Let's see how much of a raise she gets and how many are laid-off...Just like Nortel...



let-there-be-light
let-there-be-light
12/5/2012 | 12:10:27 AM
re: Russo Takes Place of Holder
Isn't this a lot like watching an old, overweight star implode into a black hole...
WiserNow
WiserNow
12/5/2012 | 12:10:20 AM
re: Russo Takes Place of Holder
Pat probably is saving the company money. Holder probably expected another few million as an incentive to stick around. But since the company is about 100,000 people smaller than it was, who needs him? Does anyone know what he did anyway?

Now the question is whether Pat Russo can actually run operations. She will have to set goals and call priorities for Bell Labs, Wireless and Wireline, while at the same time figuring out how to reduce costs in the service and manufacturing operations. And don't forget the CEO function. She'll be a busy lady.

I bet she picks a favorite and elevates him/her to the COO position within the next year. Any takers?
BobbyMax
BobbyMax
12/5/2012 | 12:10:17 AM
re: Russo Takes Place of Holder
One of the main problems in the US and almost all of its institutions is that it is not merit based. Unless the US mends its ways and institutes/encourages merit based appointments, the kind of corruption we see at Lucent, Nortel and many other countless US companies would stay with us all the time.

It will be very hard for Mrs. Russo to manage Lucent because of lack of technical skills. No one seems to know what is happening within Lucent.
The revenue is still not very good. Lucent seems to have lost every that once it had,
optical_leaders
optical_leaders
12/5/2012 | 12:10:16 AM
re: Russo Takes Place of Holder
"The revenue is still not very good."

The revenue is barely good anywhere in the Telecomms industry.

But improvement is a better measure of how the Lucent's/Nortel's etc are doing.

Lucent: 16% increase in revenue this 1/4 - I would say that is pretty good.....
beetlejuice
beetlejuice
12/5/2012 | 12:10:14 AM
re: Russo Takes Place of Holder
Janitorial Engineering Director of the executive wash rooms.
gea
gea
12/5/2012 | 12:10:14 AM
re: Russo Takes Place of Holder
Booby:

All your base are belong to us.
yomamma
yomamma
12/5/2012 | 12:10:01 AM
re: Russo Takes Place of Holder

http://www.rageear.com
go_to_the_light
go_to_the_light
12/5/2012 | 12:09:53 AM
re: Russo Takes Place of Holder

WOAH!
porn starr
porn starr
12/5/2012 | 12:09:13 AM
re: Russo Takes Place of Holder
I'm glad you still have your job there, but 16% growth is sales only, it doesn't include the investor washouts from new stock issuances.
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