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Employment

Nortel Wants Its Bonuses Back

Nortel Networks Ltd. (NYSE/Toronto: NT) reacted to media coverage of its accounting problems today with a statement vowing to seek recovery of any bonuses paid in bad faith.

The statement says: "Following the completion of the independent review, the Board of Directors will review the payments under our bonus plans to determine what actions are appropriate. To the extent the Board determines bonuses have been paid to individuals who have acted improperly, it fully intends to seek recovery. Due to the ongoing nature of the independent review and the regulatory and criminal investigations, it would be inappropriate to comment further."

The company paid out millions of dollars in bonuses following its return to profitability in 2003, but has declined to comment on the issue until now (see Nortel Silent on Baffling Bonuses).

But now its accounts are under investigation, a number of senior executives have been sacked, and there are severe doubts as to whether the company had made it out of the red while the bonuses, which were linked to profitability, were being paid. (See Canadian Regulator Probes Nortel, SEC Pops In on Nortel, Nortel Rattles Nerves, Nortel CFO Out , and Nortel Fires CEO.)

Now Nortel has issued a statement in reponse to a Wall Street Journal article about the equipment firm's finances. The statement says little else, as the internal and external investigations are still under way and the company is due to start providing financial updates related to its restatements later this month (see Nortel Sells Plants, Supplies Update).

Nortel says only that it "will continue to cooperate fully" with the various financial and government authorities" in connection with their investigations and reviews."

— Ray Le Maistre, International Editor, Boardwatch

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OptixCal 12/5/2012 | 1:28:56 AM
re: Nortel Wants Its Bonuses Back Have the chickens come home to roost...? It's about time, don't you think? Take back the bogus bonus payments and use it to hire some good people.
nigel2k2003 12/5/2012 | 1:28:52 AM
re: Nortel Wants Its Bonuses Back Two bad for the good old boy network at Nortel.
Looks like they'll have to belly up and give back those good old boy bonus's
" Greed s*cks, then you pay "
PO 12/5/2012 | 1:28:38 AM
re: Nortel Wants Its Bonuses Back Nortel must reclaim not only the bonus from those who acted improperly, but also from all who received monies to which they were not properly entitled. It's not their money, it belongs to the shareholders. And sometimes life deals out some tough cards. And by no means should it be sweetened by a 'bonus' bonus.

There are plenty of folks who are unemployed because of corporate shenanigans, and plenty of investors who have lost their savings. They don't deserve to be punished further as they hear of fully salaried employees benefiting from illegal activities.
networking_legend 12/5/2012 | 1:28:37 AM
re: Nortel Wants Its Bonuses Back There are plenty of folks who are unemployed because of corporate shenanigans, and plenty of investors who have lost their savings. They don't deserve to be punished further as they hear of fully salaried employees benefiting from illegal activities.

Why so hard on the former execs? They were smart enough to see an oppurtunity to swindle some cash from the naive shareholders, so more power to them.

In the business world, its every man for himself. Anyone who tells you differently is either lying or hasn't made any money.
whyiswhy 12/5/2012 | 1:28:36 AM
re: Nortel Wants Its Bonuses Back So here is the fundamental injustice of our society laid bare for all to see: a three time poor ass bastard from the wrong side of town gets life without possibility of parole for posession of a $20 rock of crack cocaine. The cops beat his head with metal flashlights on the side of an LA freeway, and he gets handcuffed to a jail bed at LA county.

Executives and their partners politicians who steal literally Billions and put hundreds of thousands of jobless on the street get sued for their actions. That's if we get very very lucky and they get very very unlucky.

I have a dream that someday a county mounty will bust down the door of their mansion, and roust it up "ghetto style". That means they tear up everything in sight, bust holes in every wall, rip up the carpets and mattresses, "looking for exidence". Go over the Mercedes in the garage too: cut up the seats and punch holes into the "hidden" areas.

Sovereign immunity means the taxpayers don't have to pay for the damage, even if nothing is found.

But the real truth is these guys are guilty of no crime. They have to be sued by the board. There really really ought to be a law.

But there isn't one. And that's the problem.

-Why
SIVROCX 12/5/2012 | 1:28:34 AM
re: Nortel Wants Its Bonuses Back There is a law whyiswhy, it is called anarchy. I suggest you move to a 3rd world country and experience it first hand. Then maybe the court system will look better to you.
Cheers +£
whyiswhy 12/5/2012 | 1:28:32 AM
re: Nortel Wants Its Bonuses Back Sivrock:

A little real life story for ya':

A neighbor-homeowner who worked at HP Santa Clara was transferred to Santa Rosa; decided to keep his house and rent it out. Rented it to three apparently clean cut San Jose State engineering students with good references.

Turns out they were partly financing their education pushing dope. Cocaine and marijuana mostly.

Little did they know the next door neighbor on the other side of the fence was a cop. A detective seargent no less. Had them cold almost day one.

Long story short: we (neighbors) told the homeowner to get them out. He (homeowner) could do nothing quickly, thanks to lease, laws restricting his rights to evict, notice, etc.

So one morning around 4AM, the SJ SWAT team raided the house. And instead of just searching it, they tore it apart. I mean they ripped carpets out, punched a hole in every (yes, quite literally every one) wall, multiple places in the ceilings of every room (might be hiding junk in the attic insulation)...a huge mess. Tore out the toilets even. A pile of junk on the front lawn.

They found all of three baggies full of marijuana and about six ounces of cocaine. Oh, and several kegs of beer, and a lot of porno magazines. Wow.

The poor homeowner had to repair it on his own dime. His insurance refused to cover it: illegal activity. City had sovereign immunity: acting on a valid search warrant. The poor bastard ended up selling house for a net loss after repair costs.

By the way, this was/is a middle class neighborhood. The homeowner was/is an engineer at HP. About as "flag and apple pie" as it gets in Silicon Valley.

Oh the kids: they got busted for distribution. They all rolled on the next higher in the distribution chain and copped pleas. Education and any hope for engineering career over of course.

So that's somehow better justice than a third world country?

Now compare that treatment to Ken Lay, Jeff Skilling, Jack Grubbman, etc etc who are flat ass mega-crooked. Also compare that to Carly, Scott and Larry etc etc slightly smarter mega crooks who influence politicians to make it legal to outsource and offshore jobs.

Hell, not just legal, how about they get a tax break on top of not having to pay taxes? That's the latest one by the way.

And watching over this wonderful scene is a re-born alcoholic party boy and a bunch of behind the scenes mega-crooks, stuffing their pockets as fast as they can. Listening to Condie Rice sing gospel songs as they plot to steal the old ladies social security funds. Gotta move fast: Ken Lay left some of grannies money on the table before he got caught! It's like having a bunch of Catholic priests for Boy Scout leaders, or Clinton in charge of the female Whitehouse pages.

So that's somehow better justice than a third world country?

-Why
Ben Dover 12/5/2012 | 1:28:30 AM
re: Nortel Wants Its Bonuses Back Amazing how this conversation starts with pointing at the obvious Nortel criminals and ends with engineering student drug dealers...am I missing something??? It's obvious that Nortel should start paying for their crimes and John (nows a good time to sell) Roth should be first to go. Follow that up with Dunn (or Done) and the All-Stars. This company better start becoming a little more righteous or there will never be a tech boom in Kanata again!!!!
flam 12/5/2012 | 1:28:30 AM
re: Nortel Wants Its Bonuses Back The "war on drugs" was a distraction to make sure folks didn't ask hard questions on the economy then.

The "war on terror" is the current version.
whyiswhy 12/5/2012 | 1:28:28 AM
re: Nortel Wants Its Bonuses Back I think the fact that after all this time and the disclosure of their shenanigans that the entire board has not been arrested and thrown in jail on charges of grans theft and embezzlement says mounds about Canadian justice: it's worse than third world.

BTW, I am not saying we do any better in the US.

Hey, look, there goes a terrorist. Nope. Just looked like one. Crack dealer, crack dealer! Prostitute, hey look there's a prostitute! Teenage abortion, car wrecks, traffic and weather; all at 6:00!

Oh, hey, while we are at it let's do a TV show and call it: Swan! We can literally hack up some womens bodies and put them through torture for Fifth Avenue advertising dollars.

-Why

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