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Mike Z. Gets Zinged
By Mark Evans | June 5, 2008
Globe & Mail columnist Derek De Cloet takes a healthy run at Nortel CEO Mike Zafirovski, suggesting that despite all the work over the past 2+ years, Mike Z. is not doing enough because Nortel’s stock price has performed badly during his time at the corporate tiller.
The column is interesting because while Nortel has been slammed by critics for its accounting troubles and financial results, Mike Z. has pretty much stayed above the fray. This is partly because he looks like a star compared with his predecessors, Frank Dunn and Bill Owens. As well, many people acknowledge Mike Z. had a huge clean-up job to do after taking the helm in late-2005, and that the assignment continues as Nortel looks to reduce costs to remain competitive.
While shareholders may appreciate Mike Z.’s efforts, the reality is Nortel shares have dropped from about $4 to 81 cents when a 10:1 stock consolidation is taken into account. For many critics, that is the bottom line even though Nortel’s bottom line is improving.
In addition to a soft economy and fierce competition, Zafirovski blames the poor stock performance on skepticism among investors. Until Nortel really shows its on the right strategic path, don’t expect skepticism to disappear any time soon.
More: ITbusiness.ca has a look at how Nortel is getting its groove back.
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Topics: Executive Suite, Stock |