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    A CEO Who Shares the Pain

    By Mark Evans | December 2, 2008

    When Nortel announced in September plans to slash costs and eliminate 1,300 employees, I wondered why CEO Mike Zafirovski hasn’t made a symbolic gesture by taking a salary cut or declaring he wasn’t going to take a bonus. In the scheme of things, it wouldn’t make much of a financial difference but it’s a solid message to send to employees.

    In Japan, Japan Airlines CEO Toshiyuki Shinmachi took pay cuts over three consecutive years to the point where he earned less in 2007 than many of his pilots. Many North American CEOs could learn a lot by watching this video:


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    Topics: Executive Suite |

    Viewing 41 Comments

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      The plaintive wail of a currency-free global village emerging from this one last, final secular bear brought about by oil-driven capitalism is a load of, well, bull.

      If the working masses were indeed smart they'd finally develop their own metrics to grade their bosses' performance and the license to adjust their salaries accordingly. Establish a meritocracy. Wouldn't it be fun to pay Mike Z solely in NT stock these days?

      But no, the oppressed proles actually pay to join unions replete with bosses, eagerly vote for the vague possiblity of mere "change", which, hello, isn't synonymous with "improvement", and buy bumper stickers to advertise how much they care and how smart they are.
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      Z is not even worth paying 1 nortel share at 51 cents. he creamed the business in 3 years, something no Nortel CEO has done in over a 100 years.

      sounds awful does it not. we can play the same marketing game he does.
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      Z pays himself first. Then his dream team. Anything left VP and Directors. The rest of you get in line if any crumbs are left.

      The board gets paid. Harry Pearce gets $500000+ for 16 board meetings a year.

      Don't you people get it. It is Business Made Simple. What are you people whining about? Why do you deserve more? Take the quiz:
      1. Are you part of the old boys club?
      2. Did you attend the same sleazy school these people went to?
      3. Do you sell yourself more than what you do?
      4. Do you take credit for others?
      5. Can you spin and downplay negative news?
      6. Can you reward your friends even they are incompetent?
      7. Do you have to support a high maintenance family?

      If you answered No to any of these questions, then you deserve your puny salary.
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      Points 1-7 apply directly to most of current (not all) NT managment.
      At least the ones who have been there 10 years or more.
      But I would not call six figure salaries puny in their cases.
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      6 figure salary they get is puny when compared to what the top dogs get. Its pocket change. Compare a line manager at 120000 to 500000 for a board chairman attending 16 meetings likely 1 hour each, of which at least half must be going thumbing his little corporate Blackberry.

      On question 8 below NT low price is what NT is worth. It has nothing to do with AAN, propaganda, haters etc. Going by the same thought, if we were all to do a song and dance on NT, do you think it will go back to $30. Come on. NT is worth 0 and many analysts have said so.

      What can you say about a company that generates over 10 billion but not a single cent in profit going to the bank?? And people think AAN is responsible?

      Only management and the board are responsible. You cannot blame this on economy, shareholders, media, NT employees, customers. If you did, there is no need for management or a board.
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      Couldn't have said it any better myself. Though, maybe:

      8. Do you blame NT's low stock price on media bias, propaganda and haters/AAN?
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      Not to sound like another one of the disgruntled ex-employees (Many of them) but I for some reason am still sticking it out inside Nortel. Not because I think the company will be around in a few years but just cause I like what I do.

      However, one thing that P#&$&#ES me off is the executives. They say they LISTEN to customers, THEY DON"T!. They say they listen to employees, THEY DON"T. They say they listen to the way the market is moving, THEY DON"T.

      Not to go into specifics but it just shocks me how greedy these guys are. They make really stupid decisions, then they think they should be rewarded for it.

      If it was up to me, everyone at a executive level should be paid 75% stock and 25% salary. If they F*#*DK up, then they lose money. Simple math..... The guys in the treaches listening to the customer complain about product quality and support can't do anything about it but complain, complain, but noone listens.

      Anyhow, I'm done with my two cents :)
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      you and all who you can find should offer publicly to put your entire salary on the line and work for $1. only then will management Director and above get the hint and take a pay cut. until they are humiliated, they will only fill their pockets, thick headed and thick skinned as they are.
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      I agree wholeheartedly with you. It is astounding the level of incompetence we are witnessing this very moment. The executives and GEniuses like to talk fancy and in big terms, but when it comes to down to actual deliverables, they unfortunately fail miserably. They walk about wanting to "incubate" innovation but all they've done is to destroy it.

      As for their pay levels... there's not really a great solution. If they were paid 75% stock and 25% cash, there would be a great incentive for them to cook the books again, ala the criminal Frank Dunn and then Nortel would be in even worse shape, perhaps already defunct. However I agree that their continued astronomical salaries in contrast to the sacrifices other employees must make is a travesty.
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      Actually, that was more like two dollars, Candadian of course :)...--bb
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      Nortel is the old boys club through and through.
      From the useless Board of Directors, to incompetent executives, down to useless-incompetent managers (they get two lumps).
      The place will never change.
      It will die while the leeches hang on and the egotistical managerial losers reward the suck up employees who act like their disciples.
      Doesn't matter how good who you are.
      Matters how brown your nose is.
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      It'll never happen at Nortel....NEVER!
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      I blogged on John Roese's "final blog" that if he cared, he should of stayed on at Nortel and run a division for free, or for a symbolic salary.. He ERASED my blog ..

      they are ALL THE SAME - GREED IS ALIVE AND WELL IN AMERICA!
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      John Roese erased my blog post on his farewell posting proving, once again, that ZAFIROVSKI HIRED NOTHING BUT A BUNCH OF COWARDS!!!!!

      John Roese - the pen will always be a weapon against cowards like you….--bb
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      My comment was quoted in the G&M so he couldn't delete it without revealing his cowardice. :-)
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      When you hire a free agent CEO that is what you get. The motivation is money then challenge. When you promote from within the motivation tends to be challenge then money. That may be a gross over simplification but it seems to pan out more often than not.
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      Definitely a role model, unfortunately Nortel execs have no shame and having them watch this would make no difference. They will continue to fleece the company until its dying day, while the BoD stands by and watches. (Or helps out!)

      BTW A Correction: Japan Airlines' CEO's name is actually "Haruka Nishimatsu", not sure where you got "Toshiyuki Shinmachi" from.
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      Ask any lawyer in Toronto, everyone knows Nortel's pay practices are outright exorbitant.

      Nortel loses money for a decade and this green CEO makes more the BCE's

      They still have board members sitting on the voting audit committee to approve rewarding financial innovation and lottery sized exorbitant pay practices as they cut staff and lose money....trying to sell assets or borrow their way out of an increasingly dire situation...

      They can't dilute 100M shares a year into a bloated value under the oxymoron of "to keep good people"

      Instead of taking a pay cut, they want 20% more
      They cut staff instead
      promotes than fires pals
      as the company stock trades at a fraction from when he was hired and at a fraction of when last neared folding

      They also paid a premium to pay his past employer for violating a contract he signed on several occasions let alone acquisitions or lost leader deals for revenue sake.

      Do they even care about the company short of their carrot?
      spend spend spend... and cut cut cut doesn't seem to balance
      ____________________________________________

      Ford says CEO will work for $1 to get loans

      TOM KRISHER and KIMBERLY JOHNSON
      Tuesday, December 02, 2008
      DEARBORN, Mich. — Ford Motor Co. will tell Congress that it plans to return to a pretax profit or break even in 2011 when its CEO appears before two legislative committees this week.

      Also, CEO Alan Mulally said he'll work for $1 (U.S.) per year if the automaker has to take any government loan money.

      The plans Ford submitted to Congress on Tuesday also say the company will cancel all management employees' 2009 bonuses and will not pay any merit increases for its North American salaried employees next year.

      The company also said it will sell its five corporate aircraft. The CEOs of all three Detroit automakers were harshly criticized during congressional hearings last month for flying to Washington in separate corporate jets while seeking loan money.

      ________________________________________

      will Nortel sell its new jet it justifying buying because it is more green...

      instead it sells assets in an Oil town that came out of ghost town as oil trades declines again trading at 46.96 right now and at 2004 levels. As good as timing as selling MENs...

      Never mind the owners / shareholders decline to as good as zero, management sees big bucks, like the head of OSC Wilson, with NT's ex Liberal finance minister on the board, following one of the highest ranking US military officials, in their hard to fill roles, who dares question them.
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      “A good leader looks back once in a while to make sure they are still following” -- my father.

      HRCE is spot on! One look at their idol (Jack Welch) should tell you the score. This is the same person that had the audacity to include his dry-cleaning bill as part of his retirement package. And we call these guys ‘Leaders’. Is it any wonder why our entire capitalist foundation is shaken from its roots?

      When ‘leaders’ lose touch with their constituencies is when they stop being leaders. At Nortel that happened a while back. It’s all about the money. These guys couldn’t lead flies to shit…--bb
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      Well said. But what can an employee do? N-O-T-H-I-N-G!!!
      All we can do is watch and wait until our number comes up.
      Any other suggestions?
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      Be the pro that you are and keep on plugging...--bb
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      "These guys couldn’t lead flies to shit…--bb"

      Finally, an eloquent summary of the root problem at Nortel that everyone can understand. Well done.
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      Thank you; just stating the obvious...--bb
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      Yes ! The entire capitalist foundation shaking from its roots..i love it i love it i love it. Its time the system fell apart and it is due to nothing other than pure greed. Good riddance to the system and to the companies that operate with the greed ethic.
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      Agreed! Nothing wrong with capitalism but geedism is evil..--bb
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      Lets recap:

      Nortel was a century-old institution founded on the basic tenets of modern socialism - fairness, equality and opportunity for all, for free - steeped in ancient culture and therefore ever supportive of the ideas of evolution and progressive science... but rather predictably brought to the edge of financial ruin within 3 years by a capitalist American.

      To the average American who judges the "worth" of a human life solely by their bank accounts Nortel looks like dead meat, but it has in fact moved forward, well into Aquarius, by reaching out to the re-emerging global village of yore which values love, caring, cultural and intellectual exchange far above and beyond empty monetary gain and earthly possessions.

      Imagine there's no heaven, no hell. Imagine all the people living for today. Imagine there's no countries, nothing to kill or die for.
      And no religion too. Imagine no possessions, no need for greed or hunger. A brotherhood of man. Imagine all the people sharing all the world.
      I imgaine I see the the global paradise that surrounds lower North America.

      Said former US messiah Jimmy Carter: "In many countries around the world — my wife and I have visited about 125 countries — you hear John Lennon's song 'Imagine' used almost equally with national anthems."

      Millionaire songwriter John Lennon cautioned: "The Buddhist says, 'Get rid of the possessions of the mind.' Close enough. For example, Nortel's friends and partners, the Chinese, don't hate Tibetian Bhuddist the Dalai Lama. They merely disapprove of his persistant materialism. Its all a mere misunderstanding to the uncultured roundeye languishing in his Wild West past.

      I imagine the secular bear will move Nortel will go private, keep everyone on the payroll at *equal* wage and with *full* benefits, unless they choose to seek employ elsewhere. I imagine nobody would.
      Nortel will forthwith only barter goods and services with like-minded villagers, forevermore unsullied by the ruinous temptation of evil Mammom.

      Mike Z, too, will someday unload the possessions of his mind. In a green Z-mail, I imagine. Maybe even pen a song on recycled stock made from discarded dollar bills - "greenbacks". How poetic. Greenback, back to green.

      I imagine the Children of Nortel will one day engineer an airplane or spacecraft without (the grossly misinterpreted western version of an Indian) caste-like first-class section, but in which every passenger has a window seat next to the pilot, who, like his assengers, flies for free because he wants to sit among the noble masses and learn about each and every one.

      Keep on imagining,

      Jim Jones, jr
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      Despite what you think, you are not enlightened, clever, or elevated above anyone else. Please, however, continue your childish rants. And make them as transparently anti-USA as possible - I don't think you're trying hard enough.
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      Imagine that.
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      Hooray. The Revolution is here. Again. For the umpeenth time. Capitalism is on the way out. For the umpeenth time. The noble masses have converged to chant "Viva la revolucion" For the umpteenth time. Their collective IQ drops to the low double digits - to save, uh, energy, I guess.

      "tune in, turn on, drop out", "Kumbaya", "trust noone over 30" "dawning of the Age of Aquarius" rehashed anon, but scientifically proven this time around cuz "the proof is out there". It was on the grassy knoll at Dealey Plaza al along.

      You yourself said everything has ebb and flow. That means The Age of Aquarius could last as short as yer average secular bear. Why? because when everyone becomes "different" they all become the same again. Plain old humas, and mankind has an abysmal track record regarding "change". Nothing we make lasts, nothing really changes.

      But by all means, as with everything else, just pick the Expert that best suits you:

      http://en.wikipedia.org/wiki/Age_of_Aquarius
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      Makes sense, though it's sad to say. The current Nortel exec likes to think of themselves as spiritually descended from Welch, the man who appears in all of their wet dreams. With these grand delusions they have continued the company's slide into oblivion.

      They believe themselves to be great leaders, yet what have they led? The fact that Nortel has survived so long under them is not a testament to their leadership, but rather a testament to the determined workforce that has managed to cope with the astounding lack of leadership!
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      Btw... it's not just a lack of leadership that the Nortel employee base suffers with, in many cases it's incompetent active leadership. That is usually far worse.
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      You're right. If they didn't do anything, things would probably be better. Problem is, they DO do stuff. It just ends being the wrong stuff.
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      As I have stated many a'times before, Nortel's workforece are the real World-Classers...--bb
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      Mike Z and his executive team are going to keep cashing large pay checks up until the moment Nortel declares bankruptcy. They are even selling their restricted stock as soon as they are able to. Some of these GEniuses have even sold the stock for under $!, a clear sign that they believe that Nortel's equity is basically worthless.

      The BOD is helpless - they brought in Mike Z and they know that no one else would take this job now. SO Mike and friends will continue to cash large pay checks and lay off hapless employees.
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      You're basically correct that the BOD could never find somebody else to take Mike Z's place, although I woud like to add a little more detail:

      1. No credible candidate from outside Nortel would be willing to risk his career by stepping into such a train wreck of a company.

      2. The option of promoting internally from the 2nd executive tier, as Nortel has done in the past, has little value since this tier is occupied by Mike Z's lackeys, e.g. Joel Hackney.
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      I don't know about you but if I was a happily retired Cisco exec,I wouldn't be the slightest bit interested reading a blog that talks about a competitor's issues among other bloggers.

      Come to think about it the "GEniuses" referral to Nortel's execs seems to be quite popular around here.
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      Have you ever protested the use of the term "Bushitler"? Is it not somewhat disconcerting that the abovementioned word's most ardent users have just successfully elected their favorite president into office, dubbed the Messiah of the New Age?
      • ^
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      There you go again with rampant personal attacks adding no value to the discussion but instead trying just to incite hate. Have you already run out of ways to pump your NT stock?
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      Much like Einstein wasn't interested in doing math because he was mostly into science.
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      Ford's CEO also promised $1 salary if bailed out... time for Z to follow suit
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      $1 salary ofset by million dollar bonus. Not hard for Ford Ceo to say.

      CEO and top exec make more on bonus and option then salary.
     
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