No Pay Cut for Mike Z.

By Mark Evans | Published: February 10, 2009

So, let me get this right: Nortel plans to lay off a lot more people, and has cut the severance payments from people who have been laid off recently BUT CEO Mike Zafirovski seems unwilling to accept any financial pain himself?

In an interview with Ottawa Citizen, Mike Z. defended his 2008 salary of $1.2-million, and noted he and other executives would not be paid cash bonuses for 2008.

As I wrote recently, if I were Mike Z. and sensitive to the optics of what’s happening around him, I would declare that I would only take a $1 salary until the restructuring had been implemented.

In the scheme of things, it wouldn’t be a huge financial hit but it would a major symbolic gesture. At the very least, I’m puzzled by Mike Z.’s approach.

Then again, he also chalked up $137,000 in personal expenses related to his use of Nortel’s corporate jets.

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  • Another_Nortel_Watcher

    However, in parallel to the ongoing work in the businesses, there is still much that is in flux as we advance the restructuring process. What I do know for sure is this: Nortel is going to change significantly in many ways. We are going to get smaller[ and smaller and smaller...]. And that will impact people [but not me]. But, we are also going to get leaner, more agile and more responsive. We must create a cost structure that is aligned with our revenue base [which is continuing to erode because neither I nor the people I've hired not the dinosaurs I decided to keep have no clue how to grow it] and our investment plans for the future. As we discuss and review with our creditors, we will know more, and tell you more.

    So, what's next? First, we need to continue to stabilize our business and our customer base [by prematurely declaring bankruptcy]. Second, we will be ramping up the planning phase as the creditors' committees come together and we look to develop the go-forward plan for the company. Throughout this, we will be continuing to focus on reducing costs across the business, as virtually every company in the world in virtually every industry is doing today [and besides, it's all I know how to do]. All of these measures together will lay a path for the future that is sustainable and affordable.

  • less

    BWAHAHAHA! This is priceless:

    http://www.newsobserver.com/104/story/448348.html

    Jun. 08, 2006

    Joel Hackney had a hand in shaping the future of Nortel Networks even before he agreed to take the top job at the multinational company's third-largest site, in Research Triangle Park

    “The new leadership is designed to remove the taint of past management, a taint that remains with the company still,” said analyst Jim Kelleher of Argus Research, a financial research firm, in a recent report to investors. Nortel “is more at risk of ceding further market share than in position to gain share, and it has yet to demonstrate it can operate effectively in the brand new world of cutthroat pricing and ephemeral customer loyalties.”

    To counter such concerns, both Hackney and Zafirovski, disciples of legendary GE boss Jack Welch, want to imprint GE's unremitting management philosophy on Nortel's corporate culture.

    Taking a cue from Welch, Zafirovski has declared that Nortel will focus on lines of business where it is first or second in market share. The company is applying a statistical methodology institutionalized at GE to reduce the likelihood of product defects. Nortel is reviewing internal procurement processes in an attempt to save millions of dollars on contracts with vendors and manufacturers. And it wants to expand into providing more networking management services — RTP is home to one of Nortel's three global networking operations centers — instead of just selling networking hardware.

    Hackney said he left GE because he wanted the opportunity to work with Zafirovski again and to play a role in restoring Nortel's reputation. The downside, as he saw it, was that analysts and investors would demand instant results, whereas he and Zafirovski realized the recovery would take three to five years.

    Still, Hackney does not show a hint of doubt about his move.

    “If you look at my life, it's as if it was being built for this [Nortel] job,” he said. “My story is not unique in the sense if you look at the recent additions to Mike Z's cabinet. We all left great careers and huge opportunities to come here.”

  • skeptical2009

    95% of you people are disgruntled idiots with nothing better to do with your lives than grind axes and obsess over things you cant control. if this is a sample of the quality of nortel engineers, then it's not surprising the company is BK.

  • less

    I'm game to try Deep Thought: Global warming is real. Impeach Bushitler. The fourth shot came from the grassy knoll, courtesy of the Secret Society's oil cabal.

    Better?

  • less

    Google hits:

    15,400,000 for “nortel”

    81,300 for “impeach bushitler”
    410,000 for “grassy knoll”
    1,950,000 for “oil cabal”
    25,100,000 for “secret society”
    58,900,000 for “global warming”

    oh and lest I forget the most smartest

    694,000,000 for US 52 states

    -When did the usa change from 52 stated to 50 states
    -What are the names of the 52 states of america. please?
    -Were there 52 states?
    -Map of 52 States in USA
    -According to this press release, America has 52 states
    -every coworker I asked responded that the U.S. has 52 states

  • skeptical2009

    afghanistan is 51st and iraq the 52nd.

  • broadbandbill

    If Nortel's engineers were as bad as you are implying then NT would have filed for BK long ago. Why now? Only one answer: GROSS MISSMANAGEMENT!!!!!

    Yo Joel, stating facts is not the same as grinding axes…—bb

  • Anonymous

    There is a key point in all of this. I am firmly convinced Mike Z would make a great COO. He is operationally focused, has a passion for process and metrics (ie LSS) and gets the management of cost structure (other than the jet).

    However, he is in the CEO job. The CEO job requires much more – a focus on vision, the strategies to focus the vision and creating both the organization and culture that make it happen and allow the company to be successful. On all these points, he has been weighed and judged to be lacking.

    Much as everyone has a hate on for Roth, John’s strengths together with Mikes would have given the company a fighting chance (would still need help on communications and people!). What is in place now is a CEO who is really a COO. With the team left around him, there isnt anyone picking up the slack or void.

    Sadly, doesnt leave me with high confidence the restructuring plan will be the salvation, but I guess we’ll all have to wait and see.

  • broadbandbill

    Lost in translation — Reads: “Hackney was one of his first recruits.”

    Should read: ‘Hackney was one of his first and biggest mistakes…’ Z is THE WORST talent scout I have ever encountered…–bb

  • ToasterTank

    You would think that since the size of the company is so much smaller today than it was when Mike Z assumed command that his pay would be downsized accordingly. Maybe a better question would be just how much smaller does the company have become before Mike Z's salary is downsized or the CEO position is offshored for a whole lot less $.

  • scalpcutter

    you are an A**hole skeptic

  • whatnext4nt

    Inflation of the Mike S. Zafirovski Sports and Recreation Center dome!

    http://www.youtube.com/watch?v=Pu1Ps0LYmM4

    lol!

  • rfc1149

    Just my observation. He is fixated on trivial 'tactical' operating metrics without any apparent understanding of anything 'strategic'.

    Part of doing any job is 'getting it'. When people get promoted to a job the don't 'get', they keep doing their old job and ignore all other aspects of their new one (e.g. the 1st level manager who spends the bulk of his/her writing code).

    While it is undoubtedly true that Nortel is not the most operational effective company on the planet, being so would make no real difference.

    Operational effectiveness was important in his old job making cell phones. A key point is getting billions of components to the right places at the right time to create 10 millions of phones. Cutting a penny or two can make a huge difference. Cutting a penny or two from a few thousand Passports is utterly irrelevant (and kinda silly given that the bulk of the supply chain activity has been outsourced anyway).

    Different types of business require different focus. A 'one true' way to run any business in any circumstance is snake oil. It is surreal and telling that he actually believes he's done a good job. Even if Nortel wasn't in bankruptcy protection, that he believes a .5% improvement in operations is his major accomplishment for a CEO should give any competent board pause.

    Note also that Nortel doesn't currently have a COO. It does have a 'Executive Vice President, Corporate Operations' but this is head of various operational aspects of the corporation (supply chain management, real estate etc).

  • rfc1149

    Thanks – 3251 would seem to fit nicely with Nortel's green initiatives as well:)

  • Another_Nortel_Watcher

    Brilliant post. Right on target.

  • Theleftbehind

    Dude. You didn't get it. Nobody is threatening anybody. Just a question.
    You probably gave to grow up as you probably continue working there accepting the daily phsicological brutality being inflected by these guys. If you knew the real story behind how nortel ended in chap 11 you would realize how thisis the result of perfonsl agendas and not market.

  • ERworker

    What will end up happening, and this is assuming Nortel and Z survive (a HUGE assumption), is that Z and his cronies will end up with big fat raises for all their hard work while those of us that survive will be lucky we get anything (and be told by Z just how lucky we are – Now get back to work!).

  • longgone

    and full of Zschitt

  • skeptical2009

    and you're unemployable. good luck with that..bwaahaa

  • skeptical2009

    stating facts?? 'normal people' do it once or twice, not obsessively on every new thread. I stumbled on this link and read most of the comments over the past few weeks. there is precious little in the way of “facts” and mostly undiluted bile from losers.

  • broadbandbill

    Thanks for visiting us Joel but be advised that some of us DO hit back.

    Need to take a closer look to better understand who made them ‘losers’. When gross incompetence combined with management IMPOTANCE causes both financial and employment loses the visceral reaction against those that caused it is only a natural response. It beats battery and assault.

    And speaking of obsessive, why are you reading this blog that your ‘stumbled upon during the past few weeks’; shouldn’t you have stopped after reading one or two of its ‘obsessive’ postings. Sounds as if you have an issue with obsessiveness yourself. Takes one to know one, they say.

    Lastly, what is there to be Skeptical about? Those losers in management have lost more than they can ever repair, CH11 or not. Z singlehandedly “De-Created a Great Company”. Only blind idiots could be skeptical to the facts…–bb

  • less

    “Spewed” is the word the Winners prefer.

    Google hits: 8,160,000 for bush spews

  • wornoutnortelemployee

    If it is the case the Mike Z is going to speak to the Ottawa employees later this month then I hope that they have the courage to show him what they really think of him – whilst shoe throwing might be over the top and little gentle booing or even walking out early from the meeting might be a big hint to him!!!
    Perhaps those of us who remain could start emailing him a few virtual shoes in response to the awful z-mails that keep hitting our in boxes!! My loyalty is now only to my colleagues who remain and the extra hours and work that I am putting in are to try and secure some type of future for as many of them as possible – but no doubt a lot of what I do will just pay for the huge retention bonuses for Mike and his cronies. Enough to make you weep! Heads they win and tails we lose.

  • 22years

    Here is an article that Zman needs to read. Good to see that some real leaders believe in pay for performance.

    http://www.ajc.com/metro/content/business/stori…

  • 22years

    Here is an article that Zman needs to read. Good to see that some real leaders believe in pay for performance.

    http://www.ajc.com/metro/content/business/stori…

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