So, How Much is Mike Z. Making This Year?

By Mark Evans | Published: May 25, 2009

With Nortel not holding an AGM this year and not issuing a proxy circular – as much as I can tell – there hasn’t been much information or discussion about how much CEO Mike Zafirovski is getting paid this year as the company struggles to escape from bankruptcy protection.

In 2008, Mike Z. received a salary of $1.28-million, as well stock awards of 3.7-million, option awards of $3.7-mllion and other compensation of $378,466. In total, he made a cool $9.68-million. Keep in mind that Mike Z. also has a sweet for-life pension plan of $366,000 that will kick in shortly after he leaves Nortel. (More information in Nortel’s 10-Q filing)

So, the question is how much Mike Z. is making in 2009. After watching the company plummet into bankruptcy protection based, in part, due to bad strategic decisions, how much are Mike Z. and his senior management team going to be rewarded this year?

Is his salary and the other salaries of senior executives being reduced so they can share the pain? Has Nortel tweaked the annual incentive plan when it comes to senior executives? Keep in mind, this is separate from the Key Executive Incentive Plan (of which Mike Z. is not participating) and the Key Employee Retention Plan.

How come Mike Z. hasn’t taken the symbolic plunge and decided to work for a $1 in 2009. I know this is something I’ve raised before but given how much money Nortel has paid Mike Z. over the past three years, given thousands of hard-working people have lost their jobs, and given the overall economic climate, taking a $1 salary (a la Cisco’s John Chambers and Chrysler’s Lee Iacocca would be a significant goodwill gesture.

With all the incentive plans in place at Nortel, it’s hard not to get the impression a lot of people are going to be compensated and rewarded for steering Nortel out of bankruptcy protection, or orchestrating the sale of key assets. That hardly seems fair given how much pain senior management has inflicted.

Picture 24

http://www.nortel.com/corporate/investor/reports/collateral/2008_form_10K_nnc.pdf

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  • NortelEngineer

    Motorola's CEO is getting 110M per year. If he receives one month salary and opts for $1 for other 11 months still it is much more than what Mike Z is getting.

    I think as CEO he deserves this much. We need details of salaries received by CEO's of other OEMs to comment on this.

  • less

    I'd be content with $110 per day

  • exnt2

    taking a lower salary requires leadership, a person who leads from the front. it takes guts and principles.

    Z is not that person. how can you even suggest him taking $1. I think his career is over this point on. Maybe a consulting job where he will make good money but I don't think he is going to be trusted to take on any major brand name corporation. so he has to milk nortel for whatever he gets. after all having a huge house, tuition fees and an annual laundry bill of $150K does suck up a lot of money.

    In case anybody is wondering $150K for laundry bill – well thats what he gets now in perks. salary for two engineers.

  • ACloseObserver

    He might have an incentive to take a symbolic pay cut if he knew NT had a chance as a going concern…he would be able to make up the cut in future years. But NT has no chance as a going concern, so he's going to take everything that he can until they shut it down.

  • FuckMikeZ

    MikeZ should pay back $1000M per year to Nortel until he is out of Nortel for 5 years. His pay back money should be used for those employees who lost jobs during MikeZ's period.

  • soundslikesourgrapes

    His payback should be used for current employees who are getting shorted.
    The ones who do the work but don't get compensated fairly.

  • TongueInCheek

    Since the Stock Awards and Stock Options vest over a 3 or 4 year period and that the Stock Options are now canceled, looks like he is out about $7.5 Million. Then again, this type of information would never be included in a post such as this.

    For 2009, I doubt he will make much more than his base salary given all that is going on. Clearly he won't be getting stock based compensation in 2009 and the previous unvested stock units are essentially gone.

  • GrabYourNeck

    The worst thing is the way Mike and his executive team are doing now. My friend, a JC-4 guy (still working for Nortel) told me that he was so surprised that he even got a BIG bonus (about 4% of his salary). He also wonders how much people above his level are getting and all those executives. At this time, no one will expect to get bonus and Nortel executive's decision is the most stupid one.

    I just couldn't understand the judge and the decision to approve the bonus decision.

  • soundslikesourgrapes

    He'll be in jail or worse if he pulls any shenanigans like that.
    I would hope macedonians have more scruples, morals and pride than that.
    I think you gotta cut him a little slack until everything is finalized.
    Then make an informed comment and opinion.

  • protosphere

    Last 3 years totals around $28M
    Add the 37 mill they paid for him and to settle for defrauding Motorola on several written occasions = $65M

    I guess the cool million he spent when claiming $20 was a buying opportunity, and another half million averaging down at at 7 bucks, totaling $1.5M is a drop in the bucket leading the lemmings astray unrepentantly. Nice try but so much for the shareholders today.

    He may have excluded himself from KEIP (should have been spelled KEEP like the 2003 fraud bonuses they fought to keep at their kangaroo AGM) but Hackney is in for a bone us as they add severances to creditors and UIC line …

    Heh, never mind being able to run an even larger company as they boasted a while ago, they couldn't even run this one, and Hackney says they do not have to be large company to be profitable in the future…profit something that eludes them for a decade like reality but unlike their bonuses.

    Who allows them to operate like this? First under safe harbor and the benefit of the doubt, and now cutting pensions and severances while circumventing creditors getting court approving for bonuses to loot the corpse. Judge Gross should seek employment elsewhere. The ongoing hype only adds insult to injury to insult anyone's intelligence…. they do whatever they want it seems like all sins forgiven, court approvals always, and bonuses galore. This is astounding.

    Perhaps it was such a hard position to fill he can promote his green pals and hold ultimatums to running the company into the close…even after already running to the ground.

    Too many still there, board makes fishy decisions, too many big guys behind the scenes, big bucks fly into the close, and those not at the crime scene do whatever they want to the extent of ironically trading options for cash yet again while increasing lawsuit insurance.

    Is anyone watching this stuff?

  • protosphere

    TongleInCheeks, why do you brown nose so much?

    How can you defend this green first time CEO who defrauded his past employer, one who passed him by, a green CEO who promoted than fired his green criminally charged pal to the employees horror that tanked his area of concern since he replaced a proven veteran that went to Cisco who they slandered like Gary or with some lame energy tax, endless contradictions from revisions to buying opportunities and turn around plans, etc.,… it is all so endless we can fill pages with the lies, and all BS. Like you. Pure BS.

    Even this board didn't like their traditional options so they traded them for cash yet again. Why didn't you include this information in your post instead too than judge others from your own selective reactions in what is excluded or included. Shear idiocy like claiming anyone would be profiting from this blog or neglecting the mortgage money from the US in your numbers when we showed what they got to help fund operations, etc. Do you think we believe you or your speculation, your accuracy in what you selectively claim to the consensus' opposition.

    Even if what you stated was complete and true, what difference does this make to total compensation he got since 2005 in what is included/ excluded and actually published the way they finangle. The point is he is sharing no responsibility for performance as they loot the soon to be buried corpse legally. Did this point at least sink or elude you TongeInCheeks? Calling others terrorists or totalitarianly trying to pit employees against realists who back them, as you defend this CEO… just who are you to consistently cheerlead into their final hours with false and misleading information /consistently proven nonsense amid a selective reality.

    This CEO walks financially unscathed, albeit seemingly morally bankrupt as you may best relate to, excluding seemingly.

    The stock lost 99% of its value when he tried to manipulate his company's stock telling everyone it was a buy… his compensation did not suffer anywhere nearly as gravely as the shareholders, creditors, employees, etc.

  • ntdeadz

    Who care about Mike Zero salary… even US $ 1 .00 per year will be way too much for this dummy….
    Maybe he also receiving lum sum un-declare money from a Nortel Competitor for destroying Nortel !!! Where is the BoD ? Need Auditor to investigate ASAP !

  • Theleftbehind

    It goes to 30% of salary for JCI6

  • Theleftbehind

    Unfortunately the salary is irrelevant at this point as the real cost of his “work” is the destruction of a 110 years company. His cost was $10B in shareholder equity destruction.

  • less

    On the upside:

    http://www.youtube.com/watch?v=TNOk2Kpkt6I&feat…

    Nortel is probably spending next to $0 running its network.

  • InTheField

    How come Mike Z. hasn’t taken the symbolic plunge and decided to work for a $1 in 2009?

    Integrity & character, baby …a lack thereof.

  • nothappyanymore

    these days had heard too many comments from jci-4 and above ppl (mostly old dogs), that they are waiting/getting decently high bonuses.. as usual the real workers & talented colleagues, are the ultra minority portion on these rewards.

  • TongueInCheek

    Did you even notice that the headline post was phrased as a question? I answered the question while providing some factual and relevant information Mark choose not to include.

  • freqmgr

    I thought a few months ago I saw something where Mike Z justified not cutting his salary to $1. Does anyone still have the URL? Of course it may not be there any more

  • exnt2

    heard the same thing. bottom rung is about 2% for a very limited number of people. managers about 4%, senior managers 6%+. kicker is for vps who get massive bonuses around 10%. when they make $400K its a huge chunk of change when there are so many of them in the company.

    old dogs is right. its an elite club and if you are not in it too bad. old dogs also realize there is no career after this is over.

  • soundslikesourgrapes

    My sources at Nortel tell me this latest payout has just created more problems internally. Instead of targeting the payout inversely proportional to JCI level and giving more to the lower JCI levels they are overpaying the higher JCI levels and again neglecting the people who do the real work. It is no wonder people are leaving that place and actively looking elsewhere. Everytime Nortel has a chance to do something right, they seem to screw it up with the current management they have left there.
    You can argue a higher JCI deserves more if they hold a patent, are a key designer/developer or if nobody else can be do the job they do and be as effective. But this is the rarity and exception. Maybe your friend is one of them maybe he is not. Key also would be how much does that person directly contribute to revenue. Never mind how well he scratches the back of the boss. There is some serious fixing up that needs to be done at that place.
    If they were interested in doing it right the lower the JCI, the bigger the payout.
    That makes the ones who do less more nervous and lets them know they can't hide behind the veil of the buddy system anymore,

  • broadbandbill

    Chambers and Iacocca are real leaders; Z is a hearltess and soulless hatchet man in the true mold of his mentor. Not the Macedonian I hoped he was!…–bb

  • joedoe1

    http://www.ottawacitizen.com/Business/Nortel+de… CEO defends salary, despite woes

    $1.2M base pay hasn't changed in three years, Zafirovski says

    Here ist the link, this useless” worldclass Exec”is not even ashamed to whine, that his salary hasn't changes since three years ha ha ,no matte how much he gets paid, every penny is wasted anyways

    http://www.ottawacitizen.com/Business/Nortel+de…

  • freqmgr

    And Richard Lowe has made the same point…being stuck at the same salary for so long.

    Regards,

    Mike

  • freqmgr

    And Richard Lowe has made the same point…being stuck at the same salary for so long.

    Regards,

    Mike

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