Bonuses for Dismantling Nortel?

Earlier this year, Nortel introduced some controversial bonus plans worth a potential $45-million, including one – the Key Executive Incentive Plan (KEIP) that could see eight senior executives (not including CEO Mike Zafirovski) receive as much as $7.3-million

The KEIP bonuses are tied to three milestones:

1. The achievement of targets to reduce costs in North America
2. The achievement of a “leaner and more focused” business
3. Confirmation by the Canadian court of the reorganization plan
With Nortel now deciding to sell all of its assets, the question that has to be asked is whether these bonuses should be paid. Should senior executives be rewarded for carrying out a restructuring plan that has nothing to do with restructuring, and everything to do with gutting Canada’s flagship high-tech company.

From where I sit, you shouldn’t get rewarded for presiding over a multi-billion dollar fire-sale after doing such a lousy job of managing the company over the past few years. It’s a farce that bonuses are being rewarded when employees are being axed without severance, while pensioners are getting their payments reduced.

For more on the bonus plans and growing opposition to them, check out the Ottawa Citizen.

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