While Rome Burns, More Bonuses for Execs

By Mark Evans | Published: November 26, 2009

Update: CBC (television) will be running a report tonight on its investigation into 72 Nortel executives getting additional bonuses.

If the Nortel soap opera could turn any more bizarre, the CBC has obtained documents that indicate Nortel launched a new compensation plan earlier this Fall that will see executives receive $7.5-million in addition to their 2009 salaries.

According to the CBC, former treasurer John Dolittle, who took over as head of the company’s corporate group in August after CEO Mike Zafirovski abandoned ship, is now the highest paid Nortel employee – making $1.68 million this year – compared with 2008 when he took home $390,000 in salary and $170,000 in investment and bonus money.

While Nortel executives pull in some more dollars from the sinking ship, the Ontario Court of Appeal dismissed appeals by the Canadian Auto Workers union, which wanted former and fired Nortel employees to get retirement and severance payments.

Nortel Retirees and former employees Protection Canada (NRPC), through its lawyers Koskie Minsky LLP, appealed the decision to the Ontario Court of Appeal following the original ruling denying the workers severance and retirement payments in June.

“Nortel’s former employees have been denied their basic rights because of Canada’s cruel and outdated bankruptcy laws” said NRPC spokesperson Paula Klein. “We intend to continue our vigorous fight in the bankruptcy court for just compensation for our losses.”

NPRC national chair Don Sproule added that “We will continue to press our federal representatives to ensure that CCAA and Bankruptcy and Insolvency (BIA) laws are changed to protect these employees who have been discarded by Nortel without the usual protections that are accorded to terminated employees.”

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  • zeroman

    oh the irony Dolittle Takemore ha ha ha ha.

    only at Nortel you get bonuses for taking a company into liquidation. well that is why they kept it in Chapter 11 but operating in Chapter 7. In Chapter 11 you get all the bonuses approved.

    but what thievery with impunity that has no conscience. so much for the ethics and code of conduct these pompous nincompoops have been parroting for years at the company. there is not one sliver of it in their blood.

    NRPC you can't get anything with your stupid statements. get out there, litigate and get all over these people instead of just whining. If you cant then push off so the retirees, pensioners and others get their due with someone else.

  • scalppeeler

    This is not news. Everyone has known about this for a long time. It has already been reported how upper executives have been stealing. This is just a repeat of an old story line. We know they are crooked and have been filing their pockets. Tell me something I do not know. I am surprised the CBC printed it. The CBC is pre-occupied being a terrorist sympathizer crying and whining about possible abuse of terrorist detainees by afghans and leading their news with it at all levels. Almost as pathetic as the government who must spend time on such drivel only because the NDP and Liberals are desperate to bring it up in a lame attempt to get votes from the leftist, terrorist sympathizing canadian, of which there are too many.

  • zeroman

    CBC has blown the whistle. they blew it on OLGC. they should take this mainstream.

    NRPC folks: I can only say that all of you should get out on Parliament or where this dolittle guy sits. Leave all those signs home. Sit out there on a hunger strike or something until changes are made just like the French did.

    The polite Canadian way will not get you anything. Not one penny.

  • Teleguy

    It's isn't new. It was clearly stated after the first bonus that the bonuses would be paid on a quarterly basis after each Earnings report. It's already been mentioned here numerous times And everyone gets them from the Executive down to the code jockeys. You can argue the morality of paying bonuses to a bankrupt company, but this is not news. The CBC is months behind as usual.

  • Teleguy

    You're right, it's isn't new. It was clearly stated after the first bonus that the bonuses would be paid on a Quarterly basis after each Earnings report. It's already been mentioned here numerous times And everyone gets them from the Executive down to the code jockeys. You can argue the morality of paying bonuses to a bankrupt company, but this is not news.
    http://www.allaboutnortel.com/2009/06/08/the-de…

  • wasthere

    You sell your business at liquidation price and the exec's still get bonuses ! This is just another bright example of the world of Corporate dictatorship , we live in. Karl Marx would love this one !

  • protosphere

    “John Dolittle making $1.68 million this year – compared with 2008 when he took home $390,000 in salary and $170,000 in investment and bonus money.”

    Around three times more money for what?

    Nortel stinks
    bonuses and trading options is what caused their demise to begin with as they pull these very same stunts into the close

    Who knows how many bonus happy crooks are acquired by buyers of their business units given the degree of mass orchestration for Canada's largest fraud… for bonuses

    …the punch lines never cease like 9 out 10 top 500 fortune companies buy Nortel, becoming a Nortel partner, there is no better time to buy…

    Is anyone watching this stuff, and all they can do is subpoena them to answer questions with bells on

  • dianeurquhart

    (1) Nortel execs approve more raises
    Thursday, November 26, 2009

    CBC National News:

    http://ismymoneysafe.org/video/CBCNationalNewsN…

    CBC Power and Politics:

    http://ismymoneysafe.org/video/CBCPowerandPolit…

    Nortel Retention Review September 22, 2009 Document from CBC Website:

    http://ismymoneysafe.org/pdf/Nortel-retention-r…

    CBC News Story and Comments
    http://www.cbc.ca/money/story/2009/11/26/nortel…

  • toptart

    I was once proud to work for Nortel – mainly because of my excellent co-workers rather than management, but since Frank Dunn came along it has been one big gravy train for the senior execs. Restatement followed scandal followed restatement followed inaction, followed terrible decisions etc – all the while the execs were lining their pockets.
    Luckily for me I am transferring to Avaya soon and after 16 years in Nortel I must say it cannot come soon enough.
    Before anyone says i could have left anytime, there is no comparable job for me in the small part of the world I live in and with young family, mortgage etc sometimes you just got to do the best you can.

  • protosphere

    EXCELLENT NEWS FOR EMPLOYEES AND PENSIONERS!!!!!!!!

    The government is trying to table a bill (called the “Nortel Bill”) that will supersede prehistoric bankruptcy laws in Canada putting employees and pensioners AHEAD of banks and bondholders as preferred creditors than at the very end of the line where they see nothing!

    Just on the news this morning!

    This bill MUST be enacted while they are under Chapter 11 and before going into full blown Ch 7, and they think they can do this in time!

  • bigNerdRanch

    When I read the story, I was thinking this is just quarterly AIP bonuses that we've know about for months. I suppose we can look forward to another 'news' story in three months time.

  • zeroman

    by the time they pass it, there will no nortel or it will be in chapter 7. this has been around for a while but is getting stalled in government. kind of a win-win for everyone except pensioners and fired employees.

  • zeroman

    this must be a new plan. the bonuses are almost 10 times or 1000% based on 170k bonus. otherwise it is 3 times or 300% based on 390k salary and 170k bonus.

    this is major excess since the company is in full liquidation. Dolittle can leave. do you think he would? if not what is the retention for?

  • qcboris

    I think that we are being misled by a sensationalist cbc story.

    These people are being paid to stick around to put the lights out. They know the company and where the bodies are buried, and can extract maximum value for any remaining assets and IP rather than paying inflated rates by the hour for people from accounting a law firms to do it with little knowledge to do the same work.

    They are probably all employable in other companies and industries as accountants and lawyers. The bonuses for these people is to spend another 24 months wrapping up Nortel maximising what value is left and handling the various claims. Not exactly resume building stuff, unless you want to get hired by other (almost) bankrupt companies. Its pay to stay money to do the dirty work. (Also, I think the amounts are not annual, but 24 month totals until the work is done)

  • NortelEmp

    You are either one of the execs or totally naive. The work is not “dirty” work. The dirty work was done ages ago by the execs who put Nortel into this predicament. Many bonuses are being paid out to employees just for sticking around so that assets can be sold. The pretense under which assets have been sold is questionable. I doubt the buyers truly know what they are getting. Paying the current set of execs millions of dollars to sell off the company is totally ridiculous and unnecessary. They are probably being offered lots of money to encourage them to lie about the potential of what is being sold. You almost sound like you feel sorry for those “left behind”. What a load of crap. Nobody needs incentive to remain employed these days, given that there are so few jobs. They could have easily kept them all by paying them a regular wage, like every other hardworking Canadian. Most employees at Nortel are simply hanging on because they know that layoffs come without severance or even the legally required termination pay. The bonuses for execs were created by and for execs, and is dispicable. They are hundreds if not thousands of laid off employees and pensioners who deserve the money – it was part of their contract, and Nortel used BP to avoid following through. And then they create ridiculous bonuses for the old boys. Give me some of what you are smoking. It must be good.

  • brennaglancey

    I total agree with zeroman. We Nortel Canadian Pensioners are too polite, we are being robbed while execs and junk bond people are going ahead of us. This is a national disgrace. The trouble is it has been going on for soooo long everybody is fedup with hearing about it, which is exactly what Stephen Harper is hoping for. The Canadian people are going to pay for this in the long run, with longer welfare lines and higher taxes. Lets take 31% away from MPP's and see how they like it!

  • zeroman

    ok so I am willing to replace Dolittle for 200K if putting the lights out is needed. there is not much to do except to work with the courts, lawyers, creditors.

    Dolittle can leave if he wants to.

    Zeroman Doalot

  • zeroman

    ok so previously nortel announced bonuses based on formula below

    Bonus Formula: annual salary/four X AIP award (see chart below) x 1.47. The AIP is based on “revenue (33%), cash, cash equivalents and short-term investments (33%) and customer-oriented metrics such as lead time, outage recovery and service responsiveness”. Note: Where’s the part about profitability?

    so how the f* did dolittle get 1.68 million. Revenue is 20%+ down. it turns out to 11% for AIP when previously the AIP table showed top execs AIP at 3.5%

  • wasthere

    Nortel's exec motto : ''Dolittle and suck all the cash you can''

  • felixmk

    I don't know why they need to pay huge retention bonuses:

    1. There is not much left, just CVAS, some patents, and a few old legacy businesses. Not much value left.
    2. The administrators are handling the cash.
    3. Why does anyone care if the last few days of Nortel are orderly? The money is now extracted with the sales to competitors. The customers are protected by the new owners. The employees are either with the acquiring companies or laid off. Who cares if someone forgets to submit a form to the court or pay a bill??
    4. There are plenty of consultants who would do the work for much less.

    Basically, these folks have finagled a big payoff for doing work that is of little value to anyone: creditors, employees, customers.

    Who approves this stuff??

  • scalppeeler

    Bunch of problems with this though.
    For one it is too little too late.
    Number two it is “trying to be tabled”.
    You know how gov't red tape and bureaucracy works.
    If it is tabled you are looking at months of navel gazing, then a vote,
    then appeals etc etc.
    So if it does have teeth it will be a long time from now and it will not help
    employees who were laid off in the past.
    It will help pensionsers but employees that get laid off in the next year
    are probably the only employees who will benefit if a new law is even passed.

  • scalppeeler

    Wasn't doctor doolitte able to talk with animals?
    Maybe they kept him on for that unique ability.

  • freqmgr

    Does anyone have a view of the E&Y pay/bonus structure? Those folks have to be raking in serious cash and benefit by dragging this out. Of course that money goes to them….leaving less for those who have been ripped off. Gee, I forgot the recent announcement…..nothing left for those of us with filed claims. So the remaining ELT and E&Y get fat!

  • freqmgr

    If it does ever get approved maybe Manley's law firm will file to have it ruled out of order? And get paid by E&Y or the rump of Nortel to do that?

  • zeroman

    http://www.cbc.ca/video/news/player.html?clipid…

    has the complete list of people getting bonuses out 2 years. mostly all the people in control, M&A … are they really needed now since everything is sold off.

  • happy2b

    Did you see Doolittle running and hiding his face as he ran to the door while the CBC report was following him asking questions about his salary, Nortel's bonuses, no severance, LTD, then later peeking out from the corner of window.

    What a coward, too ashamed to show his face or answer questions,
    he knows he's a white collar criminal, with no morals or ethics.

    CBC stated 71 executives and managers are getting paid more money
    now in bankruptcy liquidations, than they were paid before filling for
    CCCA and bankruptcy.

    Someone should publish the full list of the 71 people and their bonuses,
    if they could justify it, then they would have no issues facing the people and
    showing their faces.

  • zeroman

    the list is in the CBC video.

  • 4merEmployee22

    Who approves this stuff?

    WHO ELSE? Probably approved by the MONITOR ( E & Y Law firm )
    the one monitoring the bankruptcy process, and
    of course by the Bankruptcy Court Judges! and some NORTEL Lawyers!!!

    Who approved the first $45 million dollars bonuses? The bankruptcy court Judges!!!
    The MONITOR of course persuaded the Judges to approve it! What else?

    Isn't one of the remaining members of the BOD a former employee of E & Y?

    Pls correct me if I am mistaken?

  • 4merEmployee22

    You can check out their website. They set up a “ESCROW ACCOUNT”
    of so many million dollars. In the end of all this freakin' fiasco, they will
    earn more than $5,000,000 million dollars for their Legal Service Fees!!!
    The escrow account is a guaranteed easy money for them!!!

    HERE IS ANOTHER QUESTION: JUST WHO THE HECK APPROVED
    THE “ESCROW ACCOUNT” ?
    But no account set aside to pay the “Retirees” of their owed allowances!

    Nortel should have set aside a “TRUST ACCOUNT” for all “Retirees”.

  • 4merEmployee22

    Nice opinion! Ma.. man!

    But all that contracts ( under negotiated Unions or not )
    were all QUASHED by the CCAA proceedings.
    I don't really understand where it is specified in that CCAA or Chapter 11
    rules and Acts???
    Also, the CCAA- Companies Creditors Arrangement Acts is a Federal Acts
    and yet the Bankruptcy proceedings was filed and being presided by a
    Provincial Bankruptcy Court Judge! Why?
    OH HOW I WISHED THAT A FEDERAL BANKRUPTCY JUDGE CAN JUST
    QUASHED THIS NORTEL BANKRUPTCY PROTECTION COVER UP???

    They misled the employees and the public by stating to re-structure the
    company, but instead one by one selling-off business units! Who made that
    descision? Was it the ex-CEO or the BOD's? The ex- CEO resigned and
    hoping to get his $12,000,000 US dollars claim?

  • 4merEmployee22

    Perhaps NRPC should take NORTEL up to the Supreme Court of Canada!
    Under the Constitution of Canada… Section: Rights of Individuals
    Nortel retirees and pensioners were being rightly DEPRIVED of monetary awards!

  • less

    lol – the punchlines abound.
    This is Nortel. As always we are pioneering the next generation of telecommunications. This time its 100% biodegradable wireless: When Dolittle talks animals listen.

  • happy2b

    You can read some of the names, but not all of the 72 names or what their bonuses were, or what they made before and after CCCA.

  • Nortel watcher

    Is it possible to see a PDF of the 72 names?

  • norcan_pen

    Here is a link to five video clips of CBC News Network coverage on the Nortel Execs bonuses from TV news broadcasts of 26 & 27 Nov.

    http://www.youtube.com/view_play_list?p=E039011…

  • norcan_pen

    You can see the pdf doc of Nortel's retention bonus plan simply by clicking on the article's CBC link above, and selecting ” DOCUMENT: Nortel retention review ”
    (This pdf link is in the related box to the right of the photo of phase 5 tower.)

  • Nortel watcher

    norcan_pen,

    I had seen the doc. already thinking the names would be on there but they are not. CBC has the list but hasn't made it public which makes no sense because the close-up shot of the camera displayed clearly the names of about a dozen people.

  • tainted_koolaid

    EX-NORTEL PEOPLE RISE UP AND SHOUT YOUR OUTRAGE AT THIS TRAVESTY. ZEROMAN, HACKLESS, AND FLANAGAG, HAVE SCREWED OVER GOOD PEOPLE THAT COMMITTED 20, 30 YEARS, A LIFETIME DEDICATED TO MAKING NORTEL A GREAT COMPANY AND ARE NOW SCRAMBLING TO SAVE WHAT'S LEFT OF THEIR PENSIONS. THESE MORONS DESTROYED NORTEL AND ARE NOW REWARDING THEIR BUDDIES AND OTHER LOSERS THEY HAVE HIRED OVER THE PAST FEW YEARS FOR WHAT, ENHANCING THEIR FAILED MANAGMENT STRATEGIES (SIX SIGMA), AND OTHER MANAGMENT WHO HAD AND CONTINUE TO HAVE THEIR HEADS SO FAR UP THESE GE THROW-OFFS BUTTS THEY COULDN'T AND CAN'T HEAR WHAT STAFF WHO HAD A LIFETIME WITH NORTEL WERE AND ARE TELLING THEM. “RETENTION” BONUSES, WHERE ARE THESE IDIOTS GOING TO GET A JOB IN THIS UNEMPLOYMENT CLIMATE AND WHO WOULD HIRE THEM. THESE GUYS ARE STEALING FROM THE VERY PEOPLE THAT MADE NORTEL GREAT, IT'S CRIMINAL. EX-NORTEL PEOPLE RISE UP AND SHOW YOUR OUTRAGE AND DISGUST!!

  • henrylow

    There's a movement to radically change California government, by getting rid of career politicians and chopping their salaries in half. A group known as Citizens for California Reform wants to make the California legislature a part time time job, just like it was until 1966.
    http://www.onlineuniversalwork.com

  • henrylow

    There's a movement to radically change California government, by getting rid of career politicians and chopping their salaries in half. A group known as Citizens for California Reform wants to make the California legislature a part time time job, just like it was until 1966.
    http://www.onlineuniversalwork.com

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