Nortel needs to keep its top people through its 'restructuring' and so as to keep em has to pay retention bonuses.
Nortel has fired thousands but can't pay severance. But it can pay retention bonuses to keep the 'key people' who, it would seem to an outsider, drove the company into the ground.
So the people who actually produce something don't get paid what they earned while the people who, well whatever they did did, get paid extra? It's a Canadian AIG but worse.
At least AIG could claim there was legal obligation to pay retention bonuses -- here the bonuses seem wholly unforced except to the thinking of restructuring advisors.
Where is our Parliamentary outrage???
My faith in the market weakens daily.
Legal battle looms over Nortel exec bonuses
TORONTO -- Nortel Networks Corp. has won approval to pay senior executives millions in retention bonuses as part of a plan to keep key personnel from fleeing the company as it undergoes court-protected restructuring.
However, a legal battle is looming. Courts in Canada and the U.S. granted the company the right pay a combined US$7.3-million to top-level managers Friday -- even as thousands of former employees are being denied severance payments.
"You need to keep the good people to make sure this restructuring is successful in order to preserve as many jobs as you can and in order to preserve as much value as you can in this enterprise," said Derrick Tay, Nortel's chief counsel during a break in proceedings at the Ontario Superior Court of Justice.
In total, three identified executives in Canada and five in the U.S. will share in the bonus pool. Another 26 employees in Canada were approved earlier this month to receive a portion of a US$23-million program designed to retain 92 senior managers worldwide.
The identities of the eight executives were filed in confidential court materials but not made public for competitive reasons, said Mr. Tay.
"If you disclose that information it's very easy for competitors to come along and say, 'Well, you're getting X dollars, I'll give you X plus Y.' You're drawing a road map for competitors to come pick your key people."
James Morton
5 comments:
Which eight executives? I read every word of the article looking for names. I suggest that they were omitted for strategic reasons.
"Retention bonuses?" Please.
"Where is our Parliamentary outrage???"
Where they often are in the last year - on vacation. Ridiculous!
I'd like to know exactly why this execs would need to be financially incented to stay. What other companies are out there trying to raid/hire highly paid execs of a company that's been failing for years. I wouldn't be looking to hire any of them. They should feel fortunate to have jobs at all. That bonus money would likely be better spent on lower level employees or retraining to avoid further layoffs. It's not rocket science.
I'd like to know exactly why this execs would need to be financially incented to stay. What other companies are out there trying to raid/hire highly paid execs of a company that's been failing for years. I wouldn't be looking to hire any of them. They should feel fortunate to have jobs at all. That bonus money would likely be better spent on lower level employees or retraining to avoid further layoffs. It's not rocket science.
Henry Juroviesky of Juroviesky and Ricci LLP and independent financial analyst, Diane Urquhart, are hosting a webinar on Wednesday, March 25, 2009 at 3:00 PM EDT to update you on our plan to accelerate and maximize the recovery of the termination and severance pay owed to Nortel Canadian terminated employees and to facilitate the creation of additional value for the Nortel estate. We will answer questions about our no 'up-front fee/retainer’ and clarify any confusion you may have about our legal plan.
Reserve your Webinar seat now at:
https://www2.gotomeeting.com/register/585229926
Please register at least 15 minutes before the scheduled time of the webinar.
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