The IT Nerd

Nortel Networks goes bankrupt, but that little detail doesn’t stop senior executives from wanting to cash out from a bonus pool that might be as high as $23 million. According to The Globe And Mail, a group of Nortel workers who haven’t received their severance pay are trying to stop that from happening:

Toronto lawyer Eli Karp, who is representing about 60 of Nortel’s 1,100 Canadian workers who have not received severance payments, said the employees are dismayed to see large bonuses paid to executives at the same time the company is refusing to honour their promised severance costs.

He said that leaves the workers forced to turn to government employment insurance for income.

“In the context of the global financial climate the way it is today, our clients object to millions of dollars of bonus payments being made,” Mr. Karp said.

“Our clients are now on the government employment insurance payroll and at the same time, the company seeks to pay millions of dollars to its executives while leaving employees not receiving their severance payments.”

Nortel of course sees it differently, which is why they’re in court to try and stop this from happening. Meanwhile people at Nortel continue to lose their jobs, and retirees get screwed out of their pensions.

I guess it’s a another day in the big bad world of private enterprise.

UPDATE: The link to the story has been updated by The Globe And Mail to reflect that the court has approved the execs getting the bonus money. How craptastic….

I’m not sure what drugs this guy is smoking, but check this out. Nortel (you know, the currently TITSUP Nortel) CEO Mike Zafirovski has no plans to cut his salary even though his laid off employees, retirees, and suppliers are all going to get hosed by the fact that Nortel is in creditor protection:

In an interview on Tuesday, Mr. Zafirovski noted that his base pay of US$1.2-million has not changed in several years and that he and other executives will receive no cash bonuses for 2008.

While some executives of top companies have cut their pay to US$1 when their companies hit trouble, Mr. Zafirovski said those executives also typically got stock option awards in the US$25-million range.

“This a very different environment today, though our plans (for 2009 compensation) have not been finalized.”

Hello? Earth to Mr. Z? Are you on the same planet as the rest of us? Get a clue! You need to show that you’re trying to do something other than line your pockets with cash while Nortel dies.

Hopefully somebody gives him a kick in the ass helps him to see that this is a really bad idea.

(BTW, titsup is not what you think it is. Here is the defitinion of the word.)

Once the darling of the Canadian technology industry, Nortel Networks has filed for creditor protection in both Canada and the United States. Creditor protection would give the company more opportunities to explore restructuring options or sell off some of its assets, but it could also leave the company open to being bought for pennies on the dollar. Nortel was once the most valuable company in Canada with a $366-billion (Canadian) market cap and 95,000 employees. Of course that was before the dot come bubble burst eight years ago. It has never recovered and has a market cap of $192-million as of yesterday with 26,000 employees. Today the shares are likely worthless and what employees are left are mass e-mailing their resumes (assuming they weren’t already doing that). However, it is still the biggest telecom manufacturer on the planet, which makes their assets worth buying by companies like Cisco and Nokia to name a couple.

By the way, Nortel can expect to lose significantly more business because of this filing, which will likely send the company into a death spiral. So you can expect this company to die shortly.

For Canadians, this is a sad moment.