Whooooooa Nortel. It's pretty obvious that you're not in line for a Canadian government bailout (yet), but to pay your executives bonuses to stick around? Or is this a diversion by the CEO, to justify his salary continuance?In an understatement of the year, Nortel's in trouble; one with any sense of reason would conclude that giving out bonuses isn't the priority, nor is keeping the same salary base for a company that isn't profitable.
The new White House administration has at least attempted to block self-absorbed executives on the dole from rewarding themselves. While the global economy goes south, Nortel is headed north with incentives to retain what they say is a "dispirited workforce."
Unfortunately, anyone with a job should be happy. The thievery of 401Ks, IRAs and other retirement and savings vehicles are simply unfathomable. Then, the woes of mismanagement and one's right to bonuses and executive perks isn't questionable; it's criminal. Look below the executive line and try using the same criteria for rewards and punishments. While it's not posh to discuss or even question executive pay, incentives, bonuses and other rewards, it isn't acceptable to bleed a dying horse either.
You see, as fundamental as it is or as it should be--sharing profits with your shareholders is something you do when you are profitable. This is basic. Sharing profits with your employees when you are profitable is also something you do, not just when you're in trouble. Of course there are the executive entitlements too. While there are some that will argue the money is small or insignificant ($45M USD for 1,000 executives and $3M USD for 19,400 others), there are some others that Nortel owes money to who will argue that they should get paid first. Nortel argues that these bonuses are only going to 5.1% of those in their workforce that are best performers. Paying rewards to any employee for a bad performing company has never been a great idea. But paying bonuses to those top performers that run the troubled company should raise the level of scrutiny on any public company sitting before a bankruptcy court.
It's true you can lead a horse to water but you can't make him drink. It's equally true that you can't keep beating a dead one either, so there's no point in feeding him. Turnaround involves skin-in-the-game; sweat equity, sacrifice and a lot of goodwill. I'm beginning to think that Nortel is that (by its own hand) nearly dead horse.
