Nortel Networks Corp., a company in bankruptcy protection and already under fire for handing out executive bonuses earlier this year, approved a plan this fall to give another round of raises to its top managers. Sources say 72 Nortel executives will have a total of $7.5 million US added on top of their current salaries in 2009. Of those 72 executives, 14 will be getting compensation of $500,000 or more. The biggest earner under the new compensation plan is former treasurer John Doolittle, who took over as head of the company’s corporate group in August after the departure of chief executive Mike Zafirovski. Doolittle’s total compensation has been bumped to $1.68 million this year, an increase of 1.12 million over 2008. Before departing, his predecessor told a House of Commons finance committee looking into the situation that the company’s constrained cash resources and competing creditor claims meant it wasn’t possible to pay severance to laid-off employees. He also said the company decided to trim the value paid out for pension benefits to reflect their pension plan’s current funding levels. He further enraged retired Nortel employees when he made a filing in October with a U.S. bankruptcy court naming himself as a creditor and claiming more than $12 million US from the company, about half of which was for his own pension benefits. That claim is still under review.
Jan 01