Sunday, May 09, 2004

Lucent and the concentration of wealth

Title: Lucent Throws A Pay Party
Source: Forbes
Date: May 6, 2004

From the article:
    "Lucent Technologies may be a shadow of its former self, but there is one place where this company still puts world-class numbers on the board, and that's executive compensation.

    In two years since becoming chief executive, Patricia Russo has received compensation worth more than $44 million."
In addition, four top executives -- Frank D'Amelio, William O'Shea, Janet Davidson and James Brewington -- have received:
  • $10 million in "retention bonuses"
  • $2.4 million in salary
  • $2.8 million in bonuses
  • 3.75 million options
  • $3.5 million in long-term bonuses
For what? According to the article: "Lucent's share price has dropped 40% since Russo took over in January 2002--from $5.87 to $3.50--and the company has lost $10 billion in market value, falling to $15 billion... In fiscal 2003 Lucent reported a net loss of $1.2 billion on sales of $8.5 billion. This year Lucent is expected to report a net profit, but there's a catch: The profit is being delivered by an accounting credit from a pension fund surplus, without which Lucent would post a net loss of several hundred million dollars this year."

See this post for additional details.