Nortel Shares Fall on Report of Cash Bonuses
From Dow Jones/Associated Press
Shares of Nortel Networks Corp. fell 9% Monday after the Wall Street Journal said the maker of telecommunications equipment gave its top executives cash bonuses instead of stock before issuing an earnings warning in March that sent the Canadian firm’s stock plunging.
The shares fell 31 cents Monday to $3.26 on the New York Stock Exchange.
In past years, Nortel’s long-term compensation award had been granted entirely in the form of restricted stock, the Journal said. But this year, the compensation committee decided to give half of the award in cash.
Nortel’s stock has fallen nearly 44% since the awards were distributed in February, meaning that if the executives had received Nortel stock instead of cash, they would have fared far worse.
