Alcatel-Lucent Cuts Ex-CEO Compensation

After weeks of pressure from French government officials and workers unions, Alcatel-Lucent slashed the separation agreement it had reached with former CEO Michel Combes, who left the company after negotiating its sale to rival Nokia Networks.

Alcatel-Lucent’s officials said Sept. 11 that the company’s board of directors had decided to essentially cut in half the compensation package it originally had offered Combes. Instead of paying the ex-CEO $15.7 million over three years, the company now will pay him $7.9 million.

The decision comes after the original deal drew condemnation from French politicians and union leaders who said the money being given Combes was excessive, particularly in light of the high unemployment and stagnant economy in the country. Combes reportedly had initially refused to give up the bonuses, saying they were tied not to the Nokia deal but because of the job he did as Alcatel-Lucent’s CEO.

Combes left the CEO job Sept. 1, becoming chairman of French telecommunications vendor Numericable-SFR and chief operating officer at Altice, an investment arm of billionaire Patrick Drahi.

During his tenure with Alcatel-Lucent, Combes oversaw a restructuring effort he called the Shift Plan, a move to streamline the business and reduce costs by narrowing the company’s business focus, selling assets and cutting jobs. About 10,000 employees lost their jobs under the plan.

Nokia is buying Alcatel-Lucent for $16.6 billion, a move that will create a networking technology vendor that can compete with such top-tier companies as Ericsson, Cisco Systems and Huawei Technologies. Last year, Nokia and Alcatel-Lucent combined generated $27.5 billion in sales and $2.45 billion in profits, more than $5 billion in R&D and net cash of almost $7.9 billion.

Despite the deal, Alcatel-Lucent continues to roll out new products. The company Sept. 9 enhanced its Cloud DRV storage platform and unveiled its new Elastic content delivery network (CDN). With Cloud DVR, customers can store video content in the cloud rather than on a set-top box. The service now supports the open-source Ceph distributed object store and offers erasure coding to help increase storage space.

The company’s Velocix CDN allows service providers to enable video content delivery on any device, and its new Elastic CDN allows the providers to scale the use of resources in the cloud via virtual machines to meet rising or falling demand.