I bought a bunch of Lucent stock about a year ago when it was trading at a buck and small change.... I used the following logic: it had a price/sales ratio of .25 at the time, it still had plenty of room to cut costs given the wildly excessive executive comp packages being doled out, lucent is probably one of three equipment vendors gauranteed to make it through the slump because of the global reach and penetration, and then finally, I made my decision using the Benjamin Graham-esque-"it can only go down another 1.30...what are the chances?"-logic upon which i base most of my decisions.
Anyhow, here we are a year or so later, and lucent has finally turned a quarterly profit. On several billion in revenue, they were finally able to figure out how to MAKE money with that much coming in the front door. Goody goody. Then, however, tragedy struck. Lucent announced that they were going to give Patricia Russo, their lucent-lifer, hair-sprayed-so-thick-it-wont-budge, jerkstore CEO a massive bonus because they turned a profit last quarter. I wonder if everybody throughout the company will get these. Patty, I think you suck as a CEO. you NEVER got cost-cutting religion, never. Yes, you made some headcount cuts, some deep. So what. You were still paying yourself (let's not play games and say 'the board decides my salary') over $2million in a year in direct comp while the company was losing money hand over fist, and it took you about a year to rework your debt structure when you should have banged that out 2 quarters earlier. I think if you're gonna pay yourself over 3 million when you turn a profit, then you should have to contribute a million dollars to the company and take no salary for every quarter you're in the red. I don't have ANY problem with you firing all the people you let go, but i have a big problem with the "i get paid a lot when we do poorly, and then a lot MORE, as a reward for performance, when we do well!" You suck. I also hate that the entire management team has never really worked anywhere besides lucent. I gaurantee you that accounts for about a half a billion a year in unnecessary costs. Gaurantee it. Would love to see what a fresh pair of bright eyes had to say if they were ever allowed into the ivory tower.
ps, in similar news, how i LOVED to see condit leave boeing under a cloud the same week that the NYT showed him travelling in extreme luxury on the boeing executive jet....yeah, i bet your shareholders are getting every penny's worth of that cool leather chair you get to sit in on that plane along with the rest of the multi-million dollar accessories. You wouldn't have gotten NEARLY as much work done on the flight if the jet had been cheaply decked out for less than 2 million dollars. Not that the next guy will make such changes...but anyway, at least you're out, see ya.
Posted by Dick at December 5, 2003 11:28 AM | TrackBack