Outgoing Alcatel-Lucent (NYSE: ALU) CEO Michel Combes will receive around $14.6 million (€13 million) in stock over three years, but the vendor insisted that the compensation is not a bonus tied to him leaving the company amid Nokia's (NYSE:NOKIA) pending $17.5 billion takeover of Alcatel-Lucent.
Combes, who is set to leave his post tomorrow, is getting the payment based on performance targets and a non-compete clause, and the payments will be made from 2016 to 2018, according to company documents cited by Bloomberg.
Combes' payment is not linked to his leaving the company, an Alcatel-Lucent spokeswoman told Bloomberg after French newspaper Journal du Dimanche reported Combes was getting a payout topping $14.6 million. The spokeswoman said he is being paid as part of a long-term incentive plan, and that some conditions of the compensation package have been recently modified to reflect the takeover by Nokia.
Combes said earlier this year he wouldn't cash a "termination benefit" of as much as $2.7 million tied to the Nokia deal, Bloomberg notes.
French Finance Minister Michel Sapin criticized the payout Combes is set to receive. Speaking on France Info radio Monday, Sapin said executive pay should be governed by "common sense and restraint." The compensation package for Combes "didn't show that." Sapin said he won't change the law to address the issue, according to Bloomberg.
Combes will reportedly become chairman of French telco Numericable-SFR and COO at Altice, the holding company of billionaire telecommunications tycoon Patrick Drahi, which controls Numericable-SFR.
Effective Sept. 1, and for the duration of the transition period, Philippe Camus, who is currently chairman of Alcatel-Lucent's board, will become the interim CEO. The firm said that COO Philippe Guillemot will be in charge of leading the operational management of the group, and CFO Jean Raby, who will be responsible for completing the proposed transaction with Nokia, said he will be "departing the group presumably" once the deal closes, which is expected to happen in the first half of 2016.
Combes, a former CEO of Vodafone Europe, took over as CEO of Alcatel-Lucent in April 2013 after the company charged him with returning the company to consistent profitability after the tumultuous tenure of Ben Verwaayen.
Alcatel-Lucent has been nursing itself back to financial health after years of losses following the 2006 merger that brought together Alcatel of France and Lucent Technologies of the United States. Under Combes, the company has undertaken a massive cost-cutting effort called the "Shift Plan." The goal of the program has been to return the company to positive cash flow in 2015. Under the program, Alcatel-Lucent has focused on IP networking, broadband access, LTE and small cells, as well massive cutting of fixed costs and around 10,000 jobs.
- see this Bloomberg article
- see this TelecomPaper article
- see this ZDNet article
Nokia plans new China JV following Alca-Lu merger
Nokia moves closer to Alcatel-Lucent acquisition with key SEC filing
Alcatel-Lucent CEO Combes to step down Sept. 1
Nokia CEO: ALU acquisition will make it 'very strong' in North America
Report: Alcatel-Lucent CEO Combes to depart for Altice in July