Nortel Networks Corp. awarded 16 executives restricted stock in February and allowed them to sell $12 million of it the same day, a month before saying the company might have to again restate financial results.
Executives Pascal Debon and Brian McFadden received the biggest bonuses, 372,500 restricted stock units each, half of which they sold for $1.19 million, according to a filing with the Securities and Exchange Commission. Restricted units usually must be held for a year or more before being sold.
Nortel, North America's largest maker of phone equipment, last month fired chief executive Frank Dunn and his chief financial officer and controller, and put four divisional finance chiefs on leave, after saying the second restatement might cut 2003 earnings in half. Nortel paid the bonuses amid a review by the audit committee of the first restatement in November.
Nortel shares closed yesterday at $3.26, down 31 cents, or 8.7 percent, on the New York Stock Exchange. The shares have declined 23 percent this year.
The filings didn't show an award for Dunn or Chief Financial Officer Douglas Beatty in the same time period. Tina Warren, a Nortel spokeswoman, couldn't immediately comment on whether they were eligible and had received the bonuses.
Warren said the company carried out the transactions on behalf of the executives. Nortel executives in the past have received part of their restricted stock compensation in cash, according to Warren.
"The manner in which this program is managed, publicly filed, and taxes declared is consistent with our competitors," Warren said. "Executives are in compliance with the regulations."
The bonuses were reported earlier by the Wall Street Journal.
Michael Gollogly, the controller who was fired, was one of two executives who received the smallest payment of 97,500 restricted units, half of which he sold the same day for $310,230. Other Nortel executives who received bonuses included divisional and regional chiefs.