There may be good reasons why Nortel Networks Corp. is handing out salary hikes and bonuses (yet again) this year, but it will be hard pressed to justify it to former employees fighting for severance packages or pensions.
This is, after all, a once-great company now in bankruptcy protection with a multi-billion-dollar pension deficit that proposes to leave thousands of workers high and dry.
These folks quite rightly want to know why executives get extra when they can't even get the money they are owed.
The reason, according to Nortel? Raises and bonuses are needed to retain executives.
As a result, the company is spending another $7.5 million to keep 72 of them extra happy. At least 14 will earn more than a half a million dollars this year.
It's part of a pattern across the business landscape that is increasingly baffling -- not to mention infuriating -- to the lowly worker.
For reasons only accountants and executives themselves seem to understand, outrageous incomes seem to have become the price of doing business (or bankruptcy) in recent decades. Former Nortel head John Roth, for example, hauled in $133 million in 2000 alone.
And now, his former employer can't even do what's right for the bulk of its workers, who have made their feelings known at huge rallies on Parliament Hill.
Federal Finance Minister Jim Flaherty has heard the racket. Correctly fearing this might be a big issue in the next election, he recently proposed changes to tax laws to better protect pension plans and prevent underfunding.
Unfortunately, the proposals have already been criticized by pension experts for not going far enough. The New Democrats are proposing the "Nortel Bill" (C-476) that would put workers' pensions ahead of other creditors and executive bonuses. That has a certain attractive ring to it, but is beset with its own challenges. The Liberals, meanwhile, are drafting their own pension platform.
Alas, none of it is simple. This will indeed be an issue in the next election.
The party with a true and lasting fix to the current mess may well reap the biggest benefits.
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