Nortel looking to recover ‘bad bonuses’

Canadian equipment manufacturer Nortel Networks has said that it plans to review the bonuses it paid to senior managers in 2002 and 2003, before attempting to recover any sums paid to individuals who acted ‘improperly’. The company, which is currently under investigation for accounting irregularities, is due to restate its financials for 2001, 2002 and 2003 later on this year. A recent article in the Wall Street Journal claimed that Nortel falsely boosted earnings by subsidising its balance sheet with monies set aside as ‘accrued liabilities’. In 2002 it introduced a Return to Profitability incentive plan in a bid to stem heavy losses, under which employees were paid an estimated USD300 million.