Pressure mounting on Alcatel-Lucent CEO Russo

14 Sep 2007

The chief executive officer of Alcatel-Lucent, Patricia Russo, is coming under increasing pressure from French board members to improve her management team, after the equipment manufacturer yesterday issued its third profit warning of the year. The UK newspaper The Financial Times understands that high ranking officials at the Paris-based headquarters of the Franco-American company have become dissatisfied with their CEO’s absence as she splits her working time between France and the US. An unnamed source is quoted as saying that while no moves are afoot to oust Ms Russo, pressure is growing on her to reorganise her priorities. ‘If you are chief executive, your place is in the headquarters and the headquarters are in Paris,’ he said. The paper says that Serge Tchuruk, the French non-executive chairman and former boss of Alcatel, is also understood to have made his views known to Ms Russo.

For her part, Russo has defended her actions saying it was ‘crucially important’ for her to spend time with her customers. However, the bad feeling within the company will only dent investor confidence. Shareholders have seen the company’s share price tumbling to their lowest level since the USD11 billion merger was launched nine months ago. The news is a blow to Russo following Alcatel-Lucent’s recovery in second-half sales, despite disappointing interim profit announcements.

France, Alcatel-Lucent