New Nortel CEO gets $1.2M base salary

Unless his former employer, Motorola, blocks him from taking his new job, Nortel Networks’ new president and chief executive officer, Mike Zafirovski, will be paid a base salary of $1.2 million (in U.S. dollars), the company revealed in filings with the U.S. Securities and Exchange Commission today.

Zafirovski’s annual bonus, depending on his performance, may fall between a “target” of 150% of his base salary (or $1.8 million) and a maximum potential amount of 300% of his base (or $3.6 million).

He will also receive a “new hire grant” of 5 million Nortel shares and $7.5 million in restricted stock (both of which will become vested in 20% annual installments over five years) and an additional long-term incentive award worth between two and four times his base salary.

Zafirovski has agreed to become Nortel’s CEO on Nov. 15. But Motorola, Zafirovski’s employer until January, is seeking a legal injunction barring Zafirovski from taking the job, claiming he will inevitably apply to the Nortel job the trade secrets he learned at Motorola.

As Motorola’s chief operating officer, Zafirovski earned a base salary of $900,000 in the 2003 fiscal year, with a $956,250 bonus and more than $4 million in long-term compensation for a total of nearly $6 million.

Bill Owens, who became Nortel’s CEO in late April 2004 after the termination of his predecessor, Frank Dunn, was paid a base salary of $681,818 for that year, along with $70,298 in “other compensation,” including $43,588 in moving expenses.

Dunn, who was terminated amid an accounting scandal, was paid a base salary of $868,750 for the year 2003 (his last full year), along with $225,000 in long-term payouts and $26,145 in other compensation.