Alcatel-Lucent CEO to gain €14m from Nokia merger

With the pending merger of Alcatel-Lucent and Nokia, the CEO of the French company has come under fire by local governing bodies after it was revealed he is set to pocket €14 million when the deal is finalised.

Michel Combes, CEO of French telecommunications equipment manufacturer, Alcatel-Lucent, has been called upon by the French government and unions to renounce reported bonuses in the vicinity of €14 million.

The French-based company only has a few months left before it ceases trading as Alcatel-Lucent and instead takes on its new moniker, Nokia Corporation. Both Alcatel-Lucent and Finnish communications giant Nokia entered into a memorandum of understanding (MOU) earlier this year in a €15.6 billion deal that will see both companies merge by early 2016.

Combes, who has headed the French-American company since 2013, will allegedly step down once the merger goes ahead.

On Sunday, French newspaper Le Journal du Dimanche, citing official documents and current share values, said Combes could receive almost €14 million in bonuses over three years.

"It is quite rightly causing controversy," the spokesman for the Socialist government, Stephane Le Foll, told reporters.

"[The size of any such bonus] is always political at a time when we are emerging from what is a difficult crisis for a lot of French people".

He called on Combes to reflect on the bonus.

Alcatel-Lucent defended Combes saying he has multiplied by six times the value of the company, and saved it from bankruptcy.

It said the amount he is due to receive is not linked to his departure and that the share payout is due to the success of the firm's tie-up with Nokia.

Since his arrival, Combes has overseen a recovery plan that has tripled its share value but led to the loss of 10,000 jobs.

The CFE-CGC union said he "should have the grace to renounce most of the bonuses" as he had instituted a "recovery plan of unprecedented violence".

Last month, the European Commission gave the proposed merger the green light, reporting it had found no cause for concern with the deal going ahead, citing the limited overlap between the two company's product sets and markets.

In June, the US Justice Department gave the amalgamation a nod, with Nokia confirming the merger has also been cleared by antitrust authorities in Albania, Brazil, Canada, Colombia, Russia, and Serbia.

"Both companies will continue to cooperate with the remaining authorities to close their reviews as quickly as possible," Nokia said.

"The merger still remains subject to approval by Nokia shareholders, Nokia holding over 50 percent of the share capital of Alcatel-Lucent on a fully diluted basis upon completion of the public exchange offer, receipt of other regulatory approvals and other customary conditions."

Dubbed the company's last deal before the merger, Alcatel-Lucent signed two separate agreements in July with China Mobile and China Unicom, that will see networking upgrades for the telecommunications providers at a combined cost of 8.12 billion yuan.

Nokia also announced last week it had signed an MOU with Chinese investment firm, China Hauxin. Under the MOU, Nokia will hold 50 percent plus one share of a joint venture that combines Nokia's infrastructure businesses in China and Alcatel-Lucent Shanghai Bell.

Nokia and Huaxin intend to use the proposed joint venture to speed up regulatory approval of the merger in China.

"With this MOU now in place, we will also work closely with our new partners to make the case for swift approval of the proposed combination between Nokia and Alcatel-Lucent by the appropriate Chinese authorities," Nokia chief and president Rajeev Suri said.

With AAP


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