THE NORTEL CURSE

Frank Dunn isn’t the first former CEO to end up disgraced.

KARIN MARLEY May 10 2004

THE NORTEL CURSE

Frank Dunn isn’t the first former CEO to end up disgraced.

KARIN MARLEY May 10 2004

THE NORTEL CURSE

Frank Dunn isn’t the first former CEO to end up disgraced.

KARIN MARLEY

PAUL STERN

REIGN: 1989-1993

RISE: A brash American careerist, Stern pushed the company beyond Canada’s borders, forging deals from Turkey to FALL: He forgot about those at home. After his aggressive style, neglect of R&D and massive layoffs led to a revolt by clients and employees alike, Stern “retired,” leaving the company balance sheet in chaos.

Brazil in a largely successful attempt to turn it into a global telecom leader.

JEAN MONTY

REIGN: 1993-1997

RISE: The former president of Bell Canada put the company back on track, taking it from $1 billion in losses to $1.2 billion in profits. As a reward he was named chief of parent BCE, where he garnered further praise by astutely timing the sale of BCE’s Nortel stake at near stock peak.

FALL: A convergence enthusiast, he used that cash to build an ill-fated multimedia empire. Most notoriously, he plowed $6.4 billion into Teleglobe; two years later, BCE sold it for US$155 million.

JOHN ROTH

REIGN: 1997-2001

RISE: An engineer who rose through the ranks, Roth pointed Nortel toward the Internet, catching the tech wave that saw the stock surge from $18 to $124.50 in three years. For this, he became widely touted as Canada’s top strategist.

FALL: Alas, the money vanished as quickly as it came. Nortel lost $300 billion in value during the dot-com crash. Firms it bought for US$20 billion were sold for just US$167 million. Worse, investors couldn’t abide the fact that Roth cashed in $135 million worth of options before the stock dropped. He was quietly pushed out.