For the past few months, I've been a little sympathetic about ex-Nortel CEO Frank Dunn and his senior management team - believing they did yeoman's work bringing the company back to health before they were fired in April for reasons that have not been disclosed yet.
In the background, however, was this troubling belief Dunn and his senior management team were also envious of the big financial rewards enjoyed by the previous management team led by ex-CEO John Roth. As most people know, Roth walked away with US$139-million in salary and stock options in 2001.
Roth then retired to his huge mansion in Caledon, Ont. to - among other things - take care of his large car collection. As it turns out, Dunn apparently did have a bad case of Roth-envy. As Tyler Hamilton in the Toronto Star reported earlier this week, Dunn is builiding a mansion in Oakville, Ont that could have a market value of up to $15-million. The first thought is: what was Dunn thinking? This is a man under the spotlight who couldn't resist the temptation to enjoy some rewards he apparently believed he deserved. The optics of building a large house look terrible.
Think about it: as Dunn was handing pink slips to 10s of thousands of Nortel employees, he was pushing ahead with his dream home on Lake Ontario. Not good, Frank, not good. If Frank was smart, he should have kept his construction plans on hold or perhaps renovated his existing home.
Clearly, Dunn saw what Roth enjoyed as Nortel CEO, and didn't think it was inappropriate to go for it. Ironically, Nortel ex-CFO Doug Beatty, who was also fired in April, still lives in a modest house in North Toronto. If anything, Dunn's real estate dreams suggest maybe the books were cooked at Nortel so senior executives could enjoy large financial rewards.