Management Turnover as Change Agent

Monday, May 19, 2008

CEO Watch - Alcatel-Lucent, Patricia Russo, Update 4

Is there more bad news for Patricia Russo, CEO of Alcatel-Lucent?  For months now I have been writing about Russo as one of the top CEOs at risk for their position.  Carol Matiack wrote a piece in Business Week that focused on a proposed rule change to be voted on by shareholders, 
at their annual meeting on May 30, shareholders of the world's largest telecommunication equipment maker will vote on a resolution that would allow the board to remove the CEO or chairman by a simple majority vote, instead of two-thirds as currently required.
Matiack went on to write,
... Against that backdrop, the proposed bylaws change looks ominous for Russo. Alcatel-Lucent said in a statement that the existing two-thirds majority rule, put in place at the time of the merger, was intended as a temporary measure "to enhance the stability of the senior management during the inevitably difficult transition period." But the provision was to have stayed in place for three years—and now the board likely will jettison it after only 18 months.
We will just have to wait and see what happens with the vote and whether it will ultimately result in Russo's undoing.

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