PARIS (Reuters) - Alcatel-Lucent
PARIS (Reuters) - Alcatel-Lucent
The appointment of Verwaayen as chief executive, coupled with the hiring of French business grandee Philippe Camus as non-executive chairman, comes a month after investors forced the current managers out following a series of profit warnings.
The world's biggest provider of fixed-line telecoms networks, which has been losing market share amid a tough market and fierce competition from key rivals such as Ericsson
The company said Camus, 60, a senior partner at French media group Lagardere
Camus will keep his position at Lagardere, the company said.
Investors have been pushing hard for many months to get rid of Russo and Tchuruk and the stock has regained 30 percent since their departures were announced. But it remains 60 percent below its December 2006 level.
By 6:32 a.m. EDT the shares were down 1.9 percent at 4.225 euros, off an earlier low of 4.06 euros and giving the company a market capitalization of around 10 billion euros ($14.5 billion), as some investors pocketed their profits.
"The appointment comes quicker than the market had expected. The stock has recently been rising on hopes of a new management team capable of a turnaround. Now that the announcement has been made, there is no more (price) catalyst," one trader said.
"The board reacted swiftly. They found a CEO who has a good international experience and in the telecoms sector," said Exane BNP Paribas analyst Alexander Peterc.
"Camus will be a truly non-executive chairman, so conflicts seen in the past are more unlikely to repeat themselves," he added.
Camus, a French national and now a U.S. resident as a partner at New York investment firm Evercore Partners
The complexity of the controversial transatlantic merger deal, a clash of corporate cultures and dire market conditions were partly to blame for Alcatel-Lucent's woes, analysts have said.
Alcatel-Lucent also took too long to select its combined technology portfolio, spooking customers, while management, which lost key people after the merger, struggled to remain focused, they say.
Verwaayen, a Dutch national, has extensive experience in the telecoms industry and the problems at Alcatel-Lucent will be familiar to him.
"I'm truly delighted to become the CEO of Alcatel-Lucent, leading a company with vast assets and great talents, while recognizing the difficulties and challenges ahead," Verwaayen said in a statement.
"I am committed to building significant and sustainable value for our shareholders, customers and employees," he added.
During a brief conference call Verwaayen gave no clues on future strategy other than to say that one of the industry's problems was that "there are too many platforms." He also said job cuts were "never a goal in itself."
His predecessor Russo had promised shareholders she would learn to speak French, but she did not have time to master the language.
Verwaayen's office will be in the company's headquarters in Paris. Asked about his French, he said he spoke well enough to buy bread when holidaying in Provence, where he has a house.
While Russo will leave with a pay-off of up to 6 million euros, Verwaayen will have no golden parachute.
He will receive a fixed remuneration of 1.2 million euros plus a targeted bonus of 1.8 million euros, options and free shares tied to to performance criteria, documents available on Alcatel-Lucent Web site showed.
Verwaayen joined BT in 2002 as the former British fixed line monopoly emerged from a massive restructuring process and deep cost cuts.
During his time he helped avoid a break-up of the group at the hands of regulators and then spearheaded the drive into networked IT services and broadband which helped to double the group's share price between 2004 and 2007.
Prior to that he spent four years at Lucent Technologies and before that he was at Dutch telecoms operator KPN when it was still both a post and telecoms group. He also worked at ITT, a predecessor of Alcatel.
(Additional reporting by Blaise Robinson and Cyril Altmeyer in Paris, Kate Holton in London; Editing by Greg Mahlich, Tim Hepher)
Copyright 2008 Reuters