Nortel Postmortem: John Roth’s Legacy

The National Post has been running a series of feature stories exploring the demise of Nortel (NRTLQ.PK). It will interesting to read Monday’s installment, which is focused on ex-CEO John Roth, who decided to depart Nortel in 2001 just before the telecom boom started to meltdown.

Roth retired to bucolic Caledon, Ont. with a $130-million (most of it from stock options that been steadily rewarded to him by Nortel’s generous board) where he has kept an extremely low profile.

One of the few interviews done with Roth was nabbed by The Street.com’s Scott Moritz, who somehow managed to get Roth to talk about why he decided to sell his last chunk in Nortel – 741.245 shares in August 2002 – for $744,260.

“When you sell something at C$1.55, it’s not a rational decision,” Roth said. “It was heartbreaking to watch this poor company go through a terrible spiral.”

While Roth has mostly avoided the spotlight while Nortel has plunged into a death spiral, there’s no doubt some of the strategic decisions made while he was CEO ultimately played a role in the company’s financial struggles.

Some of the multi-billion dollar acquisitions made under his watch, for example, were spectacular failures that Nortel ultimately left the company vulnerable as it failed to secure strong footholds in many of the growth markets.