John Roth (businessman) - Career at Nortel

Career At Nortel

Roth joined Northern Telecom in 1969 as a design engineer.

Between 1993-1995, Roth served as president of Nortel's North American operations. He was named Northern Telecom Limited's CEO in 1995 and was elected to the board of directors in 1996. In February 1997, he was named president of the corporation, in addition to continuing to serve as CEO. In October 1997, Roth became president and CEO of the company which became known as Nortel Networks.

Under Roth's control Nortel became the leading engine of Canada's 1990s high-tech boom. Nortel became the most important stock traded on the Toronto Stock Exchange and became one of Canada's leading employers. Roth used his success and high popularity to lobby the government for tax cuts, but he did not support Clive Allen's statement to threaten to move Nortel to the United States if taxes were not lowered.

Network World, on January 4, 1999, referred to Roth as one of the 25 most powerful people in networking, a “man of boldness and vision, one who would rather strike than be stricken.“

Forbes Magazine, on December 13, 2000, referred to Roth as having "engineered some 16 acquisitions while putting the pedal to the metal internally to transform Nortel from a simple telecom equipment provider into a global brand name identified with the Internet."

"We were a slow company and we had to work very hard to become a fast one," says Roth, who began his tenure as CEO with a letter to employees in which he told them the time had come for the century-old company to "get off its duff" and join the new economy.

Time Europe, on December 25, 2000, noted that "The change marked the triumph of ideas forcefully argued by the most successful businessman in modern Canadian history: Nortel Networks CEO John Roth, 58. Mr. Roth warned that 'the country (Canada) risked becoming a second-rank economic power unless it changed its wealth-crimping tax policies and supported high-tech winners (like Nortel)". Roth urged the government of Canada to provide "better tax treatment of stock options", saying, "Policies and business strategies that worked well in the industrial era are a recipe for stagnation and decline in the new economy." Roth invested heavily in optical technology which was seen as the key infrastructure technology for the new network.

When Nortel’s share price on the Toronto Stock Exchange began a plunge that wiped out the life savings of many investors, Roth argued that Nortel's dominance reflected a failed industrial policy that sheltered enterprises from global competition. "We desperately need to create a culture of winners," he declared.

With the collapse of the Internet Bubble Nortel stock price collapsed. Market capitalization of Nortel Networks declined from $398 billion to less than $5 billion, and more than 60,000 people were laid off by the company. Roth was criticized after it was revealed that he cashed in his own stock options for a personal gain of $135 million in 2000 alone. Unable to sustain the debt load incurred during Roth's tenure, Nortel filed for bankruptcy protection in 2009 and then sought to cease operations, selling off all of its business units. Roth filed a U.S. creditor claim seeking a $1 billion U.S. indemnification from Nortel of his personal assets with respect to a series of class action lawsuits filed by former employees.