John Roth

John Roth, is the former CEO of Nortel. He was born in Alberta, Canada, in 1942. He was named Northern Telecom Limited's chief operating officer 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 chief operating officer. In October, 1997, Roth became president and chief executive officer of the company which soon changed its name to Nortel Networks.

Success

Under Roth's control Nortel soon 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 labour the government for tax-cuts, sometimes threatening to move Nortel to the United States if taxes were not lowered.


Forbes Magazine of 13 December 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.

As Nortel’s share price on the Toronto Stock Exchange began a plunge that wiped out the life savings of many investors, Mr. Roth used the roller-coaster ride to argue 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.

Time Europe of December 25, 2000, noted that "The change (in Canadian government policies) 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)'. Mr. Roth urged the government of Canada for '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.

Failure

With the collapse of the Internet Bubble Nortel stock price collapsed. Nortel had been transformed into a large optical company to supply a market that never existed. Market capitalization of Nortel Networks declined from 398 billion dollars to less than five billion, and more than 60,000 people were laid off by the company. Roth was criticized as he cashed in his stock options for a personal gain of more than one hundred million dollars. He is currently living in retirement.

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