Bozotti’s Bonus

The Shareholder Spring does not seem to have drifted down to the Club Med countries.

Here's a company whose revenues, according to ICInsights, dropped 21% between Q1 this year and Q1 last year in a flat market, whose share price has halved in the last twelve months and whose revenue run-rate is back to where it was seven years ago when the CEO took over.

 

And what happens? The CEO gets a $1.5 million bonus.

 

You'd have to laugh if it weren't that this is a company propped up every year by the injection of several hundred million of the taxpayers' Euros.

 

And who is the CEO with the chutzpah to accept a $1.5 million bonus after such a performance?

 

None other than Carlo Bozotti CEO of STMicroelectronics.

 

According to Bloomberg Businessweek, Bozotti got total cash remuneration for 2011 of  $3.9 million made up of $1 million in salary, $1.5 million in bonus and $1.4 million in 'other compensation'.

 

Can this be shrugged off in the Gallic manner?

 

Or should shareholders ask Bozotti how he justifies hanging onto a $1.5 million bonus after such a bad year?

Comments

31 comments

  1. on page 100 of the annual report you read:
    33.331 stock awards for 2008
    100.000 stock award for 2009,2010, 2011 !!!
    Signed by Supervisor Board & Compensation Committee.
    The Supervisor Board (11 people) has a compensation of 1.178.375 euro per year !!
    They all are working in their own interest , not for STM Company growth

  2. Yes, Bitter, the ‘Bozo Bonus’, coming after such a bad year for ST, must make many wonder: Is Bozo working for the benefit of ST? Or is ST working for the benefit of Bozo?

  3. Bozo must have reached the conclusion, after looking at the figures presented to him, that its probably best for STM & STE to let go and let adequate people take over.
    But being a sucker and a tasteless crook, he probably can’t handle the loss in prestige and miss out the opportunities of looting, just like all the rest of his crony appointees in the shoddy “management team”.

  4. He was the wrong choice, [Anonymous], he lacked the experience, the business flair and the self-confidence needed for the job. Everyone knows it would be best for ST if he went.

  5. Bozotti has no Vision to lead ST; He is the worst performing CEO on the earth. The game must be over for him soon. I’m still waiting for the stock
    price to goes up even a little so I can sell fast.

  6. I think you talked about Cuomo, he is still at ST
    but he is the Chairman Of the Board of 3Sun
    Solar, so maybe he is tryng to get out “if he’s
    smart”.

  7. Well anomymous … one of those 5 is still there :-)

  8. Well anomymous … one of those 5 is still there :-)

  9. Now there’s an idea [Anonymous]

  10. And a week on Thursday, [Anonymous] at the ST AGM in Amsterdam the shareholders will be asked to approve Bozo’s ‘special bonus’ to encourage him to ‘increase his efforts’ plus to approve a grant of shares to him. You couldn’t make it up.

  11. Tomorrow is the ST annual analyst day in NY. Let hope the Analysis will ask the right questions to ST’s CEO, and his Executive VP’s. You should be there David. They are just focus to make more money for themselves; they don’t care about developing good products to sustain the company.

  12. French and Italian states should kick out current Board, replacing them by the guy that led ST to success: Pistorio, Romano, Cuomo, Bosson, Somogy

  13. Good for you, Anonymous2, let’s hope the other shareholders follow your example.

  14. As a shareholder (& ex-employee), I have voted against the “special bonus of our President and CEO” and “the stock-based portion of the compensation of our President and CEO”. I hope my fellow shareholders have done the same, including the government owned organisations in Italy & France with still a considerable shareholding.

  15. Bozotti is paid in Geneva, Switzerland. ST’s HQ!

  16. That’s nothing compared to what the CEO of Atmel, Laub is paid. He has presided over a company with falling revenues, loss of market share in the Touch market and an almost halving of the stock price since the high.someone told me his compensation for this abject failetmismwell north of $10M. So ST are clearly getting value for money with Bozotti compared to Laub. Let’s hope the major shareholders of Atmel kick Laubs package into touch, as should the shareholders of ST with regard to Bozottis overpayment for failure.

  17. That’s interesting, Robert, because I’ve often wondered if the excessively cautious and finance-driven strategy of ST was an attempt to keep it out of the hands of private equity. After all, Bozo et al took over in 2005 and the PE takeovers of NXP and Freescale happened in 2006. There must have been a feeling in the semi industry that the PE people were stalking them. Of course the credit crunch of 2008 put an end to cheap money and the end of big PE deals but, by that time, ST was firmly set in its cost-driven, risk-averse strategy. Either that was the reason or, what’s worse, the strategy was deliberately targeted to make ST lok attractive to PE so the management could have an even bigger pay day.

  18. I wonder if it is premature to contemplate how STM gets broken-up
    TI would be an obvious buyer, only I doubt they are stupid enough to step in **it.
    Intel certainly has the cash to take on this lost cause, but why would they want to own a mess?
    Maybe the Taiwanese, I for one would love to be in the room when Ming Kai Tsai asked Carlo to justify his bonuses (maybe you could fund Carlo’s retirement by selling tickets to that event)
    I suspect that in the end we will see a pan Euro/Japan conglomerate formed NEC/STM/……
    OR dare I say it, another round of PE investments in the semi industry (psychologist believe it takes about 10 years for a corporate lesson to be unlearned) so when was it that KKR bought NXP?

  19. The STM cronies and disciples probably have a blast reading these cute comments. Perhaps STM ends like the Swedish Saab bankrupcy; stage a farce to cover up the theft and prolong the inevitable for as long as possible. I wonder, though, how will the STM looting look like, maybe the insane Bozo bonus is a hint of what more to expect before it is irrecoverably run to the ground?

  20. You’re right, Terry, it’s comical. It shows how these top guys inhabit an ivory tower, lose touch with the real world and become figures of fun.

  21. The bonus is great news for the employees and great value for the taxpayer. It is to safeguard the business by preventing the CEO from looking for another job during difficult times. As usual, life imitates Dilbert.

  22. David, The bonus that Bozotti got is for the 2011 year. 2011 was extremely poor for ST even before the dramatic situation of Q1 2012. For 2011 Bozotti and his Executive Committee should had cancel the “Not deserve bonus”. Shame on them, but the most responsible are the Fat Cats ST Board that has not put a stop to this. They are bunches of Old Gang that got Big Pay for doing nothing.

  23. Bozottis renowned intelligence and experience clearly works in his favour when it comes to his personal profiteering.
    When the cute idealists cry foul, Bozo cashes in.

  24. I guess they also got the cream [Anonymous]

  25. Oh Yes the mind boggles

  26. Great point! David, what about the fat cats that sitting on the Board?

  27. for $1.4m there must be a lot of ‘deserts’ with those lunches :-)

  28. Lunch, Mike

  29. Isn’t Hollande (who else chooses a president named after one of their greatest enemies ?) going to slap a 100% tax on him at the top end though ?
    One also wonders what the French count as ‘other compensation’ :-)

  30. I hope you didn’t get wet, mgp-1.

  31. Don’t be too harsh David. At the recent GSA event, Carlo shared with us his dream …

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