Sign of Cross

Robert Annunziata, who lasted only a year as CEO, had a contract that the Corporate Library's Nell Minow once picked as the worst (from the point of view of shareholders) in the United States. Among other things, it included Annunziata's mother's first-class airfare to visit him once a month. It also included a signing bonus of 2 million shares of stock at $10 a share below market. Henry Schacht, a veteran industrialist now with E. M. Warburg, Pincus & Co., was brought in by Lucent, the successor of Western Electric, to help manage it through this crazy period. He recalled the atmosphere: “The telecom deregulation of 1996 was hugely important. It allowed competitive local exchange carriers to build their own capacities and sell in competition with each other and with the Baby Bells. These new telecoms went to companies like Global Crossing and had them install fiber networks for them so they could compete at the transport level with AT&T and MCI, particularly on overseas traffic... Everyone thought this was a new world, and it would never stop. [You had] competitive firms using free capital, and everyone thought the pie would expand infinitely ...»