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Alcatel CEO Forgoes Stock Options, Renews ‘Normality’ Pledge

Feb. 14 (Bloomberg) -- Alcatel-Lucent Chief Executive Officer Ben Verwaayen waived any stock options and performance-linked shares this year after France’s largest phone-equipment maker didn’t meet all of its financial targets.

Asked in an interview today about Alcatel-Lucent’s next objective, Verwaayen said: “By the end of 2012, if we have normality, I will think again about finding another word.”

Last year marked the end of the CEO’s three-year strategy to return the Paris-based company to a profit and free cash flow. While Alcatel reported its first annual net income in six years, it pushed back to 2012 its goal of generating positive cash flow.

Verwaayen, 60, asked the board of directors not to grant him any stock options or performance-related shares, while his fixed salary of 1.2 million euros ($1.6 million) will remain unchanged this year, Alcatel-Lucent said in a statement published on its website.

The former BT Group Plc CEO, who has warned that visibility was limited on the gear market in 2012, vowed to increase adjusted operating margin this year.

“In a year, the reality of life is that not every quarter will be great,” Verwaayen said in his office in Paris. “In a normal company, if there is a bump up or down, the market doesn’t react. At a company like Alcatel-Lucent, it reacts very very strongly, up or down.”

Alcatel’s shares jumped 12 percent on Feb. 10, the day the company announced its full-year results and said it plans to license its trove of 29,000 patents to generate cash.

“I would love to build a confidence with the financial markets so that they look much more to the trend, rather than to an individual bump or product here and there,” Verwaayen said. “The trend is certainly that we are in the right direction.”

To contact the reporter on this story: Marie Mawad in Paris at mmawad1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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