Capellas: Out of a job on Tuesday, back in work by Friday

NEWS Troubled telco WorldCom today announced that former HP president Michael Capellas is to be its new chairman and CEO, as predicted by silicon.com earlier this week. Capellas resigned from HP on Tuesday, having previously acted as chairman and CEO of Compaq before the merger. WorldCom has been plagued by controversy of late and is far from out of the woods but Capellas - who pocketed $30m when he left HP - is undaunted. In a statement, he said: "I took this job because I am convinced that WorldCom has the assets, the customers and the people to regain a leadership role in this industry. In order to do this, we must first regain trust and win respect. Accordingly, together we will rebuild WorldCom into a model of good corporate governance and management integrity." He added in a conference call: "I have known this company for decades. I've bought from them and sold to them. This is a pretty jazzed group of people [but they need to] be re-energised again." Capellas said he was encouraged by the company's 'stabilised' financial position, including more than $1.4bn in cash, as well as the steps that current management has taken to ensure the improper conduct that occurred in the past cannot happen at the company in the future. Departing WorldCom CEO John Sidgmore - who was himself under investigation for his role in the accounting scandal which saw the company misreport its results by around $4bn - led the search for a new boss, and said Capellas was the "absolute top choice". "Michael Capellas is an executive of great accomplishment, integrity and talent, who brings both seasoned experience and a fresh perspective," Sidgmore said. "His acceptance of our offer confirms our optimism about the future of our company. We are very excited about the opportunities his leadership will bring. We are confident that he will be able to capitalise on its strengths and maximize its growth." Capellas added that, even given the sale of Compaq to HP under his stewardship, there is no intention of breaking up and selling WorldCom units. He said that among his first tasks will be to establish an advisory board made up of CIOs from top accounts. Asked whether he was unhappy being the number two at HP, he said: "No one can say that once they've been a CEO they don't want to be a CEO again. [But] Carly and I had a great relationship." The terms of Capellas' remuneration are subject to court approval, which the company expects to seek as early as today.