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Ebbers May Lose Golden Parachute

WorldCom's board of directors reportedly may revise ex-CEO's severance package.
Former WorldCom CEO Bernard Ebbers may get his golden parachute clipped off. The besieged telco's board of directors reportedly met Tuesday to consider revising the terms of his severance package.

Ebbers, who left the company five months ago amid the biggest bankruptcy scandal in U.S. history, received a sweet repayment deal on a $408 million loan made to him by the company, a $1.5 million annual payment, and lifetime use of a company jet, according to a report in The Wall Street Journal.

But now, says the paper, a court-appointed investigator is examining whether the loan might have been approved by an executive who got use of a company jet in return. Proof of such an agreement could give federal investigators a good starting place to begin prosecuting Ebbers.

As a consequence, WorldCom's board could revise the terms of the loan, requiring immediate payment. In the event he is unable to pay, creditors could seize Ebbers' assets, which include a 500,000-acre ranch, a yacht-building business, and major timber holdings.

Ebbers' successor as CEO, John Sidgmore, was also expected to use the board meeting to present members with a plan to find his successor. Sidgmore has come under increasing criticism since he took the post in April; his critics include creditors and several board members.

"I think he has doubts as to whether he can credibly lead the company," Gartner analyst Steve Koppman says. "But then, I don't think anybody can credibly lead the company. ... It's kind of like deciding who should be chancellor of Germany in May 1945." Koppman believes the next CEO of WorldCom will likely preside over its dismantling, as the company is sold off in two or three pieces.