November 11, 2002, 8:54 AM — Hewlett-Packard Co. President Michael Capellas tops the wish list of WorldCom Inc.'s search committee to succeed John Sidgmore as chief executive officer (CEO) of the bankrupt telecommunication company, The Wall Street Journal reported in its online edition on Monday.
WorldCom's board has already informally signed off on picking Capellas for the job and representatives from WorldCom's creditors on the search committee also back the selection, according to the article, which cites a person close to the situation.
However, no final decision has been made. Three other executives are still being considered and an appointment is at least a few days and maybe a week away, according to the article.
Sidgmore, in an interview with The New York Times published Monday, says the search for his replacement has come down to two candidates. An announcement should come by the end of the month, Sidgmore told The New York Times.
The nomination of Capellas "is speculation at this point," said Rachel Richards, a WorldCom spokeswoman in Europe, adding that Sidgmore has said that many of the names mentioned in the media are not actually on the search committee's list.
No one at HP could immediately be reached for comment.
Capellas became president of HP after selling Compaq Computer Corp., of which he was chairman and chief executive officer, to HP of Palo Alto, California. The sale of Compaq to HP was completed in May after Capellas and HP Chairman and CEO Carly Fiorina prevailed in an exceptional public relations battle and persuaded shareholders to approve the deal.
WorldCom in April appointed Sidgmore president and CEO after the resignation of Bernard Ebbers, who built the second-largest long distance telecommunication company in the U.S. from a series of acquisitions, but left as questions emerged over the financial viability of the company. Sidgmore plans to return to his previous role as WorldCom vice chairman.
Two months after Ebbers' departure, WorldCom announced it had discovered accounting irregularities and would restate its earnings for 2001 and the first quarter of 2002 by US$3.8 billion.
WorldCom's woes have since grown worse. In August, the Clinton, Mississippi, carrier said it had discovered an additional $3.8 billion in errors and would restate earnings for 2000. Last week, WorldCom disclosed its earnings restatement could top $9 billion. The company filed for Chapter 11 bankruptcy protection in July and faces fraud charges brought by the U.S. Securities and Exchange Commission (SEC), several shareholder lawsuits and Congressional investigations.