WorldCom Inc. on Friday named Michael Capellas chairman and chief executive officer (CEO), ending a week of speculation about the appointment of the former Hewlett-Packard Co. president as the head of the telecommunications company.
Capellas resigned his post as president of HP earlier this week, on the same day that The Wall Street Journal wrote that the former Compaq chairman and CEO was the top candidate to lead WorldCom. [Please see Michael Capellas bids farewell to HP.] Compaq was acquired by HP earlier this year.
WorldCom, which filed for Chapter 11 bankruptcy protection in July, is mired in a US$9 billion accounting scandal, the largest in U.S. history. The Clinton, Miss., carrier faces fraud charges brought by the U.S. Securities and Exchange Commission, several shareholder lawsuits and Congressional investigations.
Capellas is convinced that WorldCom has the assets, the customers and the people to regain a leadership role in this industry, he said in a statement issued by WorldCom.
“Today we are launching a new company, one that will reclaim the strengths of its past and focus on a promising future,” Capellas said in the statement.
To achieve that goal, WorldCom will have to regain trust and win respect by rebuilding the company into one with good corporate governance and management integrity, he said.
In September, WorldCom started looking for a new CEO to replace John Sidgmore, who took over the role in April after Bernard Ebbers’ abrupt departure.
Sidgmore was previously vice-chairman and said he would fall back into that role when a replacement was found. Sidgmore led the CEO search.
The terms of Capellas’ compensation are subject to court approval, which WorldCom expects to seek as early as today, it said.