WorldCom names former Compaq chief Capellas as new chief executive, chairman

NEW YORK (AP) _ The executive who stepped down earlier this week as Hewlett-Packard's president was named Friday as chairman and chief executive of WorldCom Inc., the telecommunications giant that

Friday, November 15th 2002, 12:00 am

By: News On 6

NEW YORK (AP) _ The executive who stepped down earlier this week as Hewlett-Packard's president was named Friday as chairman and chief executive of WorldCom Inc., the telecommunications giant that is mired in the biggest bankruptcy in U.S. history.

Michael Capellas takes over the top two jobs as WorldCom tries to overhaul its accounting, remake its corporate image and remain a strong competitor in the slumping telecommunications industry. The company admitted a $9 billion accounting fraud earlier this year.

``I see this as a great opportunity,'' Capellas said. ``I look forward to hitting the ground running.''

Capellas' selection had been widely rumored after he stepped down Monday as president of Hewlett-Packard, which bought Compaq Computer Corp. for $19 billion in May. He had been Compaq's chief executive before that deal went through.

Capellas replaces John Sidgmore as chief executive at WorldCom, the Mississippi-based telecommunications provider which sought bankruptcy protection in July. Bert C. Roberts had been chairman.

Sidgmore has been considered an interim replacement for WorldCom founder Bernard Ebbers, whose high-flying ways have made him one of the central characters in the telecom industry's bust.

Capellas said in a statement that he took this job because ``WorldCom has the assets, the customers and the people to regain a leadership role in this industry.'' The first goal for the company, he said, is to ``regain trust and win respect.''

WorldCom is the parent company of MCI, the nation's second largest telephone company.

U.S. District Judge Jed Rakoff, who is overseeing the Securities and Exchange Commission's fraud suit against WorldCom, is expected to review the terms of Capellas' compensation package.

Capellas, 48, has had a long career in information technology but no direct telecom experience.

But Sidgmore said in the statement that Capellas was the company's top candidate. ``His acceptance of our offer confirms our optimism about the future of our company,'' he said. The head of the WorldCom creditors' committee also endorsed the selection.

Capellas and HP chief Carly Fiorina announced HP's purchase of Compaq in September 2001, then barely survived a brutal proxy fight with former HP director Walter Hewlett, son of company co-founder William Hewlett. Critics questioned whether HP and Compaq could merge successfully.