WorldCom CEO’s Future Is Tenuous
Two WorldCom Inc. board members are urging other directors and creditors to fire Chief Executive John W. Sidgmore, saying his vision for bringing the telecommunications company out of bankruptcy protection is flawed and the company should instead be shopping itself to potential buyers.
Sources said board members Max E. Bobbitt and Stiles A. Kellett Jr. never fully supported Sidgmore. They have enlisted the help of several creditors to oust Sidgmore, but the two men have yet to win over the 10-member board.
Sidgmore said he has no plans to step down.
“I have the support of the majority of the board,” Sidgmore said, adding that he was fully aware of efforts to remove him by two members, whom he declined to name.
The debate over Sidgmore’s future reflects the lingering differences that exist inside the nation’s second-largest long-distance company since it pushed out Bernard J. Ebbers as chief executive and chairman and later discovered that $7.65 billion in expenditures had been improperly booked.
WorldCom, parent company of Arlington, Va.-based MCI Group, is the subject of several federal investigations. The company filed for bankruptcy protection last month.
Sources familiar with the company said Bobbitt and Kellett have met with creditors in recent weeks, seeking their support to replace Sidgmore. One source said that a group of creditors and some board directors already had interviewed a potential replacement for the chief executive.
Bobbitt and Kellett referred inquiries to their lawyers, who either declined to comment or did not return calls.
According to people familiar with Bobbitt and Kellett’s thinking, the two men find fault with Sidgmore’s leadership of the company.
Among Bobbitt and Kellett’s biggest complaints is that Sidgmore has not shared information about the company freely with other board members.
Sidgmore repeated Friday that he had no knowledge of the company’s accounting problems before they were discovered by an internal auditor in May.
Sources both inside and outside the company trace the strained relations between Bobbitt, Kellett and Sidgmore to April, when the board ousted Ebbers.
According to sources familiar with the board’s actions on the weekend of April 26, the directors initially voted to make Bobbitt chief executive but quickly reversed their decision and chose Sidgmore.
Bobbitt gained the support of the board with his proposal to sell the company to a regional telephone company such as BellSouth Corp. or Verizon Communications Inc.
Bobbitt’s brief career as chief executive came to an end in just hours, when he and Kellett called to inform Bert C. Roberts Jr., chairman of the board and a former chief executive of MCI.
According to sources familiar with the conversation, Roberts became irate and angrily rejected the decision, saying he would not work with Bobbitt to sell WorldCom.
