So how would you like to drive a company into the ground and get paid for life?
WorldCom to pay Ebbers $1.5 million a year
PHILADELPHIA, May 16 (Reuters) - WorldCom Inc. <WCOM.O> <MCIT.O> said it will pay an annual pension of $1.5 million to its former chief executive Bernie Ebbers, who resigned last month after the telephone and data services company's stock plunged 80 percent in four months.
The Clinton, Mississippi company will pay Ebbers the $1.5 million pension, and medical and life insurance benefits for the rest of its life, according to a filing with the Securities and Exchange Commission.
It also will provide an annual pension benefit of $750,000 to his wife for the remainder of her life, should she survive him, the company said.
Ebbers, the brash executive who transformed the company from a long-distance reseller into a global company serving 65 countries, resigned last month as WorldCom's financial woes mounted. He had been with the company since its start in 1983 and was succeeded by WorldCom's vice chairman John Sidgmore.
WorldCom faces a regulatory inquiry into its accounting practices and personal loans it made to Ebbers. WorldCom Group's stock was removed from the Standard & Poor's 500 Index, and credit ratings on its $30 billion in debt were slashed to "junk" status.
The company, which has struggled with slack demand for data services in the weak economy, price wars, and stiff competition, said on Wednesday it would tap a $2.65 billion bank credit line to gain extra funds and time as it tries to negotiate a new, larger financing package.
Under the severance agreement, Ebbers cannot compete against WorldCom for five years. He will hold the title of "chairman emeritus" at WorldCom and provide consulting services to the company from time to time. Ebbers also will have use of the company's planes and the right to lease office space.
The company said it consolidated the loans and guaranty payments made to Ebbers into a single note of $408.2 million, which he will repay over five years with accrued interest. Ebbers pledged his holdings in WorldCom, as well as certain stakes in privately held businesses he owned.
Ebbers' outstanding stock options became fully vested on April 29 and will remain exercisable for fives years. Ebbers holds options to acquire 1.79 million shares of WorldCom Group stock at an average price of $30.90 a share, and options to acquire 9.5 million shares of WorldCom Group stock at an average price of $21.25.
Shares of WorldCom Group, which tracks the company's main data and Internet business, added 4 cents, or 3 percent, to $1.34 on Nasdaq. Shares of MCI Group, which reflects the residential telephone operations, added 1 cent to $2.10.
05/16/02 12:25 ET
well I guess you win some and you lose none
once again it is shareholders that get shafted.