New York, Sept. 11 (Reuters): WorldCom president and chief executive John Sidgmore, who took the reins at the debt-laden telecommunications company less than five months ago, will step down as soon as a replacement is found, the company said on Tuesday.
WorldCom’s board also on Tuesday considered rescinding a severance package for former chief executive Bernard Ebbers that included $ 1.5 million a year for life and a $ 408-million loan, but no action was taken.
In a separate issue, sources said federal prosecutors will meet in a few weeks with WorldCom chief operating officer Ronald Beaumont in an effort to link Ebbers with the $ 7.68-billion accounting scandal that pushed the company into the world’s largest bankruptcy.
The number two US long-distance carrier, which filed for bankruptcy in July, also said it was on track to emerge from Chapter 11 bankruptcy protection by the middle of 2003. Sources close to the company said WorldCom should have a new CEO by the end of the year.
Sidgmore said on Tuesday his appointment in April 2002 was meant to be an interim step after Ebbers resigned under pressure. However, last month the Washington Post reported two board members were urging other directors and creditors to fire Sidgmore.
“I have concluded that having moved WorldCom through the initial phase of the bankruptcy process, now is the appropriate time for the company to initiate a search for a long-term CEO,” Sidgmore said in a statement.
“By returning to my vice-chairman role, after the search is complete, I, along with Bert Roberts will be able to remain active in a strategic capacity while our new CEO manages the day-to-day operations of the company and the overall bankruptcy process.”
When a new CEO is named, Sidgmore will return to his role as vice-chairman and Bert Roberts will continue in his role as chairman, the company said. On July 21, Clinton, Mississippi-based WorldCom became the largest corporate bankruptcy. It admitted in June and August to the accounting misstatements. Three of its former executives, including its former chief financial officer, have been arrested on charges of fraud.