Bernie Ebbers, the maverick WorldCom Inc. executive who wrestled MCI Communications Corp. away from two other suitors, received a US$17 million bonus for his efforts last year, the company said.
Ebbers, WorldCom's chief executive, could also reap tens of millions more if the company's stock sees a fraction of the gains it has produced over the past several years, according to a filing with the Securities and Exchange Commission.
In 1997 Ebbers received options to purchase 1.2 million shares at $26 a share. The options may be exercised in annual installments through the year 2000 and expire in 2007. According to the proxy materials, the options would be worth $19.6 million if WorldCom's stock rises five percent a year. The options would be valued at $49.7 million if the stock gains 10 percent a year.
WorldCom's stock is trading at around $44. The stock has gained about 44 percent since the start of the year, compared to a 16 percent increase in the Dow Jones industrial average. WorldCom's stock has been one of the leading chargers in the US equities bull market, pushing past its peers through a series of acquisitions and its strong focus on the fastest growing and most profitable aspects of the telecommunications industry.
Ebbers also received $935,000 in base salary in 1997, which was unchanged from the previous year, the company said in the SEC filing. His base 1998 salary will remain $935,000. Ebbers' 1996 salary and bonus totaled $3.27 million.
Ebbers has led WorldCom from a little-known Jackson, Mississippi, upstart to a telecommunications powerhouse. WorldCom's stunning bid for MCI last fall unraveled MCI's existing pact with British Telecommunications Plc and kept a third suitor, GTE Corp., at bay.
The proposed MCI-WorldCom merger remains subject to regulatory approval.
WorldCom's chief financial officer, Scott Sullivan, who Ebbers previously credited with the idea to bid for MCI, received a bonus of $3.5 million in 1997, in addition to his base salary of $500,000. Sullivan also received one million stock options at $26 a share. Sullivan's 1996 salary and bonus was about $875,000.
John Sidgmore, WorldCom vice chairman, was paid $500,000 in base salary in 1997 and received one million options at $26 a share. In 1996, Sidgmore received $778,020 in salary and bonus.
In connection with the proposed MCI merger, WorldCom created an award pool of up to $170 million to provide retention incentive for MCI senior executives.
Under that plan, MCI Chairman Bert Roberts will receive $10.5 million, MCI Chief Executive Gerard Taylor will get $9.5 million and MCI President Tim Price will gain $9 million, the filing said.
