$32m man Capellas meets his maker (or Judge)

Compaq overlord must empty his pockets

The collapse of the dotcom bubble has been described, quite accurately, as the greatest loss of wealth in human history. But take heart, a few survivors have prospered. Give or take the minor judicial roadbump.

So let's hear if for endurance! When we interviewed Scott McNealy recently, he claimed that all of Sun's executive committee had been at the company for ten years, "... and knew how to finish each other's sentences".

But what do you know? The rascal is telling the truth, it turns out, and with the exception of Mr Schwartz who joined four years ago, it checks out: Sun's management committee has been around for a very long time. And what a contrast it makes with the Don.

Today, Mike 'Don' Capellas is scheduled to appear before a New York judge to explain his salary as he takes the job of chief executive at $9 billion fraudster WorldCom.

Capellas, unheard of at the start of 1999, rose without trace and in two short years pocketed $14.4 million from the sale of Compaq to Hewlett Packard. He stuck around just about long enough to see the deal through, and having served his purpose, and having pocketed his bonus, bolted to the bankrupt telco at the earliest opportunity.

From WorldCom, Capellas gets a signing-on fee of $2 million, $3 million salary guaranteed next year, and if either side bails out early, the Don will be $9 million richer.

It's almost the perfect scam, only a Manhattan district lawyer called Judge Jed Rakoff has reminded the disgraced telco that's it's still in receivership, that WorldCom's debts belong to real investors, that call centre Morlocks are being laid off by the thousand, and so perhaps the management ought to behave with at least a temporary interlude of forelock-tuggin' contrition, before filling their pockets once again, and making off with the loot.

Judge Rakoff found Capellas' reward particularly abhorrent.

"A compensation package so potentially problematic raises serious concerns as to whether proposed new management is as committed to reform as the nature of this case requires," he said.

In other words, even the Judge doubts whether Capellas can keep his mind concentrated on the job for very long, before cashing in his chips. When Steve Jobs returned to Apple, he was effectively doing the job for nothing. Admittedly, he was already a billionaire, but the gesture was important. Asset stripper Capellas should be reminded of the responsibility. We can't wait to hear his explanation. ®

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