Report: $40 Million Payout For MCI's Capellas

MCI’s chief Michael Capellas may be entitled to receive $39.2 million when Verizon Communications acquires MCI, The Wall Street Journal reported Friday.

The newspaper said MCI’s proxy statement, filed Thursday, indicated that Capellas, president and chief executive of the long distance telecommunications firm, will receive that payout, if he leaves MCI, which he is expected to do.

The payout is the second big one for Capellas, who, as CEO of Compaq Computer, received $14 million when he left Hewlett-Packard after it acquired Compaq, according to published reports at the time.

The MCI proxy statement states that Capellas’ payout covers three years of salary and bonus, restricted-stock grants, and payment for taxes.

MCI spokesman Brad Burns defended the payout telling the newspaper, “Michael and his leadership team engineered one of the largest, most successful turnarounds in corporate history.”Capellas took over the reins of MCI, formerly called WorldCom Inc., after an accounting fraud -- the largest in the history of U.S. business -- plunged the firm into bankruptcy. WorldCom’s former chief executive, Bernard Ebbers, has been sentenced to 25 years in prison after his conviction for fraud and conspiracy.