Tuesday, July 16, 2002

Executives of firms with accounting scandals keep singing the same sad refrain --- they don't understand what their finance departments were doing, and weren't really paying attention.

Cynics have scoffed at this line --- if looking after the health of the corporation isn't their job, what is? With that in mind, consider John Sidgmore, the CEO of embattled Worldcom, now reported to be preparing for Chapter 11. While serving as vice chairman, in a major oversight role while fraud was rotting the company out from under the board...

According to executives at WorldCom, Mr. Sidgmore, after stepping down as chief operations officer in 1998, did little more than work on mergers and give speeches. He has earned a total of at least $6.5 million and made $25 million in profits from WorldCom stock since he came to the company, though his annual salary as a board member declined to $120,000 in 2001 from a peak of about $2.2 million in 1999. And in 2000 and last year, Mr. Sidgmore served as the chairman of two start-up companies and on the boards or advisory boards of half a dozen more.

So, it's completely unreasonable to expect him to know what was going on at WorldCom. Who has the time?

Then again, even though board membership isn't supposed to be a full-time position, the answer to that question may still be John Sidgmore. He is now CEO of WorldCom, charged with rescuing a huge company with a critical role in the country's communications infrastructure, which is on the brink of collapse. For most of us, the job would be all-consuming. But not John Sidgmore; he still continues to serve simultaneously as chairman and CEO of Ecommerce Industries of Vienna, Va. Clearly, this is a man of many parts.


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