MCI’s Capellas: Its Bonus Time

MCI has been in news lately, for all the wrong reasons. Just as a reminder, I wanted to recap its 2004 fiscal achievements.

For the full year 2004, revenues totaled $20.7 billion, down 15% from 2003 revenues of $24.3 billion. Operating loss was $3.2 billion. Operating income before $1.9 billion of depreciation and amortization, a $1 million gain on property dispositions and $3.5 billion of impairment charges would have been $2.2 billion in 2004. In 2003, operating income was $0.7 billion; operating income before $2.3 billion of depreciation and amortization, and a $43 million loss on property dispositions would have been $3.0 billion.

If you read those numbers, the company basically underperformed on every metric – revenues, net income, operating income etc. That, however did not stop MCI to hand out CEO Michael Capellas a $5 million bonus for his performance in 2004. The incentive bonus is on top of $1.5 million salary and $1.5 million bonus for 2004. He will receive 357,241 shares of restricted stock in the company, reports.

MCI’s compensation committee approved the bonus based on “Capellas’ outstanding accomplishments during 2004,” which included guiding the company out of bankruptcy, getting it back on track financially, and moving the company back into the public markets.

I need to get a new dictionary to understand the meaning of the word, outstanding.