GOOD RIDDANCE

The day WorldCom CEO Bernie Ebbers tendered his resignation was the best day for telecom stocks since Sprint PCS and Nextel nailed their subscriber growth goals two weeks earlier. WorldCom stock rose 5.5% when Ebbers quit and shared gains with SBC, AT&T, Nextel and Lucent. One analyst was actually quoted on the CNN/Money magazine Web site saying, “Telecom is strong today,” words that look funny together in print these days. And it wasn't profits or debt reduction triggering this brief ray of sunlight. It was (at least in large part) a chief executive quitting, which calls into question the lengths troubled telecom companies go to retain troublesome CEOs. In the two years before Lucent finally decided it would be better off without Rich McGinn, the board padded him with more than $20 million in salary and bonuses. An April SEC filing decreed that if Qwest CEO Joe Nacchio is fired or quits for “good reason,” the firm will pay him twice his base salary and target bonus — an amount that, if he were fired this year, would come to about $10.5 million. As Nacchio earns more scrutiny for alleged accounting and transaction impropriety, Qwest's board may decide that Nacchio's leaving is worth much more than $10.5 million; last year, Qwest gave Nacchio nearly three times that to stay. Directors are wise to try to prevent management from leaving a sinking ship, but they sometimes find greater buoyancy by getting rid of those who rock the boat.