TULSA (AP) -- Williams Communications Group shareholders, whose
more than $2 billion in equity was erased in the company's
bankruptcy, are angry that executives' stock losses were softened by
On Jan. 18, the Tulsa-based broadband wholesaler agreed to
forgive $13 million in top executives' outstanding loans. The loans,
made with company shares as collateral, were used to buy more
company stock. Shareholders have called the bonuses a "free lunch,"
and several have filed complaints with the Oklahoma Department of
Securities. The department on Friday launched an investigation into
WCG's spinoff from Williams Cos. and related financial transactions.
A committee of more than 4,000 shareholders have hired an
attorney to fight for their interests in U.S. Bankruptcy Court for
the Southern District of New York, where the company filed Chapter
11 on April 22. H. Brian Thompson, chairman of the company's
compensation committee, said the company felt it had to offer the
bonuses to keep executives from taking positions with other
companies. "Some of our folks were being recruited heavily,"
Thompson said, adding that recruiting companies were offering loan
forgiveness. "They're first-class people."
Under a Williams Cos. stock option program inherited by Williams
Communications after the April 2001 spinoff, executives could borrow
up to 80 percent of the value of their stock to buy more shares. By
the time of the Jan. 18 compensation committee meeting when the loan
forgiveness plan was approved, the outstanding executive loans had
exceeded the value of the collateral shares. Under "the executive
retention bonus plan," 20 percent of executives' loans are forgiven
each year for five years. The plan is guaranteed even if the company
files for bankruptcy, according to the company's annual report. The
five executives singled out for the retention bonuses and their
outstanding loan balances as of Dec. 31 were:
* Chairman, Chief Executive and President Howard Janzen, $5.6
* Chief Financial Officer Scott Schubert, $4 million.
* Co-chief Operating Officer Frank Semple, $2 million.
* Senior Vice President of Human Resources Gerald Carson, $1.2
* Director of Corporate Development James Dutton, $238,478.
Co-chief Operating Officer John Bumgarner Jr. has more
outstanding loans than any other executive, with $6.9 million
outstanding, but he is not included in the retention bonuses because
he is retiring later this year, company officials said.
WorldCom to cut 100 Tulsa workers
TULSA (AP) -- Telecommunications giant WorldCom is letting go
about 100 of its workers in Tulsa as part of previously announced
cuts. The Tulsa employees who lost their jobs Wednesday worked in
corporate positions, in MCI wholesale and in customer service, said
spokeswoman Mary Catherine Ratts.
The Clinton, Miss.-based company announced on April 3 that it
would lay off 3,700 people, or about 4 percent of its 75,000-member
work force. "There will be no more layoffs in the foreseeable
future" for the roughly 3,000 WorldCom employees in Tulsa, Ratts
The telecom slump has resulted in other layoffs in Tulsa.
Williams Communications Group, which filed for bankruptcy last
month, laid off 800 people in March and 400 workers last year.
Stock barometers closed mixed
NEW YORK (AP) -- Technology stocks slid again Thursday, their
10th drop in the last 12 sessions, on Wall Street's growing
conviction that battered high-tech firms will be the last to recover
from recession. The Dow industrials managed a moderate gain, enough
to secure their first three-day advance in nearly two months. …