Global Crossing Names 3 to Board
Global Crossing Ltd., which has gone through several dozen directors in three years, appointed three new board members Monday and put them on key committees as the troubled fiber-optic network operator tries to shore up confidence amid federal investigations into its accounting practices.
The new directors--Jeremiah D. Lambert, Alice T. Kane and Myron E. “Mike” Ullman III--will sit on a special committee formed to investigate allegations by a former vice president that the company inflated revenue from sales of network capacity. Global filed the fourth-largest bankruptcy in U.S. history in late January.
“They do need independence on that board,” said Peter Gleason, vice president of research at the National Assn. of Corporate Directors. “When a company is in Chapter 11, management has to seek the expertise of the board and use its knowledge to get through it, if they are going to get through it.”
The three have experience in areas needed to help guide Global’s restructuring and probable sale, and have joined three board committees overseeing major issues that have plagued the company.
Lambert, a Washington lawyer who specializes in energy law, will chair the board’s audit committee and its special independent committee looking into inflated revenue allegations. Federal regulatory and congressional investigators also are probing the company’s accounting practices.
Ullman, now retired in San Francisco, is a former chairman and chief executive of R.H. Macy & Co. and was one of several executives approached in 1995 to run Kmart Corp., which went into bankruptcy protection a week before Global Crossing. More recently, he was managing director of luxury-goods company LVMH Moet Hennessy Louis Vuitton.
Kane, a Short Hills, N.J., consultant for such investment banking firms as Blaylock & Partners, will chair the board’s compensation committee. The new directors already have their hands full on pay issues.
Since reorganizing its board last fall, Global has lost five directors including three who left the Bermuda-based company since the Jan. 28 bankruptcy filing.
The latest was former Defense Secretary William S. Cohen, who stepped down March 19 because of personal time constraints. His departure came after a valuable and prestigious defense contract won by Global was pulled back and rebid. The contract, awarded to WorldCom Inc. last week, is worth up to $450 million.
The new directors increase the size of the Global board to eight, including four outside directors. Unlike most of Global’s previous outside directors, none of the ones named Monday had prior dealings with Global or its top executives, said company spokeswoman Karen Price.
Also on Monday, Global--known for its high salaries and lavish spending--asked the Bankruptcy Court to approve a re-arranged employment contract with its chief executive, John Legere.
The package amounts to as much as $10.9 million, including salary, a possible bonus and “tax indemnification.”
Under the new agreement, Legere’s annual salary would remain $1.1 million, with a 30% reduction to $770,000 during the company’s restructuring.
In addition, Legere would be eligible for an annual bonus equal to $1.375 million if he meets performance goals set by the Global Crossing creditors’ committee.
Times staff writer Elizabeth Douglass contributed to this report and Associated Press was used in compiling it.
