Doin' the Curly Shuffle

Michael was moody and inconsistent. He could agree to something on one day and object strenuously the next. … He could be charming and focused. He could be depressed and disengaged. He could be rude and abusive.

“… I told H-P’s board in midsummer [2001] that our biggest problem with integration would be Michael. I said that I would work hard to make him successful, but that we’d need to be prepared to move him out of the company within a year.

“… I concluded one of those conversations by saying ‘Michael is like the little girl who had a little curl right in the middle of her forehead. When he’s good, he’s very, very good, and when he’s bad, he’s horrid.’ “

–Former Hewlett-Packard CEO Carly Fiorina on former Compaq Chief Executive Michael Capellas in her book, “Tough Choices”

If First Data’s board of directors owns a copy of Fiorina’s memoir, they clearly don’t lend much credence to her withering assessment of Michael Capellas. Because this morning, the Denver-based transaction processor said it will name him as CEO following completion of the acquisition of the company by Kohlberg Kravis Roberts & Co. Capellas will succeed Henry “Ric” Duques, who came back to the company in 2005 to oversee its reorganization.

Sharp guy, Capellas. When he left H-P in 2002, he received $14.4 million in severance, plus a $1.9 million incentive payment and $9.6 million to cover his taxes on the payments. When he took over at MCI, he nabbed a $2 million signing bonus. And when he left, he trousered a $39.2 million payout–$11.3 million for three years’ worth of salary and bonus; $18.5 million from a previously disclosed restricted stock grant; and $9.4 million in payments to cover the taxes on his exit package, according to an MCI proxy statement.

As ZDNet’s Larry Dignan notes, it doesn’t take a brain surgeon to chart Capellas’s next moves. They’ll look like this:

• Capellas becomes CEO at First Data and gets hooked up with a sweet compensation package (there are no griping shareholders in private equity);
• First Data goes public again (after all, that’s how KKR will cash out);
• Capellas stays as CEO and perhaps sells First Data to another firm.

Sounds like a plan. All that’s missing is a step in which he pens the 3,390-word memo about how he’s going to “transform [First Data], and do it over the next 180 days.”