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Wall Street Journal, April 27, 2007 article

 

The Wall Street Journal  

April 27, 2007 2:40 p.m. EDT

 
 

AT&T's Whitacre Will Retire in June

Operating Chief Stephenson Named
Phone Giant's Next Chairman, CEO
By DIONNE SEARCEY
April 27, 2007 2:40 p.m.
 

Edward Whitacre, AT&T Inc.'s chairman and chief executive who presided over numerous acquisitions and grew the company into the largest telecommunications operator in the world, is stepping down June 3.

[Edward Whitacre Jr]

Mr. Whitacre announced his retirement at a shareholders' meeting this morning in San Antonio, Texas, the company's hometown. His loyal understudy, Randall Stephenson, AT&T's chief operating officer, will take his place.

"I leave with complete confidence in the future of our great company," Mr. Whitacre said in a news release. "Randall Stephenson is an exceptional leader. He has a deep understanding of this business and a clear sense of where it should go."

Mr. Whitacre spent his entire career at AT&T, which was called Southwestern Bell Telephone Company in 1963 when he started his first job in as a facility engineer. As a manager at the company he weathered the breakup of the Bell system, and as CEO he worked to piece it back together. (See bios on Mr. Whitacre1 and Mr. Stephenson2.)

Mr. Stephenson, 47, joined Southwestern Bell in 1982 in the information technology organization in Oklahoma. Before becoming COO in 2004, Mr. Stephenson helped the company reduce its net debt from $30 billion to nearly zero by early that year, helping to position the company as a takeover giant. He served on the board of Cingular Wireless, now known as AT&T's wireless unit, from 2001-2006 and served as its chairman for two years.

During Mr. Whitacre's 17-year reign as CEO he demonstrated a penchant for corporate takeovers, acquiring Pacific Telesis, Ameritech and others and most recently the old AT&T Corp. and BellSouth Corp. and shepherding the company through multiple transitions and name changes.

He brokered deals with Yahoo Inc. to grow the company's high-speed Internet business and launched a foray into television helped in part by a deal with EchoStar Communications Corp. He secured AT&T's place as a dominant force in the wireless business by helping to take over AT&T Wireless and then seizing full control of Cingular Wireless.

Born in Ennis, Texas, Mr. Whitacre earned a bachelor's degree in industrial engineering at Texas Tech University. He worked in Southwestern Bell's offices in Texas, Arkansas and Kansas until 1982 when he was named head of the company's Kansas division. Six years later he became chief operating officer and in 1990 was named CEO of the company, then called SBC Communications Inc.

Mr. Whitacre has one of the biggest retirement packages on file so far this year with federal regulators. He stands poised to receive a total of $158.5 million, according to The Corporate Library, a Maine-based corporate governance research firm. (See related story10.)

[Randall Stephenson]

Mr. Stephenson is inheriting a company situated on a competitive landscape that is more complex than ever. AT&T must navigate threats from cable companies eager to steal Internet and phone customers as well as new content companies poised to offer telecom services that directly compete with AT&T. It hopes to become the only company that multinational corporations turn to for telecommunications services world-wide, meaning it must navigate political and technological hurdles overseas. And it must be careful with its new high-tech offerings not to cannibalize its own services.

Mr. Stephenson holds a master's degree in accounting from the University of Oklahoma. He has been at AT&T for the past 25 years mainly overseeing telecom finances and became chief financial officer in 2001. He has pushed the company to become more deeply involved in wireless as well as bolster its ties to Hollywood for content deals for AT&T's new television service. His forthcoming style has made him popular with analysts and the executive team at AT&T.

AT&T also announced Friday that its general counsel, James D. Ellis, is retiring. Mr. Ellis, who joined the company as an attorney in 1972 and held various legal positions, has served as general counsel since 1989. Wayne Watts, the company's associate general counsel, will replace him.

Write to Dionne Searcey at dionne.searcey@wsj.com11

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