AT&T CEO Whitacre Will Retire Unexpectedly
Friday, April 27th 2007, 12:34 pm
By: News On 6
SAN ANTONIO (AP) _ Edward Whitacre Jr., who led AT&T Inc.'s expansion into the largest telecommunications company in the nation, announced unexpectedly Friday that he will retire as chairman and chief executive in June.
Whitacre, 65, also announced at the company's annual meeting that the board has elected Chief Operating Officer Randall Stephenson, 47, to replace him in both roles on June 3. Stephenson has been the chief operating officer since 2004.
Whitacre, an outspoken Texan known for blunt remarks on industry topics, has worked for AT&T and its predecessor companies for 44 years.
In his 17 years at the helm, he presided over the company's growth from a regional telephone provider to the nation's largest provider of wireless, broadband and traditional phone service through an aggressive string of acquisitions, most recently the $86 billion purchase of BellSouth.
Whitacre's contract doesn't expire for another year, and it wasn't immediately clear what spurred his decision to step down now.
The 65-year-old will enjoy a rich payout in retirement, however. He'll collect more than $161.6 million, including $73.8 million in deferred compensation and the $84.7 million in his pension fund. He'll also make more than $1 million per year for three years as a consultant for the company, according to AT&T's proxy statement.
During that time, he'll enjoy continuation of his benefits and some tax help, including the payment of about $15,600 in taxes per year.
Though the company's stock has rallied and is trading at 5-year highs, the compensation of Whitacre and other AT&T executives has been the subject of debate among some shareholders, who have lobbied for more say in how much the executives earn. On Friday, three shareholder-driven initiatives to limit compensation and pension funds were defeated.
But Whitacre announced at the meeting that the board had approved a 6.2 percent increase in monthly benefits for AT&T's oldest and poorest retirees. Roughly 88,000 former employees who retired before 1996 and receive less than $1,200 per month will get the increase starting in October.
Whitacre told shareholders at the meeting that he had great confidence in the company's next generation of leadership.
``We're doing the things we need to do to keep the momentum we have,'' he said.
The company, formerly named Southwestern Bell and then SBC Communications, was actually the smallest of the seven ``Baby Bells'' spun off in 1984's government-ordered breakup of the national AT&T monopoly.
But under Whitacre, who began at Southwestern Bell in 1963 as a facility engineer, the company acquired three of its larger Bell siblings, as well as its former corporate parent, the AT&T long-distance business created in the breakup, renaming itself AT&T in the process.
Stephenson started with Southwestern Bell in 1982, and like Whitacre, rose through the ranks of the company as it grew.
Before becoming the chief operating officer, he was the chief financial officer and oversaw a drive to reduce the company's debt, positioning the company to make the string of acquisitions that allowed it to grow aggressively.
He also served as chairman of Cingular Wireless LLC's board in 2003 and 2004. Cingular, which had been a joint venture between AT&T and BellSouth, is the nation's largest carrier with 62 million subscribers and is a major source of revenue growth for AT&T as traditional phone line revenue continues to decline.