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The head of AT&T (NYSE: T) has announced that he will step down as chief executive and chairman after 44 years with the telecom giant.
Edward Whitacre Jr., who helped maneuver the company's expansion from regional telephone provider to the largest telecom in the nation, says he will retire on June 3.
Whitacre, 65, unexpectedly made the announcement at an annual shareholders meeting in San Antonio, where he also said the board has elected Chief Operating Officer Randall Stephenson, 47, to be his successor. Stephenson, well-regarded in the financial community, was considered an odds-on favorite to land AT&T's top spot. Whitacre's contract had been due to expire in April 2008.
Long Tenure
During his 17 years as the head of AT&T, Whitacre presided over the company's growth from the smallest of the "Baby Bells" to the country's largest provider of wireless, broadband and phone services.
Also, Whitacre aggressively managed a host of acquisitions, the most recent being the US$86 billion purchase of BellSouth (NYSE: BLS).
"There would never be an easy time for me to leave this job. This job has meant so much to me, but now is the right time to step aside," he said.
Whitacre is the longest-serving CEO in the telecommunications industry, and one of the longest-serving in the Fortune 500.
Investing in the Future
Prior to becoming COO, Stephenson was senior executive vice president and chief financial officer for SBC. During his tenure, SBC reduced its debt from $30 billion to near zero by early 2004, which was followed by strategic acquisitions of AT&T Wireless, AT&T and BellSouth.
AT&T will likely stay the course under new leadership, predicted Mukul Krishna, an analyst with Frost & Suillivan.
The company has been investing substantial resources in products and systems to help it compete with a cable television industry that continues to make inroads into AT&T's bread-and-butter business, the phone services market.
"As cable companies continue to push into telephony, it is very important for telecoms to go after some of that market," Krishna told the E-Commerce Times.
Golden Parachute
Whitacre won't be leaving empty-handed. The Texas native is walking away from the post with a cushy retirement package totaling $158.5 million, according to the company's proxy filing with the Securities and Exchange Commission.
In addition, he will receive $24,000 per year in benefits to cover car costs and $6,500 a year for home security. In addition, he will be entitled to use the company jet for 10 hours per month.
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