AT&T names John Stankey as CEO as Randall Stephenson steps down

AT&T today announced the appointment of John Stankey as CEO from July 1, 2020, and Randall Stephenson as the executive chairman.
AT&T CEO Randall Stephenson image by BloombergAT&T said Randall Stephenson, 60, will retire as CEO but will serve as executive chairman until January 2021. Randall Stephenson was the chairman and CEO of AT&T in the last 13 years. Later this year, AT&T’s Board will elect an independent director to chair the Board of Directors.

AT&T was under pressure from activist shareholder Elliott Management to remove Randall Stephenson from the CEO job — even before the retirement.

AT&T’s spending on acquisitions of DirecTV and Time Warner, which are yet to create significant revenue streams, has resulted into the creation of $200 billion in debt. Elliott Management earlier criticized the moves when it picked up a $3.2 billion stake in the company last year.

“We have been engaged with the company throughout the search process, which was a robust one, including a range of highly qualified outside candidates and overseen by independent directors,” said Jesse Cohen, a partner at Elliott Management.

AT&T in an earlier SEC filing said CEO Randall Stephenson’s FY 2019 total compensation was $32 million versus $29.1 million in FY 2018.

AT&T president and coo John Stankey’s FY 2019 total compensation was $22.5 million versus $16.6 million in FY 2018.

Total compensation of John Donovan, former CEO of AT&T Communications, was $27 million in FY 2019.

Challenging business ahead for John Stankey 

John Stankey is currently the president and chief operating officer of AT&T. Several media reports said AT&T did not find a suitable CEO candidate outside AT&T despite looking for a person for the last five months.

John Stankey, 57, has served as president and COO since October 2019. He joined AT&T in 1985 and has more than 30 years of leadership spanning nearly every area of AT&T’s business, from corporate strategy and technology, to operations and media and entertainment.

John Stankey has served in a variety of roles, including: CEO of WarnerMedia; CEO of AT&T Entertainment Group; chief strategy officer; chief technology officer; CEO of AT&T Operations; and CEO of AT&T Business Solutions.

The announcement on the appointment of veteran John Stankey, made during AT&T’s virtual annual shareholder meeting, drew a sharp response from U.S. President Donald Trump, who tweeted it was “great news” that Stephenson was leaving.

“Anyone who lets a garbage “network” do and say the things that CNN does, should leave ASAP. Hopefully replacement will be much better!” Donald Trump wrote.

John Stankey oversaw WarnerMedia after AT&T’s $85 billion purchase of media company Time Warner, as well as the creation of HBO Max, the new streaming service that will launch May 27.

The success of HBO Max will be a big test of John Stankey’s role as CEO as AT&T hopes to compete with streaming giants like Netflix and Walt Disney’s Disney+.

AT&T’s board reviewed both external and internal candidates for the CEO role as part of a succession planning process started in 2017.

New York-based Elliott Management called for a shake-up at AT&T, urging the company to end its buying spree and improve its operating businesses. The hedge fund also questioned John Stankey’s leadership skills and AT&T’s desire to promote him to the top role.

A continuing challenge for John Stankey will be to stitch together AT&T’s media business with its phone, TV and internet products, to create an advertising powerhouse. Brian Lesser, who led AT&T advertising unit Xandr, resigned last month.