Tuesday, 19 November 2019

Is AT&T CEO's job really under threat from activist investor?

By Mary Lennighan, for Total Telecom
Tuesday 24 September 19

Reports that Elliott Management wants a say in choosing the telco's next chief executive should come as little surprise

News reports from across the telecoms industry on Tuesday suggested that activist investor Elliott Management is pushing for a management overhaul at AT&T and that chief executive Randall Stephenson could be in the firing line. But there seems to be some sensationalist reporting at play here…

News reports from across the telecoms industry on Tuesday suggested that activist investor Elliott Management is pushing for a management overhaul at AT&T and that chief executive Randall Stephenson could be in the firing line.

But there seems to be some sensationalist reporting at play here.

The story, which originally came from Fox Business, is actually that Elliott is keen to have a say in choosing Stephenson's replacement when the time comes. That is, his eventual replacement.

Drawing the conclusion that Elliott is looking to immediately unseat the long-serving CEO is a step too far.

"If Elliott goes through with pushing its views on the composition of AT&T's management – as telecom executives tell Fox Business it is considering– it would possibly set the stage for a contentious battle in what has been, at least for now, a cooperative relationship between the telecom giant and the activist fund," the news outlet reported. It added that Stephenson, who took on the top job at AT&T in 2007, has no plans to step down at present.

Further, the Activating AT&T plan that Elliott presented earlier this month when it acquired a US$3.2 billion stake in the company earlier this month included its desire to overhaul the company's management, adding new expertise to the board.

Thus the company's desire to have its say in choosing the next CEO, presuming Fox Business's intell is correct, will come as little or no surprise to those currently running AT&T, Stephenson included.

That said, the chief executive's office is doubtless a far less comfortable place to be following the arrival of Elliott.

Speaking publicly about the new investor, Stephenson has played down any possible conflict and even backed some of the ideas it has put forward.

But it goes without saying that life was easier for AT&T's management a month ago.

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