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AT&T CEO Stephenson Stepping Down

AT&T CEO Randall Stephenson is stepping down from his long-held position as CEO, the telecom has confirmed

Chief operating officer John Stankey, who up until recently ran the telecom’s entertainment division, will assume Stephenson’s chief executive role.

Notably, amid a recent conflict with shareholder Elliot Management, Stephenson had pledged to stay with AT&T through 2020. Stephenson will remain executive chairman of the board until January 2021. The departure of Stephenson, 60, is being billed by AT&T as a retirement. 

Also read: AT&T Told to Sell DirecTV by Hedge Fund Investor

Amid a flurry of expensive acquisitions and tough calls in the competitive U.S. wireless industry, AT&T's stock is down around 15% since 2015. Stephenson had served as CEO since 2007. 

During AT&T's first-quarter earnings call earlier this week, the telecom struck a tone of a company in recession. Having loudly touted under Stephenson the benefits of the Trump Administration's corporate tax cut program in 2017, AT&T is now pledging $6 billion worth of spending cuts by 2023. 

It was Stankey who introduced that reduction program in Wednesday earnings call. 

"We're not backing off our cost and efficiency transformation initiatives that remain largely under our control," he said.

“I congratulate John, and I look forward to partnering with him as the leadership team moves forward on our strategic initiatives while navigating the difficult economic and health challenges currently facing our country and the world," Stephenson said in a statement. "John has the right experiences and skills, and the unflinching determination every CEO needs to act on his convictions. He has a terrific leadership team onboard to ensure AT&T remains strong and continues to deliver for customers and shareholders for years to come.”

Stankey, 57, recently relinquished his title as CEO of AT&T's WarnerMedia division to newly hired former Hulu chief executive Jason Kilar. His appointed as AT&T's top executive officially begins June 1.

AT&T said Stankey's selection "completes the final phase of a succession planning process that AT&T's board began in 2017, which included a thorough evaluation of internal and external candidates." 

AT&T's human resources committee in charge of the search was led by Director Beth Mooney, and was comprised entirely of independent directors and supported by outside consultants, the company said. The group conducted "an extensive five-month search process to ensure that the company's next CEO possessed the vision, experience, talent and leadership qualities necessary to deliver on AT&T's strategic plans," AT&T added. 

During his tenure as AT&T's top media executive, the telecom lost more than 30% of its pay TV scale to cord-cutting. The telecom seemingly has little to show for its $50 billion purchase of DirecTV in 2015. And its ambitious effort to create an SVOD service to compete with Netflix has a long way to go before it's proven successful. 

Still, Elliot Management--which has pushed for changes at AT&T--has apparently signed off on Stankey.

“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,” Elliot Management said in a statement. 

Added Stankey: “I’m honored to be elected the next CEO of AT&T, a company with a rich history and a bright future. My thanks go to Randall for his vision and outstanding leadership during a period of tremendous change and investment in the core capabilities needed to position AT&T well for the years ahead. And I appreciate the Board’s confidence in me leading the company during our next chapter of growth and innovation in keeping people connected, informed and entertained. We have a strong company, leading brands and a great employee team, which I’m privileged to lead. I couldn’t be more excited about the new opportunities we have to serve our customers and communities and create value for our shareholders.”