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Ed Whitacre Jr., the outspoken leader of AT&T (News - Alert), has announced that he will retire as chairman and chief executive in June.

 

AT&T is the largest U.S. provider of local and long distance services, and they currently serve over 62 million wireless customers. Furthermore, the company has a rather extensive VoIP service portfolios for businesses, enabling enterprises to migrate seamlessly between traditional and next-generation services. AT&T also claims to be the only communications provider to deliver interoperability with the world's five leading IP PBX (News - Alert) vendors

 

The announcement of Whitacre’s retirement came as a surprise to many in the industry.

 

AT&T’s COO, Randall Stephenson has been appointed by the company’s Board of Directors to replace the outgoing Whitacre.

 

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.

 

Whitacre began his rise to the top as an engineer at Southwestern Bell back in 1963.

 

Stephenson began his career with Southwestern Bell in 1982 working in information technology. He has held a series of leadership positions in finance and in 1996 was named controller for SBC Communications.

 

During the time that Stephenson was senior executive vice president and chief financial officer for SBC, the company reduced its net debt from $30 billion to near zero by early 2004, positioning the company to make strategic acquisitions of AT&T Wireless, AT&T Corp. and BellSouth (News - Alert).

 

Additionally, Mr. Stephenson has served as senior vice president, Performance Assurance and senior vice president, Consumer Marketing.

 

Stephenson takes the reins of AT&T at an interesting time. Years after it’s well-documented breakup at the hands of federal regulators, AT&T has pieced itself back together through various acquisitions.

 

Industry analyst Jeff Kagan shared his thoughts on Whitacre’s stepping down and what he meant to the industry.

 

“Just like the Texan he is, Whitacre rode AT&T from the smallest to the largest of the Baby Bells. There were three waves of change in this industry since the breakup in 1984.

 

“Now in 2007 we are watching the industry transform again. New companies and new competitors. The baby bells are gearing up to compete with the cable television companies for the whole customer. Customers will choose one and say goodbye to the other. That changes the marketplace dramatically.

 

“Years from now, no one will remember or care about all the change that occurred. They will just remember they used AT&T when they were a child, and they still use AT&T. There is something very important about that continuity, which we cannot put a dollar figure on. Whitacre will be remembered for that.”