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AT&T phones ahead
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October 23, 1996: 9:56 p.m. ET
Allen, heir apparent Walter team up to lead company for the future
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NEW YORK (CNNfn) - AT&T Wednesday prepared to set itself on a new leadership course Wednesday by naming John Walter, chairman of printing company R.R. Donnelley and Sons, as its new president.
The announcement of Walter, who is the heir apparent to Chairman Robert Allen, surprised many on Wall Street since Walter is not a well-known executive.
But Allen, appearing with Walter on Moneyline with Lou Dobbs, said AT&T carefully evaluated the available candidates and is pleased with its choice.
"There was no doubt about the selection. We looked at a wide variety of candidates with a lot of skills. This is a decision we and the board made for the long term and not just a bump in the stock market," Allen said.
Walter's successful track record at Donnelley, the world's largest commercial printer, caught Allen's eye.
AT&T would not reveal Walter's salary, but the company did say the main part of his compensation package would be tied to performance.
Donnelley's last proxy filing showed Walter earned $900,000 plus a $555,000 bonus and other annual compensation of $36,427 in 1995.
Analysts said besides the fact that he's not well known, they were concerned that 18 months would not be enough time for the handover.
"My first reaction was John who?" said David Goodtree, an analyst with Forrester Research.
Allen said he and Walter would work together to head up several divisions, and in January 1998, they would split the duties of chairman and CEO. Walter will become chairman of the company later that year.
Walter said he was happy at Donnelley and was not looking to leave the firm before he was approached by AT&T. However, AT&T proved to be the company that peaked his interest.
"It's an opportunity of a lifetime. After 27 years with Donnelley and nine as a president and CEO, I had the desire and ambition to do more."
Walter will assume his new position and his seat on the company's board Nov. 1. He replaces Alex Mandl, who resigned in August to head Associated Communications, a small wireless communications company.
As for how their views on what's best for AT&T compare, Allen said he and Walter haven't had time to examine them in depth. However, the two do agree the giant telco does need to develop a clear focus that will guide it into the 21st century.
"I think our image and vision are the same on the strengths, assets and direction we want to take the company.
"We need to have focus. We can't do everything we would like and certainly can't do it in a timeframe that the marketplace demands. By working together, we'll find the right answer and put (AT&T) on a course to be successful," Allen said.
Like Allen, Walter said he believes there are tremendous opportunities to grow and build the company. He plans to implement that strategy using the style that has made him a success.
"I believe in building. There's a tremendous opportunity to build, grow and grow profitably. I have my own style. I'm direct. What you see is what you get," Walter said.
Allen said Walter's appointment does not put any pressure on him to leave. He said the announcement coincides nicely with his long-term plans.
"I have always said 10 years is long enough. I will reach that in 1998. It works out particularly well for AT&T and shareholders," he said.
Allen said he was happy with what he has accomplished at the helm of AT&T. However, he said it is unfortunate that the name AT&T has become associated with large-scale layoffs. He said those layoffs taught him that even at his age, there are lessons to be learned. (464K WAV) or (464K AIFF)
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