Verizon Wireless Head to Be Chief Operating Officer
Verizon Communications named Lowell McAdam as its president and chief operating officer, setting the veteran wireless executive up as a successor to Chief Executive Ivan Seidenberg.
The move was part of a broader management shuffle ahead of Seidenberg's expected retirement next year, including the naming of Francis Shammo to replace Chief Financial Officer John Killian, who announced his retirement last week.
Analysts said that after serving as COO, McAdam, the current CEO of Verizon Wireless, would be a good successor to Seidenberg considering the strong performance of the wireless venture of Verizon and Vodafone under McAdam's rein.
However, Verizon investors barely reacted after the news as McAdam is not seen bringing big strategy changes to Verizon.
Piper Jaffray analyst Christopher Larsen sees McAdam, 56, staying as COO for about a year before becoming CEO of Verizon, whose growth is dependent on Verizon Wireless and its FiOS television and Internet business.
"I think they appointed Lowell to that position because they don't want to change the world for Verizon," said Larsen.
One longstanding question for shareholders has been whether Verizon succeeds in buying the 45 percent of No 1 U.S. mobile business Verizon Wireless owned by Vodafone. Some have speculated that Verizon may end up buying all of Vodafone, but Seidenberg has said such a deal would not make much sense.
Vodafone shareholders have been putting pressure on the company to sell the investment, from which it does not receive a dividend. But while Seidenberg has made no secret of his ambitions to buy back the stake, Verizon has not managed to agree to reach an agreement with Vodafone.
This will still be on McAdam's agenda if it is not achieved before he becomes CEO, said Larsen who expects that, like Seidenberg, McAdam would only agree to "a prudent price."
Seidenberg, who started out as a cable splicer's assistant more than 40 years ago at a Verizon predecessor company, will turn 64 in December. Verizon described McAdam's appointment a "an important step in the succession process."
The company did not say when Seidenberg will retire. There is no mandatory retirement age but its CEOs typically retire at 65.
McAdam, who has been Verizon Wireless CEO since 2007, will take on his new role as COO Oct. 1 and will be replaced at Verizon Wireless by its current COO Daniel Mead.
Wachovia analyst Jennifer Fritzsche said in a research note that McAdam has "tremendous credibility with the street and an outstanding track record, especially in the area of wireless."
"Such timeliness should remove any type of overhang on the shares related to this issue," Fritzsche said.
Verizon also named Francis Shammo, 49, currently the head of its wireline telecommunications business, as its next CFO, effective Nov. 1. Shammo succeeds Killian, 55, who last week announced he will retire around the end of the year.
Killian told investors at an analyst conference last week that he and McAdam had been identified by Verizon as potential successors but that he decided to retire for family reasons.
Verizon also announced that Verizon Wireless Chief Marketing Officer John Stratton would become the venture's COO, succeeding Mead, 57, effective also on Oct 1.
The company expects to announce a replacement for Shammo in due course, spokesman Peter Thonis said.
Verizon shares were up less than 1 percent on the New York Stock Exchange.