At & T Surprise Candidate To Replace Robert Allen

Neither Michael Armstrong, President of Hughes Electronics Corp nor William Esrey, chief executive of Sprint Corp are in contention, despite broad press speculation. The sources declined to identify the true candidate.

AT&T declined comment, as did Korn Ferry International and Spencer Stuart, the executive search firms involved.

AT&Ts board met earlier in the day to examine a slate of candidates put forward by the executive search groups for the post of president and chief operating officer, and sources expect an announcement in the next few days. AT&T reports its third quarter results on Thursday.

The search had already been narrowed to a critical few and the board, not just Bob Allen, will make the final decision, said one source, declining to be identified.

 

The post is vacant after Alex Mandl resigned in August to head a tiny new wireless company, Associated Communications.

One possibility is that Allen would split out the role of chief executive to the new candidate in a year or so but retain his chairmanship until nearer retirement.

Allen, a 32-year AT&T career veteran would be reluctant to depart early, but in a recent press interview said he would consider it if a perfect candidate came along. AT&T wants a world class marketer and technologist, with considerable experience of leading a major business, one source said.

It is unclear yet whether AT&T will give a clear succession timetable in the announcement for the new post.

Armstrong, Esrey, Eastman Kodak Co chairman George Fisher and James Barksdale, chairman of Netscape Communications Corp, have ruled themselves out of the candidature, but this has not stopped the speculation.

Expectation of an earlier end to Allens career has been fanned by AT&Ts profit warning in September in which it said earnings per share for the third quarter may be 10 per cent below analysts expectations.

The warning crowned a bad year for the largest US telecom firm.

AT&T incurred the wrath of politicians and the media for announcing 40,000 job cuts in January, but an improved stock performance it was meant to produce has not appeared.