Prexy-CEO puts AT&T behind him
NEW YORK — AT&T Corp.’s driving mission to link cable and telephone services suffered a casualty Wednesday with the resignation of Leo Hindery as president and CEO of its cable TV business unit, AT&T Broadband & Internet services.
While Wall Street and industry players found Hindery’s departure rather sudden, no one was really surprised. The former Tele-Communications Inc. exec wasn’t all that comfortable with the layers of bureaucracy he found inside the giant long-distance company, and he had certain strategic differences with AT&T chairman C. Michael Armstrong.
AT&T acquired TCI last March for about $60 million as its first stop in building a giant cable empire. It subsequently agreed to buy cabler MediaOne for $54 billion, although this deal faces tough regulatory scrutiny and isn’t likely to close until the second half of next year. AT&T sees cable as the key wire into consumers’ homes, able to deliver local telephone service and high-speed Internet access, as well as long-distance and cable services.
Hindery, 51, called his departure “a soft, natural evolution from a merger of this size.” He will stay on at AT&T as a strategic adviser at least until the MediaOne deal closes.
“Leo’s a very action-oriented guy,” said Merrill Lynch analyst Jessica Reif Cohen. Hindery declined to comment on his future plans, but Reif Cohen and others expect they will be entrepreneurial, and assume he’s got many offers on the table already.
“At TCI, you ran your own department; at AT&T, there’s more interference,” agreed one cable industry insider, who said Hindery had complained that “Basking Ridge was taking over from Denver” — referring to AT&T’s New Jersey headquarters and TCI’s Denver stronghold.
Others likely to follow
Several Wall Streeters called Hindery the type of exec who “inspires loyalty” and said some of his lieutenants are likely to follow him out the door.
AT&T said board member Amos Hostetter will spend more time at the Broadband & Internet Services unit in Denver, working on its strategic development. Hostetter was previously CEO of MediaOne and is that company’s largest single shareholder.
Daniel Somers, AT&T’s chief financial officer, will temporarily assume operational control of the division.
AT&T said the search for a permanent successor to Hindery is on, but declined to comment further. Wall Streeters hope another cable exec will move into the post.
AT&T shares rose 3.6% to close at $45.63 in an up market Wednesday.
Hindery, who had a five-year contract, also declined to discuss his severance package, as did AT&T. Unconfirmed reports put the figure at something just shy of $200 million, although a big chunk of that would likely be from stock options.