×
You will be redirected back to your article in seconds

Verizon Names CTO Hans Vestberg Next CEO, Replacing Lowell McAdam

Lowell McAdam is stepping down as CEO of Verizon Communications on Aug. 1, to be replaced by former Ericsson chief exec Hans Vestberg, the telco announced Friday.

McAdam, 64, will serve as executive chairman of the board through his retirement from Verizon at the end of the year, at which time he will become non-executive chairman. His exit has been widely expected on Wall Street, but the company hadn’t provided a clear picture of the succession plan.

Now Verizon’s board has made its choice: Vestberg, 52, who joined the company a little over a year ago as CTO and EVP/president of global networks. Vestberg (pictured above) previously served as Ericsson’s president and CEO for six years.

“For Verizon, the time for a change in leadership is now, and I am confident that Hans is the right person to bring Verizon through its next chapter,” McAdam said in a statement, calling Vestberg “an energizing force” at the company.

Vestberg, a native of Sweden, had spent virtually his entire career at Ericsson. After joining the telecommunications-equipment maker in 1991, he was named CFO in 2007 and then CEO in 2009. Ericsson ousted Vestberg in July 2016 after the company missed financial targets several quarters in a row.

The changeover comes as Verizon’s rivals in the wireless and telecom space are engaged in transformational M&A deals. AT&T is trying to swallow Time Warner, with a ruling expected June 12 in the DOJ’s lawsuit to block the acquisition. Meanwhile, after years of back-and-forth, T-Mobile and Sprint announced an agreement to merge.

McAdam has been loath to pull the trigger on a big M&A play, with Verizon instead making relatively smaller deals for internet media players AOL (for $4.4 billion) and Yahoo ($4.5 billion). By picking Vestberg to lead Verizon, the board is signaling the focus will continue to be investing in wireless networks and technology — specifically, building out a nationwide 5G broadband network — rather than media.

“Despite Mr. Vestberg’s short tenure thus far at [Verizon], we believe the decision to make him the successor to McAdam makes sense given Vestberg likely has the best vision among executives ahead of a massive 5G inflection,” CFRA Research analyst Angelo Zino wrote in a note. He maintained a “hold” recommendation on the stock.

McAdam is set to give up his role as Verizon’s CEO exactly seven years after he was named to the job on Aug. 1, 2011. He was previously Verizon’s president and COO, overseeing wireline and wireless operations, and before that was CEO of Verizon Wireless from 2007 until 2010 (which he joined in 2000). Earlier in his career he worked for cellular carriers PrimeCo and AirTouch Communications and held management roles at Pacific Bell.

[UPDATE: Just hours after naming Vestberg to the CEO role, Verizon announced that EVP of global operations John Stratton is stepping down from his role immediately, serving as an adviser to McAdam before leaving at the company at the end of 2018.]

With his appointment as Verizon CEO, Vestberg’s base salary will increase to $1.5 million (up from $807,497 in 2017), according to a regulatory filing. The exec’s target short-term incentive opportunity will increase from 150% to 250% of base salary, and his target long-term incentive opportunity will increase from 600% to 800% of base salary. Vestberg also will get a one-time stock grant worth about $10 million as of Aug. 1, 2018, when the CEO switch takes effect.

Read McAdam’s memo to Verizon employees about the CEO transition:

V Team,

I have something I’d like to share with you. I’ve been with our company and its predecessors for 35 years, and your Chairman and CEO for the past seven. Today, marks the beginning of an important series of events for Verizon. We are announcing that Hans Vestberg will succeed me as the Chief Executive Officer on August 1st. I will serve as Executive Chairman of the Board through the end of the year, and then continue as Chairman of the Board in a non-Executive capacity starting in 2019.

This is an exciting period for Verizon, and I believe there is no better time for this transition than now. It is my pleasure to hand the reins over to Hans. Hans is a recognized executive in the telecommunications and technology industries, and since joining Verizon in early 2017 he has demonstrated his ability to innovate and execute. I know that he has the right expertise, experience and business acumen to lead us forward and build on our strategy. Importantly, Hans is an inspiring leader, with high energy and a passion for delivering on the core values that truly make Verizon the world leader it is today.

When I look back at the milestones throughout my career, the one that stands out most is Verizon’s transformation into a world-class technology company. Today, Verizon is one of the world’s leading providers of communications, information and entertainment products and services to consumers, businesses and governmental agencies. Our goal has always been to improve lives through innovation. As I think about the power of 5G, I am convinced that this is a significant and pivotal time for Verizon and our entire industry – and now is the time to bring Verizon into its next chapter.

It has truly been a pleasure and a privilege to lead this great company. I am incredibly proud of what we have accomplished together. I look forward to continuing to play a part in its future as Executive Chairman of the Board, and I have tremendous confidence in where Verizon is headed with your support and Hans’s leadership.

Thank you for your dedication to Verizon. And never forget, there’s always a higher gear.

Sincerely,

Lowell

More Digital

  • Alibaba Buys 8% Stake in Chinese

    Alibaba Buys 8% Stake in Chinese Video Platform Bilibili

    Alibaba has purchased an 8% stake in the Chinese online video platform Bilibili, the official Xinhua news agency reported. Bilibili is one of China’s top video streaming and entertainment platforms, with about 92 million monthly active users and 450 million page-views per day. Founded in 2009, it was listed on the NASDAQ last March. Alibaba’s [...]

  • Clevver-Logo

    Hearst Magazines Buys Clevver's Pop-Culture YouTube Channels After Defy's Demise

    Hearst Magazines has snapped up Clevver, a network of female-skewing lifestyle and pop-culture news YouTube channels that had been owned by now-defunct Defy Media. Clevver was left homeless after Defy’s sudden shutdown in November; its principals said at the time they were looking for a new home. Hearst Magazines sees a digital fit with Clevver’s [...]

  • "Brother" -- Episode 201-- Pictured (l-r):

    CBS Interactive's Marc DeBevoise on Streaming Boom, Content Strategy, and Apple

    Not everyone wants or needs to be Netflix to succeed in the streaming space. And not everyone sees Apple’s enigmatic new service as a threat. Even as rival streaming services offer gobs of content, CBS Interactive’s president and COO Marc DeBevoise sees the company’s targeted original programming strategy continuing to attract viewers to its All [...]

  • Rhett-Link-Good-Mythical-Morning

    Rhett & Link's Mythical Entertainment in Talks to Acquire Smosh (EXCLUSIVE)

    Smosh, the YouTube comedy brand left stranded after parent company Defy Media went belly-up, may be about to get a new business partner. Mythical Entertainment, the entertainment company founded by top YouTube comedy duo Rhett & Link, has been in talks about acquiring the Smosh brand, sources told Variety. Multiple potential buyers came forward to [...]

  • Pokemon Go

    Proposed 'Pokémon Go' Lawsuit Settlement May Remove Poké Stops, Gyms

    A proposed settlement in the class action lawsuit against “Pokémon Go” developer Niantic could remove or change a number of Poké Stops and Gyms in the popular augmented reality game. The proposed settlement was filed in a California court on Thursday and applies to anyone in the U.S. who owns or leases property within 100 meters [...]

  • Skyline of Doha at night with

    Qatar's beIN Rallies Support From U.S. Companies Against Pirate Broadcaster beoutQ

    Qatari powerhouse beIN Media Group has rallied support from American sports and entertainment entities, including Discovery and Fox, behind its request that the U.S. government place Saudi Arabia on its watch list of top intellectual property offenders. The Doha-based broadcaster, a state-owned spinoff of Al Jazeera news network, accuses the Saudi government of harboring pirate broadcaster [...]

More From Our Brands

Access exclusive content