(Reuters) – Veteran John Stankey will take over as AT&T (T.N) chief executive officer, the company said on Friday, as the U.S. telecommunications and media giant grapples with the impact of the coronavirus outbreak and its late entrance into the global streaming wars.
Stankey will take over on July 1 from Randall Stephenson, who said on Friday he will retire from the CEO position but will serve as executive chairman of the board until January 2021.
The announcement, made during AT&T’s virtual annual shareholder meeting, drew a sharp response from U.S. President Donald Trump, who tweeted it was “great news” that Stephenson was leaving.
“Anyone who lets a garbage “network” do and say the things that CNN does, should leave ASAP. Hopefully replacement will be much better!” he wrote.
Stankey oversaw WarnerMedia after AT&T’s $85 billion purchase of media company Time Warner, as well as the creation of HBO Max, the new streaming service that will launch May 27. He was also promoted to COO last year.
AT&T, which faced some criticism from HBO fans and the creative community, is betting the service can achieve wider appeal with hit shows like “Friends” while hanging onto more sophisticated audiences with “Succession” and similar shows.
AT&T’s board reviewed both external and internal candidates for the CEO role as part of a succession planning process started in 2017, Stephenson said.
“After an extensive evaluation, it was clear that John Stankey was the right person to lead AT&T into the future,” he said.
New York-based activist investor Elliott Management called for a shake-up at AT&T last fall, urging the company to end its buying spree and improve its operating businesses. The hedge fund also questioned Stankey’s leadership skills and AT&T’s desire to promote him to the top role.
By late October, AT&T struck a truce with Elliott and unveiled a three-year plan that included selling up to $10 billion worth of businesses, paying off debt and adding two new board members.
Elliott said Friday it supports Stankey’s appointment to CEO.
“We have been engaged with the company throughout the search process, which was a robust one, including a range of highly qualified outside candidates and overseen by independent directors,” said Jesse Cohen, a partner at Elliott Management. “We look forward to working with John as he begins his term as CEO.”
A continuing challenge for Stankey will be to stitch together AT&T’s media business with its phone, TV and internet products, to create an advertising powerhouse. Brian Lesser, who led AT&T advertising unit Xandr, resigned last month.
“My commitment is, you’ll get my best from me every day,” Stankey said.
His appointment should come as no surprise, one investor said. “Stankey has been running the company for at least the past few months. This has been well telegraphed to the market,” said Sam Hendel, president and a co-portfolio manager at investment firm Levin Easterly, which owns 1.93 million AT&T shares.
On Wednesday, AT&T pulled its financial forecast for the year and said the coronavirus pandemic clouded its view for the foreseeable future.
AT&T shares were down marginally at $29.45 in afternoon trading.