AT&T's David Dorman, 51, will serve as president of the combined company, which will take the famed AT&T name, and join the board of directors. Yet he'll resign as chief after a "brief transition period."
By doing so, Dorman would be eligible for a generous $10 million severance package. He'll also be able to exercise millions of dollars in stock options in a shorter time frame.
SBC's chief executive and chairman, Edward Whitacre Jr., will continue in those roles. SBC's pending acquisition of AT&T, announced in January, is expected to close before the end of 2005. Federal regulators recently approved the deal.
The second in command at SBC, Randall Stephenson, will retain his position as chief operating officer. The departure of Dorman could pave the way for Stephenson, 45, to eventually move up to the top job. He's widely viewed as the potential successor to the 64-year-old Whitacre.
Dorman had hoped to be considered as Whitacre's replacement, but he decided to leave early once it became clear that he was not in the running. He'll serve as a consultant to the new AT&T for an unspecified period.
The only senior AT&T executive slated to get a spot in the combined company's new hierarchy is James Cicconi, a lawyer and experienced Washington hand who has directed Ma Bell's lobbying efforts.
By absorbing AT&T, San Antonio-based SBC would become the nation's largest phone company by far, with tentacles reaching into every major segment of the U.S. communications market. The crown jewel of the deal is AT&T's market-leading corporate services business.
For AT&T, the merger saves the company from a potentially bleak future of declining sales and market share in the face of stiff competition from new communications companies or alternative technologies.
On Thursday, AT&T shares rose 19 cents to close at $19.84. SBC , a Dow component, gained 29 cents at $23.89.
This story was supplied by MarketWatch. For further information see www.marketwatch.com.
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