Akerson Exits XO
XO Communications Inc. (OTC: XOXO) announced today that its chairman and CEO, Daniel F. Akerson, will resign once the company completes its restructuring, which it says should happen sometime next month (see XO CEO to Resign).
According to an XO announcement today, Akerson, who has been chairman and CEO since he joined the company in 1999, is leaving to pursue other business interests and (of course) to spend more time with his family. Analysts, however, say this is a typical case of a struggling carrier shedding its management in the hope that it will also shed its tarnished image (for other examples, see Is Capellas Right for WorldCom?, Qwest Purge Continues, Can Breton Fix France Telecom?, WilTel Names Storey CEO, and AT&T 's Armstrong Era Ending , for starters).
“This is the normal ‘I’m being forced out but don’t want to say it' statement,” says Craig Johnson, an independent analyst based in Oregon. “The march continues of CEO’s going out the door… They all get huge dollars to disappear.”
The financial conditions surrounding Akerson’s departure have yet to be finalized, according to XO spokeswoman Kara Palamara. Since he is staying with the company until it reemerges from bankruptcy, it does seem clear, however, that Akerson will still receive the $750,000 bonus provisioned for in XO’s Chapter 11 restructuring plan. According to SEC filings, the "emergence bonus" equals 150 percent of Akerson’s annual base salary. Akerson couldn’t be reached for comment by press time.
Once he has stepped down, Akerson will continue to function as a consultant to XO, the company said in a statement.
There have been rumors of Akerson leaving the company for a while. Last month, he was pegged as one of the more likely candidates to take over as CEO of WorldCom Inc. (OTC: WCOEQ). Former Hewlett-Packard Co. (NYSE: HPQ) president Michael Capellas was chosen for that job instead (see Michael D. Capellas).
XO would not reveal if it has lined up any candidates to take Akerson’s place. The company also would not comment on whether it is expecting further management changes. Johnson, however, says that much of the remaining management team is sure to follow. “When the main guy goes, usually all of his lieutenants aren’t far behind,” he says.
XO, which filed for Chapter 11 bankruptcy protection in June of this year, announced last month that its restructuring plan had been approved in a New York bankruptcy court (see XO Finally Files for Bankruptcy and Court OKs XO Reorg Plan). The plan is still subject to approval by state and federal regulators, the carrier says.
The restructuring plan leaves financier Carl Icahn in charge of more than 80 percent of the company. Icahn’s role in the company once it reemerges is still to be determined, according to Palamara.
“He’ll be the one who puts the person in charge,” Johnson says. “Usually, his regime is in place pretty quickly. He’s the type of guy who wants to get a good return on his money.”
— Eugénie Larson, Reporter, Light Reading