AT&T CEO David Dorman to leave after SBC acquire AT&T

AT&T CEO David Dorman has confirmed the rumors in the market that he is not likely to continue after AT&T is acquired by SBC. Instead, he would opt for nearly $20 million in severance pay and consulting fees rather than a subordinate post at the combined company. Dorman is also the chairperson of the company would however continue to serve as president of the merged company and a member of its board of directors “for a brief transition period”.

After that, he is expected to resign from both the positions. Ed Whitacre, SBC’s CEO, is slated to hold both those posts at the combined company. The merged company is expected to continue assume the AT&T brand name. Randall Stephenson, Whitacre’s top deputy and heir apparent is likely to become the new chief operating officer of the new AT&T.

AT&T representative Andrew Backover said in a statement: “Dave made it clear that he wanted to be considered as Ed’s successor, and that’s not going to happen according to the SBC board’s management succession plan. Dave respects the board’s decision, wishes the new AT&T the very best and will work hard to make the transition a smooth one.”

Dorman will be paid $10.3 million in severance and 400,000 shares of SBC stock over the course of the three-year consulting contract. Dorman also will receive early access to $17.7 million worth of options and shares that he would have gotten over the next several years, based on the $19.71 value assigned to AT&T’s shares in the SBC merger agreement.