Investors may pout. But the new CEO, and former Embarq chief, may have what it takes to get the wireless provider back on trackA little more than two months after Sprint Nextel (S) booted former Chief Executive Officer Gary Forsee amid declining subscriber rolls and flat revenue, the company announced on Dec. 18 that Daniel Hesse would take over immediately as its new chief. For a company so down on its luck as Sprint, having lost market share and customer goodwill in recent months, officials might have thought the news would be a pre-holiday gift for shareholders.
Wishful thinking. Hesse's appointment hit like a thud on Wall Street, with shares slipping about 1% to 13.76. What gives? Investors may have been hoping that the board would simply sell the company instead of hiring someone to tackle the long, arduous task of getting it back on track. And if the board was going to hire a new chief, shareholders may have been wishing for a big-name executive instead of Hesse, formerly CEO of the little-known Sprint spin-off Embarq (EQ). "He has a decent track record, but he is not a rock star," says Shahid Khan, partner at IBB Consulting.
Not that Sprint didn't try. Wall Street insiders say Sprint's board of directors approached at least four other telecom executives before offering the job to Hesse. They included Ralph de la Vega, chief executive of AT&T's (T) wireless business, and Dennis Strigl, chief operating officer of Verizon Communciatons (VZ) and former CEO of Verizon Wireless. Both declined to pursue the position. Neither could Sprint lure top managers or former execs at European standouts Orange Group and Vodafone (VOD), according to executive recruiters.
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