Verizon names Hans Vestberg as new CEO

Hans Vestberg Lowell McAdam
Hans Vestberg, left, will succeed Lowell McAdam as CEO effective August 1. (Verizon)

Verizon CEO Lowell McAdam plans to retire from the company at the end of this year, and his successor will be Hans Vestberg, whose titles currently include CTO, executive vice president, and president of global networks. McAdam will serve as executive chairman of Verizon's board through the end of the year, at which time he will retire from the management team and become nonexecutive chairman of Verizon's board. 

Just two years ago, Vestberg was CEO of Ericsson as the vendor struggled to cut costs in the face of declining demand for its LTE infrastructure. Then in July 2016, Ericsson's board thanked Vestberg for his energy and leadership and said it was time for a new CEO to run Ericsson. Eight months later, Verizon said it had hired Vestberg to lead its newly created networks and technology team. Now Vestberg will lead the entire company.

"For Verizon, the time for a change in leadership is now, and I am confident that Hans is the right person to bring Verizon through its next chapter," said McAdam in a statement. "Hans is an energizing force who will continue to position Verizon to lead the Fourth Industrial Revolution—the emergence of technologies that blend the physical and the digital to create historic breakthroughs in connectivity and mobility." 

M. Frances Keeth, Verizon's lead independent director, said the board has been working for three years to identify Verizon's next CEO. She said the board was impressed by Vestberg's performance, track record, vision and "passion for innovation."

Vestberg has been in charge of Verizon's 5G initiatives, as well as its growing fiber network. The company said that Vestberg has shown "a willingness to disrupt established processes and practices to make Verizon stronger and more efficient." 

“I am humbled to be appointed CEO of Verizon at such an exciting and dynamic time for our company and industry," said Vestberg in a statement. "We are experiencing unprecedented changes in the way users interact in the digital world, and we are racing ahead to remain at the forefront of technology, connectivity and mobility."

Vestberg is stepping into a role that some people thought would be filled by John Stratton, EVP and president of global operations. In fact, not long after Verizon announced Vestberg as CEO, it announced that Stratton, executive vice president and president of Global Operations, informed the company of his decision to retire from the company by the end of this year.  

Stratton, 57, has served Verizon and its predecessor, Bell Atlantic Mobile, for more than 25 years, holding various executive-level positions.

Wells Fargo Analyst Jennifer Fritzsche said the choice of Vestberg speaks volumes about Verizon's future priorities. "When a company shifts from appointing an executive who has long overseen the recurring revenue aspect and 90%+ of its current revenue to one with more an equipment background it is very telling, in our view," Fritzsche wrote in a research note. "We have long thought the Verizon fiber build and focus on IoT was more significant than the Street may fully appreciate. We see this announcement as further evidence of this."