By Sarah Ellison, contributor
While Ivan Seidenberg got his start as a cable splicer’s assistant, working hands on with the copper wires and fiber-optic lines that were once the phone company’s core business, his handpicked successor, Lowell McAdam, 56, has spent the bulk of his career in the wireless industry — Verizon’s new core. Last year wireless accounted for 58% of Verizon’s annual revenue, up from 50% in 2008.
McAdam, who became president and chief operating officer of Verizon (VZ) on Oct. 1, says, “I’m a very roll-up-your-sleeves guy. I need to learn to be the CEO.” He’ll have plenty of time to study. Seidenberg hasn’t set a specific date for the handover, though he tells Coins2Day he plans to step aside sometime in 2011.
Like Seidenberg, McAdam is an industry lifer: After graduating from Cornell, he took a job as an engineer with Pacific Bell, which is now part of AT&T (T). In 1993 he signed on with Pac Bell’s mobile-services business, which was eventually spun off before becoming part of Vodafone, and later the Vodafone-Verizon wireless joint venture.
That joint venture, which McAdam helped nurture during his four-year tenure as president and CEO of Verizon Wireless, could prove to be one of McAdam’s first big tests as CEO. Vodafone owns 45% of the venture but hasn’t received a dividend from its share of Verizon Wireless’s cash flow since 2005 because the wireless venture has been paying parent Verizon for loans it took out to buy wireless licenses and Alltel Corp. The upshot: McAdam will need to decide whether and when to pay Vodafone a dividend or try to renegotiate the companies’ relationship. It isn’t a trivial decision: Verizon’s 6% dividend yield is the highest of the Dow 30 companies.
McAdam nonetheless says he feels good about the company he’s about to inherit. A tinkerer who repairs cars and motorcycles in his spare time, McAdam uses an analogy a gearhead would love: “Ivan got all the tools and put them into the toolbox,” he says. “Now it’s up to us to take those tools and apply them to take the company to the next level.”
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