Clearwire Replaces CEO Bill Morrow in Management Overhaul
Stock Chart for Clearwire Corp (CLWR)
Clearwire Corp. (CLWR), the money-losing wireless broadband provider, named Chairman John Stanton as interim chief executive officer effective immediately, after Bill Morrow resigned for personal reasons.
Stanton, 55, will continue to serve as head of the company’s board, the Kirkland, Washington-based company said today in a statement. Chief Financial Officer Erik Prusch will become chief operating officer, taking responsibility for day- to-day operations, sales, marketing, network operations, customer service and other aspects of the business.
Last month, Clearwire predicted improving earnings that could eliminate the need for additional financing. The company had struggled to meet its funding needs, telling investors it could run out of cash by midyear before raising $1.3 billion in bonds in December.
“Over the last few days, Bill made this decision for personal reasons; I tried to talk him out of it,” Stanton said in an interview. “It’s personal reasons. I’m not sure I understand them all.”
He and Morrow are going to speak to employees about the announcement together this afternoon, Stanton said.
Hope Cochran, Clearwire’s treasurer, will take over Prusch’s duties as finance chief. Chief Commercial Officer Mike Sievert and Chief Information Officer Kevin Hart will leave the company after a transition period. The company said those departures are unrelated to Morrow’s resignation.
Clearwire rose 37 cents to $5.75 in Nasdaq Stock Market trading at 4 p.m., and had gained 12 percent this year.
The company has been in a dispute with Sprint Nextel Corp. (S), which owns more than half of Clearwire, over pricing for the wholesale wireless services that Overland Park, Kansas-based Sprint resells to its customers.
Clearwire has slowed its network buildout while it awaits new sources of funds, and the company may not be able to pursue new financing until the dispute with Sprint is resolved, the company has said. An executive like Stanton may be able to end the disagreement and lead the company to new deals, said Jonathan Chaplin, an analyst at Credit Suisse Group AG.
“The guy’s a legend,” said New York-based Chaplin, who rates Clearwire shares “neutral” and doesn’t own any. “When you’re in the process of very difficult negotiations with Sprint and others in the industry, Stanton’s got very good relationships. He’s very much a statesman. He’s a great person to have at the reins.”
Stanton was CEO of VoiceStream Wireless Corp. when it was sold to Deutsche Telekom AG (DTE) in 2001, creating T-Mobile USA Inc. He was also CEO of Western Wireless Corp. when it was sold to Alltel Corp. in 2005.
Morrow will be paid a lump sum payment of $900,000 and another $900,000 in three installments for acting as a consultant during a transition period. The executive will also receive health benefits for a year, according to a regulatory filing.
“The relationship is healthy; the company is healthy,” said Morrow in an interview, declining to comment on the reasons for his departure. “It’s all good.”
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