Jeff Gardner Resigns As Windstream CEO, Former CFO Tony Thomas To Replace Him (UPDATED)

In an abrupt move announced late Thursday (Dec. 11), Windstream Holdings CEO Jeff Gardner resigned as the company leader and will be replaced by former CFO Tony Thomas effective immediately.

Gardner will serve as a senior advisor to Thomas and as a member of the board through Feb. 1, 2015 to “ensure an orderly transition.” Thomas had been tapped in July to lead a real estate investment trust (REIT) for Windstream’s fiber optic, copper network and other fixed assets, which was scheduled to spinoff in the first half of 2015.

A new search for a REIT CEO will begin now that Thomas will remain with Windstream.

A company press release portrayed some tension between Gardner and the board of directors over the direction of Little Rock-based Windstream. Indeed, CEO transitions normally are planned over a longer duration of six months to a year or more.

“I am proud to have led Windstream from its creation in 2006. It has been a privilege to work with our Board, leadership team and talented associates across the organization,” said Gardner. “The Board and I agree that a change in perspective is needed in order to accelerate the pace of change within the company and to more effectively respond to the rapidly evolving needs of our customers. The Board’s confidence in Tony is well placed. His leadership and strong financial acumen will benefit investors and customers as he leads Windstream in the future.”

Windstream’s board chairman Jeff Hinson said:

“On behalf of the Board, I thank Jeff for his contributions to the company over the past decade. He led the company’s successful spinoff from Alltel Corp. and its transformation from a rural wireline telephone business to a FORTUNE 500 company and nationwide provider of advanced network communications and technology solutions. He also has served as a leading advocate for the telecom industry. Tony Thomas’ telecom experience and in-depth knowledge of Windstream give the Board confidence that he is the right executive to lead the company, position the enterprise and consumer businesses for long-term success and drive revenue growth.”

Windstream’s financials have been in a slump. Its last three consecutive quarters have seen net income declines from the previous year and revenues have been sliding backwards compared to the previous year.

The company has made two layoff announcements this year. Windstream laid off 400 workers nationwide in February and another 350 workers in the last month. It also announced in August that COO Brent Whittington was resigning and would not be replaced.

NEW CEO CREDENTIALS
New Windstream CEO Tony Thomas, 43, has more than 20 years experience in the communications industry. As mentioned earlier, he was set to lead the spinoff REIT as CEO.

Thomas served as the chief financial officer for Windstream from August 2009 through September 2014. During his five-year tenure as CFO, Thomas played an integral role in Windstream’s expansion by completing seven acquisitions totaling more than $5.6 billion in transaction value.

Thomas joined Windstream as controller following the spinoff from Alltel Corp. He held a variety of financial and operational leadership roles at Alltel after joining the company when it merged with 360 Communications in 1998.

Before entering the communications industry, he was a senior auditor with Ernst & Young in the telecom practice. He holds a master’s degree in business administration from Wake Forest University and a bachelor’s degree in accountancy from the University of Illinois.

“I am honored by this appointment and by the Board’s confidence,” said Thomas. “It has been a privilege to work with Jeff Gardner throughout my career. I also remain intently focused on executing the REIT spinoff, which will enable Windstream to accelerate network investments, provide enhanced services to customers and maximize shareholder value.”

Shares of Windstream Holdings closed trading on Thursday (Dec. 11) at $9.38 per share. In after hours trading the company’s stock was up slightly to $9.44. During the past year, Windstream shares have traded between $7.18 and $13.30.

UPDATE: New CEO Tony Thomas acted quickly to name a number of new leadership positions with Windstream’s management.

On Friday morning (Dec. 12), Thomas announced that Bob Gunderman would serve as chief financial officer for the company, effective immediately. Gunderman has been serving as interim CFO since Oct. 1, when Thomas left that position to head up REIT operations. Gunderman will also retain his current treasury duties while the company conducts a search for a permanent treasurer.

“I am pleased to promote Bob to CFO. He is a skilled and seasoned finance leader with intimate knowledge of our business and the opportunities in front of us. Alongside our talented finance organization, Bob will play an integral role in driving improved operating performance and profitability at Windstream,” Thomas said.

Thomas also announced three executive appointments that he said would “align focus on key business segments and create a stronger organizational foundation” at Windstream.

• David Works, executive vice president and chief human resources officer, has been named president of enterprise.
• David Redmond, president of consumer, has been named president of consumer and small and medium business.
• Mike Shippey, senior vice president of carrier solutions, has been named president of carrier.

The presidents will have responsibility for sales, marketing, service delivery and customer care within their respective segments.

“Sharpening our strategic focus on our core segments, each led by accomplished and effective leaders within the company, will instill greater accountability for efficient, high quality performance,” said Thomas. “Additionally, the new structure aligns functions and responsibilities to better support the evolving needs of our customers and drive growth.”

BIOS
Windstream provided additional biographical notes on Gunderman, Works, Redmond and Shippey.

Bob Gunderman – Prior to being named interim CFO, Bob Gunderman was senior vice president and treasurer for Windstream with responsibility for all capital budgeting, forecasting, treasury and capital market functions, debt management, investor relations and risk management. He previously served as vice president of financial planning for the company.

He was vice president of internal audit for Alltel prior to joining Windstream in 2008. He served in various management roles at Alltel including vice president of revenue accounting and revenue assurance, director of financial planning and director of mergers and acquisitions. He was a senior accountant with Deloitte and Touche LLP before entering the communications industry in 1996.

David Works – Works joined Windstream in February 2012 as executive vice president and chief human resources officer. In this role, he was responsible for the company’s human capital strategy, talent acquisition, talent management, culture, employee and labor relations, compensation and benefits.

Works previously served as the chief human resources officer for Sears Holdings in Chicago. Prior to joining Sears, Works was a partner at ghSMART, which specializes in the assessment and coaching of executives at FORTUNE 500 companies. He also held positions with McKinsey & Company and Motorola. Works spent the first seven years of his career as an officer in the U.S. Navy, where he served on a fast-attack nuclear submarine.

David Redmond – Redmond was named president of consumer for Windstream in October 2013. Redmond had oversight of all consumer sales and service functions, including marketing, call centers and business development. He previously served as senior vice president of consumer services and, prior to that role, as vice president of consumer marketing for Windstream.

Redmond joined Windstream as vice president of distribution support in 2008. Previously, he had been sales and marketing director for Charter Communications and director of segment marketing for Alltel after holding a variety of positions with GTE Wireless.

Mike Shippey – As senior vice president of carrier solutions, Mike Shippey was responsible for carrier sales, marketing and product development for Windstream.

Prior to joining Windstream in February 2010, Shippey was president of CLEC operations for YMAX Communications. He previously held sales, operations and finance positions at Covista Communications, Excel Communications and Telco Communications Group.