Upbeat Mood at Pacific Telesis Annual Meet

Pacific Telesis Group, which inherited Pacific Telephone’s local network and other assets 16 months ago, threw its first annual meeting Friday--just two days after its former parent, AT&T;, held its 100th.

The theme was the new company’s future, not the old Bell past, Chairman Donald E. Guinn emphasized, telling reporters: “Then’s then; now’s now.”

And what’s now, Guinn later told about 675 shareholders gathered at Civic Auditorium, is a company whose stock has appreciated 37% since trading began on Nov. 21, 1983, with dividends boosting the return to 50%. “And,” he added, “the best is yet to come.”

Guinn recalled that some analysts had wondered publicly whether Pacific Telesis, whose predecessor was sometimes called “the poor stepchild of the Bell System,” would be able to compete without Ma Bell’s support.

“They’re not saying that now,” he said.

Guinn noted that, so far, only the two local telephone companies, Pacific Bell and Nevada Bell, are contributing to the parent firm’s earnings--$829 million in its inaugural year and $224 million in the first quarter of 1985. But the half a dozen unregulated new companies begun as a result of the Bell breakup have generated modest revenue of about $60 million last year and more than $33 million so far this year, Guinn said.

“These are investments in long-term earnings,” he told reporters. “We expect to realize a substantially greater return on the assets invested than the operating companies (Pacific and Nevada Bell).”

But Pacific Telesis, which so far has diversified by starting new companies--in contrast to other former Bell companies’ strategies of pursuing acquisitions--expects to acquire at least one profitable new subsidiary this year, Vice Chairman Sam Ginn, who heads the PacTel group of companies, said in an interview.

Each of the unregulated subsidiaries has broken with the vaunted Bell System’s highly centralized, top-down management style, he said. Each has its own headquarters and management, and financial incentives are an important part of their executives’ compensation, he said.

For example, PacTel Mobile Access, which is based in Costa Mesa, achieved a management “milestone” last year in starting the Los Angeles cellular radio network in time for the 1984 Olympic Games--an achievement that earned its president a 10% bonus, Ginn said.