Guinn Retires From PacTel; Ginn Takes Over
Donald E. Guinn, Pacific Telesis’ 55-year-old chairman and chief executive, has stepped down after presiding over the firm’s annual meeting, passing leadership of Pacific Bell’s parent to top lieutenant Sam L. Ginn, 51.
Guinn, more than any other single person, was responsible for transforming Pacific Telephone from Ma Bell’s sickly stepchild into a strong and profitable independent entity after the 1984 breakup of the Bell System. He had announced his plan to retire in 1988 last July, when he named Ginn president and chief operating officer--not to mention heir apparent--but the precise date was not revealed.
Pacific Telesis’ directors elected Ginn, a 28-year veteran of the Bell System, to succeed Guinn at a board meeting just prior to addressing the shareholders gathered in the Masonic Auditorium on San Francisco’s Nob Hill.
“Sam knows today’s technology, and he knows today’s marketplace,” Guinn said. “He’s the right leader to bring Telesis and its customers into the thick of the information age.”
Before moving into the No. 2 slot last summer, Ginn had headed PacTel Corp., parent of a portfolio of diversified subsidiaries in largely unregulated activities. These range from mobile phones and electronic paging to real estate development, office products and consulting. Pacific Telesis’ official biography describes Ginn as “chief architect of the corporation’s diversification strategy.”
Guinn, who served as Pacific Telesis’ chairman since “divestiture day,” Jan. 1, 1984, spent 33 years in the telephone business, starting as an assistant engineer for Pacific Telephone & Telegraph, forerunner of Pacific Bell, in Portland, Ore. By the time he became chairman of Pacific Telephone in August, 1980, the company had the the heaviest debt and had the least profit of all the Bell operating companies.
On the eve of AT&T;’s divestiture of local phone operations, Pacific’s debt ratio stood significantly above 50% of total capital, and Guinn--in tough bargaining with AT&T; over the division of assets and liabilities--got the parent to assume hundreds of millions in Pacific Telephone’s debt, dropping the ratio to 46.5%. That figure now stands at about 43%, and the company can pay for what it needs without borrowing.
‘Tough Act to Follow’
A shareholder who bought Pacific Telesis stock when it began trading in November, 1983, would have earned a total return of 154%, according to Guinn’s calculation. (However, that return could have been realized when the stock peaked in August, 1986, before remaining fairly static since, observed Robert B. Morris III, who follows the company for Prudential-Bache Securities.)
“I’ve got a tough act to follow,” Ginn acknowledged on succeeding Guinn, “but Pacific Telesis today is in the strongest financial and operating position in its history. The challenges will be to capitalize on the opportunities of California’s--and the nation’s--high-growth information markets, to reshape the regulatory process to bring it in line with today’s realities, and to continue providing the best telephone service anywhere.”
