After leading Frontier Communications into bankruptcy, Bernie Han is leaving the company with a United Kingdom telecommunications veteran to take his place as CEO starting next March.
Frontier installed Han as CEO entering December 2019, then filed for Chapter 11 bankruptcy protection last April. The Norwalk-based company is currently seeking approval from states to exit bankruptcy, including in Connecticut, where Connecticut Attorney General William Tong and union leaders have voiced skepticism over unanswered questions about its operating plan going forward.
Frontier has rejected the AG’s demand that the company guarantee it will keep its headquarters in Connecticut as a condition to having its bankruptcy approved, while giving no indication it has any plans to move elsewhere.
Incoming CEO Nick Jeffery, 52, has led Vodafone’s United Kingdom operations since 2016, previously heading up its Cable & Wireless subsidiary. Frontier will pay Jeffery a $1.3 million annual salary and a $3.75 million signing bonus, and he will be eligible for more than $8 million annually in additional bonus and equity awards. The company indicated it considered one or more existing Frontier executives for CEO, without specifying other candidates by name.
Jeffery inherits a broadbad company with billions of dollars in debt still on the books after exiting a bankruptcy that eliminated $11 billion in debt, while saving it $1 billion in annual interest payments in the years to come. While Frontier has failed to stem defections in its broadband, telephone and TV businesses, it reported a $15 million profit in the third quarter on revenue of $1.7 billion, down 4 percent from just three months earlier.
Frontier is pegging its prospects to rolling out fiber optic cable into neighborhoods to provide greater bandwidth than its copper lines can carry, even as rivals expand into other businesses like mobile plans. The company cites Connecticut among the states where it intends to invest in fiber going forward, telling state regulators is eyeing 10,000 initial endpoints statewide for the new gigabit-bandwidth service, and committing to reaching 100,000 locations over four years after clearing bankruptcy.
“Although it is still very early in the process, our (fiber) offer is very appealing to customers,” Han said Tuesday morning in a web conference call with investment analysts, during which he and other executives did not field questions. “Customers appear to welcome an alternative to cable. ... There are some signs of cable (companies) taking preemptive steps against us.”
Frontier took on a large chunk of debt executing former CEO Maggie Wilderotter’s deal to take over Verizon Communications territories in Florida, Texas and California. With Wilderotter having retired to run her family vineyard and inn east of Sacramento, Calif., Frontier promoted Dan McCarthy to the corner office to integrate the Verizon territories. McCarthy failed to put Frontier onto a growth trajectory before debt obligations became imminent, triggering the bankruptcy filing.
Whereas Han and McCarthy kept low profiles during their respective tenures running Frontier, Jeffery has been a vocal leader at Vodafone, both on the company’s official blog and through occasional posts on social media. In a post Tuesday morning on his LinkedIn page, Jeffery predicted “a bright future” for Frontier.
The Communications Workers of America is keeping an open stance on Jeffery’s hiring, according to Dave Weidlich Jr., president of CWA Local 1298 based in Hamden, who critiqued the compensation package in the context of benefits for rank-and-file workers. Weidlich added that Han had some success in instituting a better culture of customer service at Frontier, even with the challenges of managing a bankruptcy filing in the depths of the COVID-19 pandemic.
“There’s been a lot of practical things that [Han has] done that made common sense, ... that weren’t being done before,” Weidlich said. “Customer experience became a bigger priority with him, and small steps of progress were made. ... Bernie came in with a mission and got the ball rolling, and hopefully this guy picks it up.”