PCCW's Li says will consider hiring CEO next year
Richard Li, the embattled head of Internet and telecoms firm Pacific Century CyberWorks, said he will consider relinquishing his chief executive's duties while retaining his chairmanship after the company reports its results next year.
"I will consider that after the next full-year results announcement," Li told Reuters in a telephone interview late on Thursday.
The 34-year-old Li said he had pushed such a decision off until early next year because he wants to complete the company's integration after its purchase of Hong Kong's dominant telco last year for US$28.5 billion.
"We just had one transition, and right now I just have to stick with it and get it done for the first year, because we've merged the two companies and now were fine-tuning it, and to make another transition right now is really not wise," he said.
TOUGH TRANSITION
The transition from Internet whiz-kid to telecoms executive has been a rough one for Li, made more difficult by a stock market that turned harshly against both sectors.
Shares in PCCW have tumbled from a lofty HK$28.50 in early 2000 to HK$2.725 on Thursday.
Li, the second son of Hong Kong's richest tycoon Li Ka-shing, is PCCW's executive chairman and CEO, putting him in charge both of running the sprawling company and plotting strategy -- roles he said could each be full-time jobs.
He said it had been his plan all along to divide the two duties once PCCW was big enough, if the right person could be found for the CEO role -- "but this is a big 'if'. It has to be the right person."
Many company watchers have questioned whether Li is best-suited to run PCCW.
During a presentation by two senior PCCW executives to an institutional investor conference this week, one attendee asked them: "Has there been anything that Richard Li has done to add value to the combined group, and is he the best person to steer the company strategically going forward?"
One of those executives, PCCW chief financial officer David Prince, came to his boss's defence in a Thursday interview, calling him a "bold and decisive" executive who had surrounded himself with a mature, experienced team.
"The part that we are struggling with, along with the rest of the world, is how to really make an effective Internet model," Prince said.
SHOPPING FOR CUSTOMER FOCUS
Li said a new CEO, if hired, could come from either inside or outside PCCW, and would need to bring strong customer orientation. "That is more important than a relevant telecom background," Li said.
Asked if he would feel comfortable handing PCCW's operational reins to another executive, Li noted that he had done so at three of his companies in the past -- including the Star TV satellite network he later sold to Rupert Murdoch's News Corp .
But Li acknowledged that PCCW is such a large, complex company -- with some 16,000 employees -- that finding the right person for the job would be a challenge.
"This is a precious company to me," he said. "I would not just stuff any CEO in." Li is PCCW's biggest shareholder, with about 36 percent of the company's stock.
If a top operations executive were brought aboard and Li focused mainly on strategy, the arrangement would mirror that at his father's conglomerate, Hutchison Whampoa Ltd , where group managing director Canning Fok has broad operational responsibility while Li Ka-shing is chairman.
Paul Aiello, co-head of Asian telecoms and media investment banking at Morgan Stanley, who has been on both sides of the negotiating table with Li, said it is "unfair to judge him," given the global sell-off of telecom stocks and the fact that PCCW is new in its current form.
"However, an additional, well-experienced professional with extensive experience in the telecoms sector would certainly be a positive in shoring up investor confidence," Aiello said.
HARSH SPOTLIGHT
PCCW's woes -- the company posted a year 2000 net loss of US$886 million -- are made more glaring by the media spotlight that shines on Li, who was a Hong Kong celebrity long before he came to symbolise the rise and decline of Asia's Internet sector.
Asked if he thought his high profile was a distraction, Li said: "I think, to investors, yes. And that is undesirable, because what we would like investors to focus on is our cash flow, our customer growth, our cash flow/interest coverage ratio."
Li added, "too much personality is not good, I believe. But that is not the reason why I would consider getting a CEO."
That scrutiny led to public embarrassment earlier this year when Li admitted that he had never earned a degree from Stanford University, despite company statements that he had.
Asked if he was worried that investor confidence in him was flagging, Li said, "no, I'm not concerned about that."
He added, "the fact is that, as far as that education thing is concerned, we have not filed anything at all," he said, referring to legal filings. "What we did not do is correct other peoples' mistakes."
He called it an "oversight" that a PCCW website said he had the degree, "but I never claimed that I got a degree."
Li noted that Internet and telecoms firms are in a tough market globally.
"We just have to perform, and that's what I'm doing. We are trying our best to serve our customers, to motivate the staff... to increase our cash flow in the company, and to grow."
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