Company Overview:

 

AT&T Corporation, formerly known as
The American Telephone and Telegraph Company, was incorporated on March 3rd,
1885 in New York as a wholly owned subsidiary of The American Bell Telephone
Company. AT&T is headquartered in Dallas, Texas. Its original purpose was
to manage and expand the burgeoning toll (long distance) business of American
Bell and its licenses. It continued as the long distance company, until
December 1899 when it assumed the business of American Bell and became the
parent company of the Bell System. For most of history, the company has
functioned as a legally sanctioned regulated monopoly. No competition was
apparent until the 1970’s, AT was one of the only company’s which
provided telecommunication services, however after the patents expired around
6000 new companies entered the market and vastly increased the degree of
competition. AT&T is the largest telecommunications company in the US.

The company provides local and
long-distance phone services, wireless and data communications, Internet access
and messaging, IP-based and satellite television, security services,
telecommunications equipment and directory advertising and publishing. The
company provides talk, text and data coverage to an outstanding 170 plus
countries.

The telecommunications industry is
incredibly saturated, as the majority of Americans own a cell phone. AT&T’s
strategy is to create the best communications and entertainment experiences for
their customers. They want to accomplish this strategy by investing in
effortless customer experience, supply premier network assets, produce

world-class entertainment, operate with
industry-leading cost structure, serve customers globally and equip their
employees for the future. AT has more than 16,0001 retail
locations in the U.S. The company employs around 246,7402 people.

 

 

 

 

 

 

 

 

 

 

Corporate Social
Responsibility and Committees:

Corporate
social responsibility contributes to sustainable development, by delivering
economic, social or environmental benefits for all the company’s stakeholders.

AT&T participates in numerous commitments to impact society in a positive
way. The company gives back to the community through a series of programs;
Telecoms Sans Frontiers’, Project Hope, Canadian Meal Exchange, Dangers of
Texting and Minor Recovery. They touch base amongst problems which directly
relate to their product, such as the Dangers of Texting program. AT also
gives back to the planet, through their sustainability program, which dictates
the steps taken to conserve natural resources and become more

climate
resilient. The company also offers two learning opportunities, where AT
empowers children and women to move forward in the business world.

AT has six committees, these
committees have the authority to conduct investigations and retain consultants
in connection with their perspective responsibility. The first committee, the
Audit Committee oversees the integrity of financial statements, the performance
of the company’s internal audit function and the compliance by the company with
legal and regulatory requirements. The Finance Committee assists the board in
an oversight of the company’s finances, capital investment policies and
strategic planning. The Corporate Governance and Nominating Committee deals
with choosing, assessing and recommending people to be on the board of
directors. The Executive Committee acts on behalf of the board in the intervals
between meetings of the board. The Human Resources Committee discharges the
boards responsibilities relating to compensations of company executives and
other compensation matters. Lastly, the Public Policy and Corporate Reputation
Committee is appointed to assisting the board in the oversight of policies
protecting the company.

Segment Data and Industry Competitors:

The company has four major business
segments; business solutions which makes up 10.991 billion in
revenue, entertainment and internet services which is 51.3 billion1,
consumer mobility at 33.2 billion1 and international claiming 7.2
billion1. These numbers translate to business solutions at 44%
entertainment group at 32% consumer mobility at 20% and international at 4%.

The company’s customer group would be defined as a luxury for individual
consumers, but a necessity in the business world. The subscriber base of 80
million reaffirms the demand for their product.

Industry
Revenue

Company

FY
Revenue (bn)

Total
Revenue

AT&T Inc

121

74.58%

Verizon

121

100%

T-Mobile US Inc

37.2

100%

Sprint Corp

33.8

100%

CenturyLink Inc

17.5

100%

BCE Inc

14

82.91%

Since
AT&T offers such a large selection of products and services, they have
numerous competitors. AT&T’s competitors at a firm level are Verizon,
T-Mobile, and Sprint. The criteria used to identify these competitors are
revenue, and consumer base. The table below indicates a industry revenue
breakdown, as taken from the Bloomberg terminal.

 

 

 

 

 

 

 

 

 

 

 

 

Competitors at the segment level differ
from those at the segment level. For business solutions some major competitors
are DISH Network and Charter

Communications.

Entertainment group competitors are Walt Disney and Comcast. Consumer mobility
competitors are the same as those at the firm level; Verizon, T-Mobile and
Sprint. International competitor would be Telefonica S.A, however their numbers
do not match to AT’s very closely.

CEO and Board of Directors:

Randall
L Stephenson is the CEO of AT&T. He was named to this position in 2007. He
was hired from within the firm. He began his career in 1982 with Southwestern
Bell Telephone, in Oklahoma. He progressed through a series of finance
leadership position. In 2001, he was appointed as the Chief Financial Officer
for SBC. In 2004, he was named Chief Operating Officer of SBC. Until 2007,
whereafter he acquired the position of CEO. He’s on three different director’s
boards. Randall Stephenson has worked within the firm for several years. He has
a sound understanding of the company, which is a great foundation for his
current position. Randall Stephenson’s compensation for fiscal 2016 was
$28,433,716. The break down of this number is better depicted in figure 4.

Compensation for 2016
in USD

Salary

1,791,667

Bonus

0

Stock Awards

16,063,344

Option Awards

0

Non-Equity Incentive

5,700,000

Pension

3,474,304

Other Compensation

1,404,401

Total

28,433,716

 

 

 

 

The
Board of Directors is composed of 131 people. Of these 13, 61%2
are CEO’s of other companies. 15%2 of the board are insiders.

Insider directors are defined as people who are employees, stakeholders or
officers in the company. This distinction is important as insiders have a
deeper understanding of the company, since they oversee its day to day
operations. They hold extensive knowledge about the company’s strengths and
weaknesses, therefore are able to make better informed decision. In 2008, following
the economic crisis, naturally AT’s stock fell – however, this was not
central to AT&T, many companies also saw a steep decline.  Since the economic crisis, AT&T’s stock
has grown at a steady and gradual rate.

Ownership Structure:

 

AT
are listed under the New York Stock Exchange, under the stock symbol is T. The
market is capped at $222.039 billion1. AT currently has 6.1
billion outstanding shares, about 0.08%1 are held by insiders as of
19/10/2017. Stephenson Randall holds the largest individual company share,
Rafael De La Vega holds the second largest individual company share and James
Ciccioni is third largest individual share holder. Figure 6 represents the top
10 individual share holders, and the number of shares they hold.

STEPHENSON RANDALL

1,901,541

VEGA RAFAEL DE LA

824,233

STANKEY JOHN T

572,546

STEPHENS JOHN J

531,359

BLASE JR WILLIAM A

385,587

CICCONI JAMES W

360,984

DONOVAN JOHN M

285,706

ARROYO F THADDEUS

116,547

HUTCHINS GLENN H

103,323

LEE LORI M

78,589

 

 

 

 

 

Institutional Holders

Vanguard Group

435,174,065

6.97%

Blackrock

374,842,288

5.99%

States Street Corp

250,101,098

4.14%

Evercore Trust Company NA

208,299,814

3.42%

Capital Group Companies Inc

95,487,905

1.70%

Bank of America Corporation

87,119,419

1.23%

Nothern Trust Corporation

2,473,812

1.19%

AT
has 3,105 insttitutional owners. The amount of shares owned is 3.79 billion1.

Institutional investors hold 61.74%1 and the industry average
compares at around 59.36%1. The benefits of institutional ownership
is that it heeds towards a better portfolio analysis, as it enhances the
probability of profits. Institutional ownership also drives the interest of
stock up, and boosts the value of share price. The disadvantage is, when
institutions sell their shares it will impact a lot of shareholders. The top institutional
holders are represented in figure 7.