Carl Vogel, president and CEO of ailing cable operator Charter Communications Inc., has resigned.
Charter did not specify the reason for Vogel's departure, but his longevity at the company has been the source of speculation for months.
Charter Communications Chairman Paul Allen says he doesn’t want to “personalize” the exit of CEO Carl Vogel, but points to the obvious reason: Charter’s operating results have been terrible. “If you look at our results over the last period of time, the board and I felt that there was headroom in the business and the need to focus on the operational side of the business,” Allen said in an interview.
Vogel’s contract is up in December and he was widely expected to quit by then, if not sooner because his experience at Charter has been so frustrating.
The cable operator has lost subscribers, cash flow growth has been anemic and the company has been rocked by accounting scandals. But Vogel’s departure this week was nevertheless abrupt. Allen called the departure “mutual."
Allen says Charter needs to focus harder on its operations. Management consultants at from McKinsey & Co. have targeted Charter’s weak customer service as its major problem and are pushing for the company to improve the quality of its operations, reduce the number of service calls required and improve customer responsiveness.
Bob May, Charter board member and onetime COO of Cablevision Systems, will serve as Charter’s interim CEO while the company conducts a more extensive search. Allen says that May's new role was not contemplated when he joined the board in October, but says he will be among the people considered for the job permanently.
May and Allen say they do not plan to dramatically overhaul Charter’s management, which has been through two waves of restructuring in the past four years partly because four executives became embroiled in a scandal in which Charter was overstating its operating results to investors.
Three executives have pled guilty and ex-CFO Kent Kalkwarf faces trial next month.
“My view is we have a teriffic group of employees,” says May “There are some management positions open to fill. You simply take the management team, provide direction, leadership and focus.”
Allen adds: “we’re looking for a mixture of continity and some fresh blood.”
Friedman Billings Ramsey cable analyst Alan Bezoza, for one, wasn't happy with the move, saying FBR was "disappointed" with Vogel's departure, adding "we believe [he] made the best of a difficult situation in leading Charter's financial and operational improvement over the last three years." He also cited the possible departure of senior execuves loyal to Vogel.