Nextlink CEO Is on a Hot Streak
By Rob Garretson
In this vernacular, Daniel F. Akerson is like a hard-throwing relief pitcher, the all-star summoned from the bullpen time and again with the game on the line. His winning streak stretches back into the early 1990s, after he left the No. 2 spot at MCI Communications Corp. to lead three successive companies to new heights. For the past four years, the skipper who has called on Akerson's services has been telecommunications entrepreneur and billionaire Craig McCaw, who has a controlling interest in Nextlink.
In today's new economy, the sports metaphor easily extends to executive compensation, as successful corporate leaders--particularly in the technology industry--command packages that rival those of superstar athletes. And Akerson is no exception. His track record building fledgling or struggling telecommunications companies into powerhouses is well known throughout Washington's thriving technology community.
"This is sort of a three-peat executive," said Mark Fahlberg, managing director of NextCom Ventures in McLean, referring to an athlete who wins a championship--or repeats--three consecutive years. Fahlberg did investment banking for MCI in the early 1990s when Akerson was its president and has followed Akerson's career--admiringly, he says--ever since.
"He's been a great executive at three very interesting companies," Fahlberg said of Akerson. "A really brilliant investor like that knows how to find a brilliant CEO." He noted that McCaw also chose James Barksdale, who later rose to prominence as Netscape's first chief executive, to run his first foray into cellular communications.
When Akerson took the reigns of Nextlink last year, it was the third time he had answered McCaw's call. Their association dates back to March 1996, when--after pouring $1.1 billion into a near-bankrupt Nextel Communications Inc.--McCaw tapped Akerson to revive the struggling wireless phone company.
Many credit Akerson with Nextel's growth in revenues from $171.7 million in 1995 to more than $3.3 billion last year. Though the company has yet to turn a profit, its losses narrowed last year to $1.3 billion from their 1998 peak of nearly $1.7 billion. More important for investors was the movement of Nextel's stock, which traded between $8 and $9 per share when Akerson took over in March 1996 and ended last year above $50 per share. (Nextel closed Friday at $55.68 3/4, up 4 percent for the year despite the lingering sluggishness in technology stocks.)
When he stepped down as Nextel's chief executive last July, Akerson went back to McCaw's bullpen as co-chairman of Eagle River Investments LLC, the holding company that owns McCaw's stakes in Nextel, Nextlink and the satellite venture originally launched with Microsoft Chairman Bill Gates, now dubbed Teledesic LLC. But McCaw didn't wait long to call on Akerson to win another big game for the billionaire investor, offering him the top job at Nextlink only two months later.
"I think I'm more of a builder than a manager," Akerson said last July in an interview with The Washington Post. He declined to be interviewed for this article. A spokesman said he was not comfortable being quoted in a piece that called attention to his compensation package, which in 1999 included $432,692 in salary and bonuses but stocks options potentially worth upward of $180 million.
Akerson, 51, is a former naval officer with a reputation as an aggressive, no-nonsense manager who has little patience for slow-moving colleagues. Once, while in a German hospital in for treatment of a gallbladder ailment, he pulled the tubes from his arm, checked himself out of the hospital and flew back to the United States, saying the doctors overseas weren't acting fast enough. And he wasted no time in taking the helm at Nextlink, where he stepped into ongoing discussions with Concentric Network Corp. and presided over the company's $2.54 billion acquisition of the California company, which closed last week.
Though it's too early to judge his performance at Nextlink, analysts like the Concentric acquisition. It gives Nextlink Internet access, Web hosting, electronic commerce and other services to sell over its growing fiber-optic network, as well as an instant presence in Europe, a relatively untapped market for Internet services.
Nextlink stock has also performed well since Akerson's arrival, rising from $25 per share in mid-September to more than $40 at Friday's close.
"Whatever happens [with the value of his stock options] . . . essentially it reflects the performance of the companies that Dan's been with," said McCaw, noting that Akerson doesn't have an unusually high number of options for a telecommunications chief executive. The high value of his compensation at Nextlink is based on the strong performance of the underlying stock, he said.
As the principle shareholder in Nextlink, Eagle River and Nextel, McCaw couldn't be happier with Akerson's performance and thinks he is worth every penny of his compensation package. McCaw appreciates the responsibility Akerson assumes for the companies he leads, allowing the visionary investor to focus his attention elsewhere.
"The thing I really like about Dan [is that] he's a highly ethical, deeply caring person who . . . cares so much that sometimes we encourage him not to be so caring," McCaw said. "Because he takes the behavior of a company and its operations very personally. . . . He takes charge in a way that you really want . . . and he does it in a way also that respects his boards."
McCaw realizes that he and Akerson have been on a roll with his two Northern Virginia telecommunications companies, and that what goes up sometimes comes down.
"Both companies have had a wonderful period, and, of course, we respect the fact that different companies spurt at different times," McCaw acknowledged. "Luckily we had two . . . in the sweet spot these last 12 months and a bit beyond.
"But we also remember that there were slow periods, too. While Nextel was getting turned around . . . the pickin's were a little slimmer."
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