Why isn’t Villalonga still CEO? The self-confidence that enabled him to snap up Latin American phone companies slipped into arrogance. His refusal last year to abandon a juicy stock-option plan proved an embarrassment for Prime Minister Jose Maria Aznar–who gave him the Telefonica job. Villalonga’s move to Miami to live with a former Miss Mexico, Adriana Abascal, made things worse. Last May, Villalonga briefed his board on a major merger–from Miami, on a videoscreen. Board members rejected the deal. Spanish papers stepped up their attacks. And the pressure rose when investigators began looking into charges of insider trading by Villalonga, who denies the allegations.
Investors applauded Villalonga’s record–but also his resignation. “Over the long term, his management style would have been risky,” says Frank Heise of Union Investment in Frankfurt. The question now: is the incoming chairman–former tobacco executive Cesar Alierta–ready for the telecom world’s frantic pace? For the moment, at least, a detail man seems a fine fit.
