Sprint CFO Arthur Krause to retire in June

Sprint Executive Vice President and Chief Financial Officer Arthur Krause will retire in June after 31 years at the company, including the past 14 years in his current position.

Robert Dellinger, currently president and CEO of General Electric’s property and casualty reinsurance businesses in Europe and Asia, today becomes Sprint’s executive vice president of finance. It is expected Dellinger will become the carrier’s CFO upon Krause’s retirement.

Sprint Chairman and CEO William Esrey praised Krause’s leadership during a tenure that saw the company build both its long-distance and wireless businesses “from scratch,” and develop its local telephone business into “the fastest growing in the U.S.”

“Sprint achieved a leadership position in the industry by balancing risk with reward and investing judiciously,” Esrey said in a statement. “Art’s counsel and influence during this period in Sprint’s history will be remembered for its professionalism, reliability, honesty and vision.”

Krause, 60, joined Sprint in 1971 as assistant controller for United Telephone Company of Ohio. He later was named president of United Telephone-Eastern Group in 1986, before being named to his current position in 1988.

While it’s “always a red flag,” when a company’s CFO leaves, the timing makes sense in Krause’s case, said Cary Robinson, analyst with U.S. Bancorp Piper Jaffray.

“He has plenty of money, and he’s done what he needed to do to get Sprint through its commercial-paper crisis,” Robinson said. “It’s a good time to leave.”

When Enron collapsed, it focused a bright light on telecommunications companies that also had written a large amount of commercial paper, Robinson said. Some companies, such as Qwest, were “boxed out” of the commercial-paper market and had to scramble when those notes came due, literally overnight.

While Sprint wasn’t boxed out, it did see its rates go up as concerns rose over whether telecom companies would be able to meet their obligations. That forced Sprint to arrange a $1 billion credit facility from Citibank and Deutsch Bank, and formulate a plan to divest its directory business.

“I have to believe that Art had an awful lot to do with that,” Robinson said, noting the economic woes constricting telecom today would be enough to drive a person half Krause’s age into retirement. “It wears on you. I’m 31 and it wears on me, and I’m only following the industry. He’s been through one of the worst cycles that telecom has ever been through, and once you go through that, you wonder whether you want to keep going through it.”

Dellinger, 41, has spent his entire career at GE--where he was named a vice president and corporate officer in 1997--and has no direct telecommunications experience. However, he was chosen by Sprint based on a “broad financial and operating background developed in a variety of GE businesses,” according to a press statement. Dellinger owns a bachelor’s degree in economics and accounting from Ohio Wesleyan University.

It’s a good move, said Robinson. “I’d rather see a GE guy come in than somebody from a company I’d never heard of or don’t know much about.”