Qwest gives stock options to top execs
By Jeff Smith, Rocky Mountain News
Tuesday, March 8, 2005
Qwest Communications has granted 5.2 million stock options to seven top executives, including 2 million options to Chief Executive Dick Notebaert, according to a regulatory filing Monday.
The options, which can begin to be exercised next March at $3.89 a share, come on top of $7 million in bonuses granted last month to senior executives, including nearly $3 million to Notebaert.
Donna Jaegers, a telecommunications analyst with Janco Partners in Greenwood Village, didn't have an issue with the options granted.
"Considering the size of the company, I don't think it's excessive," Jaegers said. "These guys are working hard, and if you want to keep good people, you have to give them something to look forward to."
But Nelson Phelps, executive director of the Association of U S West Retirees, called the grants "excessive remuneration for where the company is financially."
Qwest spokesman Robert Toevs said the options "reflect the board's confidence in management's performance."
Using a valuation approved by the Securities and Exchange Commission, Notebaert's options have a potential value of $12.4 million if Qwest stock increases 10 percent annually over the options' 10-year life. He received 1.95 million options last year.
Qwest also granted 1 million options to Chief Financial Officer Oren Shaffer, 800,000 to Executive Vice President/Operations Barry Allen, 650,000 to General Counsel Rich Baer, 300,000 to EVP/Business Markets Cliff Holtz, 290,000 to EVP/Consumer Markets Paula Kruger and 170,000 to controller John Richardson.
While disagreeing with the options, Phelps lauded Notebaert's effort to try to land MCI for $8 billion as a "shining example of his leadership."
Verizon, which has an agreement to buy MCI for $6.75 billion, continued to talk like the winner Monday, touting its strong balance sheet and a quarterly dividend increase to 40.5 cents.
"We remain confident that we are the best partner for MCI," Verizon Chief Financial Officer Doreen Toben told analysts in Florida.
Toben added Verizon believes it already has put the winning bid on the table, even while top MCI shareholders such as Mexican billionaire Carlos Slim Helu are calling for Verizon and Qwest to sweeten their offers.