AUSWR
The Association of U S West Retirees
 

 

 

Qwest retirees press accountability
In concert with a national union, they seek majority voting for board slots and approval of any special executive benefits.
By Beth Potter, Staff Writer Denver Post
Wednesday, February 8, 2006


Still smoldering after losing millions of dollars in an accounting scandal three years ago, some retired shareholders of Denver-based Qwest are teaming with a national union to try to make the telephone company more accountable.

The American Federation of State, County and Municipal Employees is petitioning Qwest and three other public companies to allow majority voting for all new board slots when they have their annual meetings this year.

Existing board members typically choose new board members with shareholders asked to approve or withhold their votes.  A dissenting vote often isn't an option.

"It's primarily driven by the scandals like Enron and (former Qwest chief executive Joseph) Nacchio. Those boards of directors are responsible," said Nelson Phelps, spokesman for the Association of US West Retirees. "It's changing across the country because of aggressive groups like ours."

Colorado's largest company was forced by the Securities and Exchange Commission to restate $2.5 billion in revenues accrued during Nacchio's tenure.  The stock fell from about $60 to less than $5.

United Technologies Corp., Honeywell International and Wells Fargo & Co. also are being petitioned by the union group.

Shareholder activists nationwide are having some success:  Computermaker Intel Corp. last month said it amended its bylaws to require that board candidates get a majority of the votes cast to be elected.

In Denver, Qwest shareholders also will demand that the board gets their approval to hand out any special executive benefits.  They also want any senior executives who receive bonuses based on information that's later restated to be required to return the money, said Philip Graham, a Phoenix shareholder.  Similar shareholder demands were voted down last year, Qwest's 2005 proxy statement shows.

"The big question is whether they'll get enough additional support to cross over into majority-vote territory this year," said Beth Young, an analyst at Corporate Library, a corporate governance group.  "This might be a proposal that breaks out."

Staff writer Beth Potter can be reached at 303-820-1503 or bpotter@denverpost.com.

http://www.denverpost.com/business/ci_3485355