Notebaert, Shaffer get restricted stock worth $14.8 million
By Jeff Smith
Rocky Mountain News
Saturday, February 18, 2006
Qwest Communications has granted its top two executives
nearly $15 million worth of restricted stock and several
million options, with the rewards contingent on them staying
at the Denver telco until 2010. Qwest gave 1,459,000
restricted shares worth around $9 million to Chief Executive
Dick Notebaert and 948,000 restricted shares worth $5.8
million to Chief Financial Officer Oren Shaffer. Both
rewards were pegged to Thursday's close of $6.15 a share.
In addition, Notebaert got 2.3 million options to purchase
stock at $6.15 a share, while Shaffer got 1.5 million
options at the same exercise price.
The restricted stock and options will fully vest on Feb. 16,
2010. Notebaert and Shaffer must remain with the Denver
telco until then to reap the possible rewards, according to
a regulatory filing Friday. Exceptions include a change in
control of the company, such as a sale or merger.
This is the second time in less than a year the two were
granted restricted stock.
In October, the company issued 1 million restricted shares
to Notebaert worth $4.15 million and 625,000 shares to
Shaffer worth $2.6 million. Those shares, however, vest on
Dec. 31 of this year, which raised speculation then that
Notebaert and Shaffer might decide to leave the company in
Qwest spokesman Bob Toevs said the latest grants reward the
"steady, ongoing enhancement of shareholder value." Shares
of Qwest rose 27.3 percent in 2005.
Toevs also noted the restricted stock, besides having the
incentive for the two to stay another four years, has
certain performance bars designed to build the company's
For example, Notebaert and Shaffer won't get the restricted
stock award unless Qwest's closing stock price averages
$7.50 a share for 188 consecutive trading days between now
and Feb. 16, 2008, or $8 for 188 consecutive trading days
between Feb. 17, 2008, and Feb. 16, 2010.
"If shareholders don't realize the stock appreciation, then
the executives aren't going to realize the potential
rewards," Toevs said.
Still, Nelson Phelps, executive director of the Association
of U S West Retirees, said the rewards are simply too much.
"As we've said before, we really strongly believe the
executive compensation being paid is excessive, particularly
when you look at both the employees and retirees," Phelps
said. "Again, it's the haves and have nots."
Phelps said the retirees would continue to "hammer" on that
issue at the company's annual stockholder meeting this
Qwest also gave restricted shares and options to a group of
five senior executives: Barry Allen (251,000 shares and
368,000 options); Richard Baer (220,000 shares and 323,000
options); Paula Kruger (172,000 shares and 252,000
options); Thomas Richards (156,000 shares and 228,000
options); and John Richardson (59,000 shares and 87,000
+ 13 cents
smithje@RockyMountainNews.com or 303-892-5155