seeking telco performance-pay link
By Jeff Smith
Rocky Mountain News
Tuesday, May 1, 2007
The Association of U S West Retirees is urging Qwest
shareholders to back three proposals that would tie executive
compensation to performance, according to a regulatory filing
last week. The proposals by the retirees group and American
Federation of State, County and Municipal Employees are included
in shareholder proxy materials in advance of the Denver telco's
May 23 annual meeting.
• One proposal requests a policy requiring at least 75
percent of "equity-based" compensation, such as stock options
and restricted stock, to be based on performance criteria.
• Another seeks shareholder approval of extraordinary
executive retirement benefits.
• A third would allow shareholders to provide an
advisory vote on senior executive compensation packages.
"There's really no strings attached (to these stock awards to
top executives)," said Nelson Phelps, executive director of the
Association of U S West Retirees. "They end up being more than
the bonus and salary together. It seems like an automatic
handout from the board."
The retirees group cited Portland, Maine-based Corporate
Library, which rated Qwest's corporate governance a "D" partly
because of high executive compensation packages.
Qwest spokeswoman Diane Reberger, however, said Institutional
Shareholder Services this year gave Qwest high marks for
corporate governance, saying the telco outperformed more than 90
percent of the Standard & Poor's 500.
Qwest is asking shareholders to vote against the proposals,
saying they would place the company at a "substantial
disadvantage" in attracting and retaining talented executives.
CEO Dick Notebaert received nearly $25 million in compensation
last year. That included a $1.1 million salary, $4.1 million in
bonuses, stock and option awards valued at $16.7 million,
$332,000 for personal use of a corporate jet, and other perks.