AUSWR
The Association of U S West Retirees
 

 

 

Qwest retirees aim to rein in executive pay, hold on to benefits
By Associated Press
Rocky Mountain News
Tuesday, May 23, 2006

Retirees of Qwest Communications International Inc. will try once more to revise corporate governance policies when Qwest holds its annual shareholder meeting here Wednesday — and a few may complain about high pay to executives.  Up for a vote is a proposal from retirees to require that shareholders approve retirement benefits for executives that go beyond what other managers receive.

Another aims to recover performance-based pay to executives if it later turns out that the company performed worse financially than previously stated.

Two proposals from other shareholders would require that Qwest Communications International Inc. have a separate chairman and chief executive officer (CEO Richard Notebaert now holds both titles) and that directors be voted in by a majority, not a plurality.

Qwest declined to comment Tuesday beyond its proxy statement, in which management recommended rejecting all four shareholder proposals.

The company also has asked shareholders to approve directors to the board, an auditor and a compensation proposal.

The Association of U S West Retirees, representing retirees of Qwest and the Baby Bell it acquired, tried unsuccessfully last year to pass the "claw-back" proposal seeking to recover executives’ performance-based pay.

The proposal came about after Qwest agreed to pay $250 million to settle civil fraud charges that alleged it artificially inflated its revenue during the tenure of former CEO Joseph Nacchio.

Qwest, in its proxy, said it already has a policy to deal with recovering compensation.

The proposal on executives’ retirement pay, also a repeat, comes as chief executives of other companies have walked away with millions of dollars and other benefits.

"While CEOs are increasing their benefits, corporations are removing benefits from employees and retirees," said Nelson Phelps, executive director of the retirees association.  "There’s got to be some balance."

Retirees are fighting threats to take away a death benefit for retirees’ survivors.  A Qwest spokesman said he could not comment on pending litigation.

Research firm Glass Lewis & Co. said shareholders should reject the proposal, which Qwest has said could limit its competitiveness in luring qualified executives.  Glass Lewis recommended approving the other three shareholder proposals.

The proxy advisory firm Institutional Shareholder Services Inc. has recommended that shareholders vote for all four shareholder proposals.

Roughly two dozen retirees typically attend Qwest’s annual meetings from around the 14-state region where Qwest provides local phone service.  Phelps said he expected at least one retiree to bring up executive compensation.

Notebaert received $4.25 million in base pay and salary last year, plus 1 million shares of restricted stock and options for 2 million shares.

In the first quarter, Qwest reported its first net profit since mid-2000 without including any gains from asset sales.

"We’re very supportive of the leadership and the steps they’ve taken to turn the company around," said Mimi Hull, president of the retirees association.  "Our only issue is, don’t do it on the back of retirees by taking away benefits earned in our working years."

http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_4720905,00.html