AUSWR
The Association of U S West Retirees
 

 

 

On Point: Alarming signal
By Vincent Carroll, Columnist
Rocky Mountain News
Friday, August 4, 2006

Sol Trujillo presided as CEO of U S West for all of two years, having marched his way to the top during a quarter-century as a loyal company man.  Trujillo was not an entrepreneur who risked his own resources and reputation on a new idea or product;  he was an executive who spent his career in a highly regulated industry in which real competition had been, for many years, a novelty.  And yet this week we learned that when Trujillo left U S West in 2000 as a result of its merger with Qwest, he pocketed $72 million, including a $36.9 million "change-in-control payment."  And that doesn't include his stock options, which no doubt were worth a separate fortune.

"Greedy and gluttonous, lining their pockets," is how an attorney for the Association of U S West Retirees put it, and that sounds about right.

This is not just a moralistic judgment based on imprecise notions of fairness and earned rewards.  It's also a fiduciary verdict.  As Thursday's News story recounts, Qwest canceled a planned $273 million stock dividend payment at the time of Trujillo's departure because new management "believed the money would be better spent on investing in video services, wireless programs and customer-service improvements."

So it was OK to stiff shareholders while showering riches on departing executives.  This would be the first alarming signal transmitted by management of the newly merged Qwest.  But it would not be the last.

http://www.rockymountainnews.com/drmn/opinion_columnists/article/0,2777,DRMN_23972_4892406,00.html