Australian media abuzz over Trujillo severance
Defender: $72 million is proof ex-US West boss loves working
By Jeff Smith
Rocky Mountain News
Wednesday, August 9, 2006
Sol Trujillo's $72 million golden parachute from U S West in
2000 has riled up the Australian press and caused a longtime
colleague to defend his honor. The
Sydney Morning Herald
has been one of several Australian newspapers to cover news
of the lucrative severance package, with a headline "Sol's
Platinum U.S. Egg Revealed."
The paper quoted Stephen Matthews, chairman of the
Australian Shareholders Association, as saying the payout
was an "extraordinary amount of money. . . . Shareholders
here, including the government, wouldn't tolerate a payout
of that order in Australia."
Trujillo now heads Telstra Corp., Australia's largest
telecommunications company. Phil Burgess, a former U S West
spokesman who works for Trujillo at Telstra, said the
severance package merely proves how much Trujillo loves
"He's clearly a person who doesn't need a full-time job,"
Burgess said in a statement carried by Australian
newspapers. "He was a wealthy man on five blue-chip boards
when he was asked to consider working for Telstra. The fact
that he chose to accept this 24-7 job on the other side of
the world away from his family demonstrates his commitment
to transforming Telstra."
As reported in the Rocky
Mountain News last week, Curtis Kennedy, attorney
for the Association of U S West Retirees, recently
discovered court documents showing that Trujillo was given a
$72 million severance package one day before the U S
West-Qwest merger closed in mid-2000.
The severance package was signed off by Frank Popoff, then U
S West's human resource committee chairman, on behalf of the
U S West board. It included a $5.5 million airplane
allowance over several years.
The severance agreement followed a testy exchange between
Trujillo and former Qwest CEO Joe Nacchio over the U S West
board's decision to issue one final quarterly dividend to
Nacchio claimed the dividend, which would have cost $273
million, violated the merger agreement. U S West
effectively agreed to kill the dividend by changing the
record date until after the merger was completed.
While Qwest indeed didn't pay the dividend, it apparently
honored the terms of Trujillo's severance package. Qwest
has declined comment about its role in the Trujillo matter.
U S West stockholders have since won a $50 million
settlement in connection with the unpaid dividend.
The Sydney paper also said the news of Trujillo's U.S.
severance package "will fuel (Telstra) shareholder hostility
towards the 54-year-old American."
Australian papers noted Trujillo earns an annual salary of
$2.27 million at Telstra with the potential to earn an
additional $5.3 million through short- and long-term
Trujillo recently told Bloomberg News that running Telstra
has turned out to be his hardest job. Since becoming CEO in
July 2005, he has struggled to keep customers, stave off new
competitors and strengthen Telstra's slumping stock.