AUSWR
The Association of U S West Retirees
 

 

 

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 working.

"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 its stockholders.

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 incentives.

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.

http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_4903326,00.html