Top Qwest execs receive
By Jeff Smith
Rocky Mountain News
Tuesday, October 25, 2005
Qwest Communications has given its top two executives more that $6.7 million worth of stock that they can sell as early as 2007.
The company granted 1 million restricted shares to Chief Executive Dick Notebaert and 625,000 restricted shares to Chief Financial Officer Oren Shaffer.
The grants were made Thursday, when Qwest shares closed at $4.15.
The shares are "restricted stock", meaning Notebaert and Shaffer must stay with the company before the shares can be sold.
They will vest fully on Dec. 31, 2006, according to a regulatory filing Monday.
As accounting rules begin to require that the cost of stock options show up in financial statement, companies are moving more toward restricted stock as the chief stock-based form of executive pay.
Qwest spokesman Robert Toevs wouldn't comment directly when asked if that was the company's motivation.
"The board felt it was in the best interest of the company to deliver a compensation plan (to Notebaert and Shaffer) that created the right blend of incentives and performance recognition", he said.
Nelson Phelps, executive director of the Association of U S West Retirees, said he believed the pay package remains excessive.
"Those who built the business are having benefits taken away from them", Phelps said. "I think again Mr. Notebaert talks out of both sides of his mouth. He has continually told us he wants to do everything possible to help retirees. But retirees have lost more under Dick Notebaert than any other CEO. We think there should be some balance there."
Qwest also gave Notebaert and Shaffer six extra years to use their stock options if either man resigns or retires after Dec. 31, 2006.
The amended employment agreement also entitles them to two years' worth of salary and at least two years of bonuses if they leave for any reason other than "cause" after Dec. 31, 2006.
The agreement maintains previous perks for Notebaert such as the use of a private office, executive assistant, telephone services and appropriate office and computer equipment for the rest of his life. Shaffer gets such perks for five years after leaving Qwest.
The filing also reflected increased in compensation for nonemployee company directors. They'll get $50,000 annually, up from $30,000, and a stock option grant valued at $100,000.
They no longer will get $2,000 per meeting.
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