AUSWR
The Association of U S West Retirees
 

 

 

Qwest CEO gets compensation valued at $17.4 million
By George Merritt, AP
Denver Post
Friday, April 4, 2008

Qwest Communications chief executive Edward Mueller, leading the company as it recovers from a 2002 accounting scandal, received compensation in 2007 valued at $17.4 million, according to a regulatory filing Friday.

Former CEO Richard Notebaert, who retired in August, received $16.8 million in 2007 compensation, including $8.0 million in severance pay.

Qwest Communications International Inc. reported an 89 percent increase in earnings for 2007's fourth quarter on strong sales of Internet and data products.  It also reported a 6 percent drop in operating expenses excluding $393 million in litigation charges.

In addition to a $470,769 salary, Mueller received a guaranteed bonus of $947,000 under his employment agreement and stock and option awards with an estimated value of $13.7 million the day they were granted, according to the filing with the Securities and Exchange Commission.

Mueller received nearly $2.3 million in other compensation, including $1.8 million in incremental costs when Qwest purchased his California home.  Mueller's personal use of a corporate aircraft was valued at $281,182.

Notebaert's compensation included a $689,616 salary and $8.0 million in severance compensation.  His total compensation in 2006 was $22.7 million.

Notebaert received stock and option awards with an estimated value of $7.4 million the day they were granted.  The awards were less than half the estimated $16.7 million he received in 2006.

Notebaert's personal use of corporate aircraft in 2007 was valued at $273,712.

The Associated Press calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation which the Qwest executives did not receive and the estimated value of stock options and awards granted during the year.  The calculations don't include changes in the present value of pension benefits and sometimes differ from the totals released by the companies.

When Mueller took over as CEO, Qwest said he would earn an annual base salary of $1.2 million and a target bonus of up to twice that amount.  During 2007, his guaranteed minimum bonus was $947,000.

Notebaert took charge of a financially troubled Qwest after the resignation of then-CEO Joe Nacchio in June 2002 when it was mired in a multibillion-dollar accounting scandal that forced the company to restate at least $2.2 billion in revenue.  Nacchio's conviction on insider trading charges was set aside by a federal appeals court.

Before joining Qwest, Mueller followed Notebaert at Ameritech Corp.  Notebaert resigned as CEO in 1999 after the company was acquired by SBC Communications, and Mueller became president and CEO of SBC Ameritech, the subsidiary of SBC Communications Inc., in 2000.

Denver-based Qwest is the primary telephone service provider in 14 mostly Western states and operates a nationwide fiber optics network.

For the quarter ending Dec. 31, Qwest reported net income of $366 million, or 20 cents a share, up from $194 million, or 10 cents a share, in the fourth quarter of 2006.  Revenue fell 1.5 percent to $3.4 billion from $3.5 billion and operating costs dropped 6 percent.

For 2007, Qwest reported net income of $2.9 billion, or $1.52 per share, compared with $593 million, or 30 cents a share, in 2006.

Revenue dipped 1 percent to $13.8 billion from $13.9 billion.

Operating expenses for 2007 totaled $12 billion including $393 million in litigation charges.

http://www.denverpost.com/breakingnews/ci_8813270