Shareholders ruffle Qwest meeting
Retirees upset over benefit cuts, executive pay
By Jeff Smith
Rocky Mountain News
Thursday, May 24, 2007
Qwest's annual stockholders meeting should have been a love fest
Wednesday. After all, the Denver telco posted a $593 million
profit in 2006. The stock price soared 48 percent and is up 20
percent this year. Customer service marks are at record highs.
And the 100 or so stockholders in attendance warmly applauded
when CEO Dick Notebaert introduced seven network employees from
Colorado, Arizona, New Mexico and Minnesota who helped rescue
fire victims, stranded motorists and co-workers during the year.
But the 90-minute meeting at the Grand Hyatt Hotel in downtown
Denver turned tense.
While stockholders congratulated Notebaert & Co. for the strong
performance and while each shareholder proposal was defeated by
at least a two-thirds majority, many at the meeting voiced deep
unhappiness about retiree benefit cuts and what they see as
excessive executive pay.
The meeting was preceded by a protest by about a dozen retirees
and shareholder advocates who held placards urging more
shareholder say over "runaway CEO pay." The lead shareholder
advocate, Scott Adams of the American Federation of State,
County and Municipal Employees wore a chicken suit to symbolize
U.S. companies running away from accountability.
To be sure, Notebaert -- who made nearly $25 million last year
including stock sales -- is caught up in a larger, national
issue, with Qwest just one of many companies criticized.
Some of the discontent, particularly from retirees upset over
lower life-insurance benefits and healthcare caps, was
expected. Still, the amount of discord seemed remarkable in
contrast with Qwest's solid results. Just this week, Qwest's
stock price stormed through the $10 barrier for the first time
since March 6, 2002.
One female stockholder complained to Notebaert that he gets paid
more in one year "than any of us will see in a lifetime," and
asked if he believed in his heart that he is doing the right
thing for retirees.
"I think I'm doing the right thing," Notebaert answered.
Earlier, he said he couldn't comment about the life insurance
issue because it's in litigation.
Notebaert said he gave all proceeds from his $18 million of
stock sales last year to charity. But that didn't seem to
placate the upset stockholders.
At another juncture, Notebaert was asked why he didn't respond
to any of the 1,500 letters and e-mails from retirees.
Notebaert said he read every message and responded to one early
on, only to see his answer put on an Internet blog and "made fun
of and mocked." He said he didn't answer any more because he
wasn't given the same respect he gave the retiree.
(The Association of U S West Retirees confirmed that Notebaert's
e-mail response to the group's president, Mimi Hull, last
November was distributed on the group's e-mail network, with the
heading "To all, for what it's worth, here is Mr. Heart of
Gold's reply to my letter."
But Curtis Kennedy, attorney for the group, noted that all
Notebaert wrote to Hull was that "we missed you," referring to
the meeting when he announced the benefit cuts. "His response
completely ignored the letter and message," Kennedy said.)
Another stockholder Wednesday accused Notebaert of being flip
when he shot down her suggestion to spend some of his
compensation on keeping retiree life insurance benefits intact.
"I feel you're making light of this," said Linda Baggus, a high
school English teacher. "I feel you make obscene amounts of
money. . . . How is the service that you render so much more
valuable than the service I render?"
Notebaert said his pay is linked to performance and reflects a
"very competitive market. Different jobs get different pay
Mary Ann Neuman, a member of the Pioneers volunteer group in
Minnesota, said she's found that retirees don't have the same
motivation to help Qwest now that their benefits have been cut.
Notebaert became terser as questions covered the same ground.
In his concluding remarks, he said: "This is a great country,
where we can gather to agree and disagree."
Shareholder proposals defeated:
82 percent voted against a policy that would link at
least 75 percent of executive stock compensation to performance.
67 percent voted against giving stockholders an advisory
say on executive compensation. (20 percent voted for and 14
68 percent voted against a proposal that would give
stockholders the right to approve supplemental executive
82 percent voted against separating the chairman and
chief executive posts.
+ 6 cents
smithje@RockyMountainNews.com or 303-954-5155