The Association of U S West Retirees



With Anschutz out, Notebaert holds sway at Qwest
The telecom chairman has two slots to fill on a board mostly of his choosing. Wall Street approves.
By Beth Potter, Staff Writer
Denver Post
Thursday, March 2, 2006

Three years after taking over at Qwest, chairman and chief executive Richard Notebaert now can solidify his control of the telephone company's board of directors and further remake the company in his vision.

Company founder and director Philip Anschutz said Tuesday he would not stand for re-election at Qwest's annual meeting this spring.  Cannon Harvey, a top Anschutz lieutenant, also will not renew as a director, leaving two vacancies on the 13-member board.

On Wednesday, the stock was up 10 cents to $6.42.

"That's clear evidence the investors approve of this change in direction," said Lynn Stout, a professor of corporate law and corporate governance at the UCLA law school.  "It's clear that Anschutz is going to take a less active role in the firm."

No decision has been made as to who might be tapped to fill the vacant spots, said Qwest spokesman Bob Toevs.

But Notebaert will greatly influence that decision.  He has already brought in seven outside directors, in addition to the seat he occupies.

Notebaert also has an opportunity to build a new nominating and governance  committee.  Its previous members -- Anschutz, Harvey and Tom Donohue, chief executive of the U.S. Chamber of Commerce, who left Qwest's board in 2005 -- are now gone.

Corporate-governance experts in recent years have given Qwest low marks for insider deals and for board members who stayed on after an accounting scandal that forced the company to restate more than $2.5 million in revenue.  Notebaert was brought aboard in the summer of 2002 to replace CEO Joe Nacchio, who was forced to resign in the wake of Qwest's difficulties.

Since then, Notebaert has boosted Qwest's stock price from as low as $1.11 a share.  Notebaert was traveling and unavailable for comment Wednesday.

Toevs said the company's strategy will continue to focus on customer service.

"We have a very talented group of directors with diverse experience and diverse backgrounds who approach their jobs with a great deal of stewardship and professionalism," he said.

Only three Qwest board members remain from Nacchio's days:  Denver construction magnate Linda Alvarado;  Peter Hellman, chief financial officer of Nordson Corp., an industrial manufacturing company;  and Frank Popoff, former chairman of Dow Chemical Co.

Notebaert has recruited board members, including several CEOs of locally based public companies.  They include K. Dane Brooksher, chairman and CEO of ProLogis;  Wayne Murdy, chairman and CEO of Newmont Mining;  and Patrick Martin, former chairman and CEO of Storage Technology Corp.

Caroline "Caz" Matthews, president of Blue Cross and Blue Shield of Georgia, and R. David Hoover, CEO and president of Broomfield-based Ball Corp., joined the board in December.

Notebaert has reduced Qwest's debt from $26 billion to about $15 billion and has cut operational expenses in his turn-around effort at Qwest. He says Qwest is poised to be profitable sometime in 2006.

Staff writer Beth Potter can be reached at 303-820-1503 or