execs made $27 million in '05
Notebaert's package as CEO, chairman worth $14.8 million
By David Milstead, Rocky Mountain News
Friday, March 31, 2006
Qwest paid its five best-paid executives more than $27
million last year, including a package for CEO Dick
Notebaert valued at more than $14.8 million. The figures
include stock-option grants of nearly 5 million shares in
March 2005 with an estimated value of $13.2 million.
Notebaert received 2 million of those, valued at $5.3
Most of the options were granted with an exercise price of
$3.89 per share. Qwest stock has risen roughly $3 since,
and the options have already become usable, so barring a
collapse in price, the executives will take home even more
than the estimated value.
Qwest disclosed the compensation in its annual proxy
statement to shareholders, which will be mailed in advance
of its May 24 meeting at the Seawell Grand Ballroom of the
Denver Performing Arts Complex.
Stockholders will vote on four shareholder proposals at the
One urges the board to pursue bonuses already paid to
executives if financial results are later restated. Another
requests the board seek shareholder approval for future
supplemental executive retirement plans . A third would
require majority voting for board seats, and another
requests the company separate the jobs of chairman and CEO,
which are held by Notebaert.
The company opposes all the shareholder proposals, saying
either that they are unnecessary because of existing
policies or that the proposal would put Qwest at a
While much of the compensation information in Tuesday's
filing has been disclosed, the document provides the first
full picture of 2005 pay for the company.
It also reveals Notebaert received $1,090,635 in "other"
annual compensation last year, including $462,498 of travel
on Qwest's corporate aircraft. Notebaert's aircraft use
totaled $189,296 in 2004.
For 2005, Qwest also gave Notebaert $75,000 in "flexible
benefits" pay, financial consulting services worth $54,943,
and personal assistant and office expense compensation of
$49,652. Qwest then gave Notebaert an extra $437,392 to pay
the taxes on the benefits he received.
Notebaert had a "target" bonus of $2.2 million on top of his
$1.1 million salary. Qwest met its corporate goals for
revenue, net income and cash flow, giving Notebaert his
target, the company said. Then, the board's compensation
committee used an "individual performance" measure to
increase the target bonus 43 percent, to $3.15 million.
In setting the individual performance mark, the board's
committee considered the financial measures and "resolution
of certain legal matters; successful negotiation of new
collective bargaining agreements; implementation of a
leadership training program for certain management
employees; and a restructuring of Qwest's balance sheet."
Dick Notebaert's $14.8 million pay:
annual compensation: $1,090,635
stock award: $4,150,000
option grant, estimated value: $5,327,620
• 401(k) and
life insurance: $14,556
- 6 cents
David Milstead is
finance editor of the Rocky Mountain News. He can be reached
milstead@RockyMountainNews.com or 303-892-2648.