Qwest CEO gets compensation valued at $17.4 million
By George Merritt, AP
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
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
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
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
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.