If a proposal that would, in part, limit executive compensation gets enough votes at the carrier’s annual shareholder meeting in two months, the answer would be maybe.
This past weekend, news broke that Mueller – who replaced Dick Notebaert in the summer of 2007 – received $11.4 million in salary, bonus, options and restricted stock compensation for 2008. The amount totaled $6 million less than his 2007 package, but it’s still a ton of money in an era of layoffs. Speaking of which, Qwest in the past six months has so far axed 1,700 jobs.
So the question is, in light of those cuts, is it fair for Mueller to accept $11.4 million, especially considering that his peer at the larger and more profitable AT&T Inc. (T) is forgoing a bonus of his own? (Don’t feel too sorry for Randall Stephenson, though – he’s still taking home $15 million for ’08.)
Shareholders will vote on that very issue on May 13. Mary Ann Neuman, who owns 1,700 shares of Qwest common stock, in a March 6 SEC filing, calls for greater scrutiny and accountability at the company. That’s only part of her proposal but regarding pay, she terms Qwest’s severance, perks and executive pensions as “unjustifiably costly.” And given Qwest’s latest earnings numbers – a 50 percent drop in profit, although Qwest attributes that to new accounting practices and not operations problems – it’s probably past time someone questioned how and why the smallest of the Bells can hand out the biggest of the pay packages.
(Added on March 10: Qwest says its numbers only show a profit loss because it started adding income taxes “at normal effective rates” in its reports, a spokeswoman said. “In fact, if you were to remove the impact of the income tax accounting treatment and look at ’income before income taxes,’ Qwest reported a 17 percent increase from 4Q07 to 4Q08.” But isn’t that another corporate way to spin the numbers? Everyone has more money before they pay income taxes. It’s what’s left in the checking account after paying those taxes that matters. Right?)
For their part, Qwest executives state in that same SEC document that stockholders can communicate with the company about such concerns at any time and that, “in any case, the compensation program that we have established for our executive officers is thoughtful, performance-based, and in the best interest of our stockholders.”
At $2.97 per share, Neuman probably doesn’t agree.