Qwest Communications International Inc. shareholders soundly rejected three proposals Wednesday that would have given them more clout in decisions about executive compensation.
The votes came during the Denver-based telecommunications company's annual meeting, where Chief Executive Officer Dick Notebaert was peppered with questions about salary and bonuses &
including his &
and cuts or caps in benefits for about 49,000 retirees across Qwest's 14-state territory.
The proposals on executive compensation, sponsored by retirees and American Federation of State, County, and Municipal Employees Pension Plan, come as more shareholders are seeking a greater role in deciding how company executives should be paid.
The defeated proposals included a so-called "say for pay" measure that would have allowed a non-binding shareholder vote on executive compensation packages. It was defeated 67 percent to 20 percent with about 14 percent abstaining.
AFSCME Pension Plan, institutional investors and other retiree organizations have pushed the "say for pay" proposal at a number of companies this year. It has been approved by shareholders at some companies, including Verizon Communications Inc., while it has been narrowly defeated at others.
Scott Adams, a spokesman for the AFSCME Pension Plan, said after the meeting that the group would resubmit the proposal next year. "Whenever one-third (of the shareholders) don't agree with the company, it's a pretty strong message," he said.
Before the session began, Adams dressed in a fuzzy yellow chicken suit and stood outside the hotel to promote his cause, at one point chatting with Notebaert.
After greeting shareholders before the meeting, Notebaert stood behind a podium and gave a short speech before he sat on a tall stool and answered question after question, drawing a few chuckles.
At times, however, the give-and-take became almost tense as the queries repeatedly centered on executive compensation, particularly salary, benefits and bonuses that Notebaert received.
At one point, shareholder Linda Baggus of Denver asked: "What do you do with those millions of dollars?" Notebaert said profits from options he cashed in December were donated to charity. She asked if he would give that money to retirees instead to pay for life insurance and Notebaert replied, "No."
He also stood by the company's decision to cap some health-care benefits and cut life insurance benefits for retirees to $10,000, saying the company is facing aggressive competition. "It's a different world," he said.
Notebaert said he couldn't discuss the life insurance issues in detail because of a pending lawsuit.
The CEO also said the company did not disclose details about legal fees for former CEO Joe Nacchio, convicted last month of 19 insider trading counts, except that the board is reviewing the guidelines to determine if any of the fees can be recovered. Nacchio's sentencing is set July 27.
In other action, shareholders defeated, 82 percent to 17 percent, a second shareholder measure that would have required the board to establish a policy that required at least 75 percent of future equity compensation for senior executives to be based on performance.
A third proposal would have given shareholders the authority to approve supplemental executive retirement plans or some benefits under the company's non-qualified pension plan. It was defeated 68 percent to 32 percent.
Shareholders approved a management proposal for a restated equity incentive plan, a slate of directors for the next year and the appointment of an independent auditor. They rejected a shareholder request to separate the roles of board chairman and CEO.
Qwest is the primary telephone service provider in 14 states ranging from Minnesota to Washington and south to New Mexico.
Shareholders refuse power over pay