Qwest’s two top officials, chief executive Dick Notebaert and chief financial officer Oren Shaffer, have each cashed in more than $18 million in stock options, according to regulatory filings Thursday.
It is the first time Notebaert and Shaffer have sold Qwest shares since joining the Denver- based phone company in the summer of 2002.
Notebaert plans to donate the after-tax proceeds of his sales to charitable organizations, said Nicholas Sweers, a Qwest spokesman.
Sweers didn’t disclose the names of the charities. He didn’t say what Shaffer plans to do with his proceeds.
“Contributions at this level are infrequent but have huge results,” said Charley Shimanski, president of the Colorado Nonprofit Association in Denver.
Citing tax filings, Shimanski said the average donor in Colorado gives $3,000 a year. Assuming Notebaert is in the highest tax bracket, 35 percent, his charitable contribution could be roughly $12 million.
In 1998, Notebaert donated $4 million to a museum in Chicago that was eventually named the Peggy Notebaert Nature Museum after his wife. At the time, Notebaert was chairman of Chicago-based phone company Ameritech.
His latest donations also could lead to naming opportunities, Shimanski said.
On Wednesday, Notebaert exercised roughly 3.9 million stock options with strike prices ranging from $3.44 to $4.70 and sold them at $8.55 a share for a profit of $18.4 million, according to a Securities and Exchange Commission filing.
Shaffer exercised about 3.3 million options with strike prices ranging from $2.10 to $4.70 and sold them at $8.55 a share for a profit of $18.47 million.
Notebaert still holds 12 million stock options, with about 6.75 million already vested, Sweers said. Shaffer still holds 4 million options, with 1 million vested.
“Their remaining ownership is very significant and validates their continued ongoing commitment to the company,” Sweers said.
But coupled with Qwest founder Philip An schutz’s plans to unload nearly half of his 300 million shares within four years, Notebaert’s and Shaffer’s stock sales are “not a good sign for existing shareholders,” Janco Partners telecom analyst Donna Jaegers said. “Those are sizable chunks of what they own.”
Qwest general counsel Richard Baer also cashed in roughly $6.4 million in options this week.
Since taking over, Notebaert and Shaffer have led Qwest from near bankruptcy to financial stability. The company has posted three straight quarterly profits.
The company’s stock price is up by more than 80 percent year over year.
“All shareholders have been rewarded by the company’s financial and operational performance,” Sweers said.
Qwest also has announced plans to buy back up to $2 billion worth of its stock over two years.
Qwest stock closed Thursday at $8.45, down 14 cents.
Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.
QWEST CEO DICK NOTEBAERT
Stock options exercised: 3.9 million
Strike price: $3.44 to $4.70
Share price sold: $8.55
Cash value: $18.4 million
Remaining options: About 12 million
QWEST CFO OREN SHAFFER
Stock options exercised: 3.3 million
Strike price: $2.10 to $4.70
Share price sold: $8.55
Cash value: $18.47 million
Remaining options: 4 million
