Qwest shareholders soundly rejected a proposal Wednesday that would have given them an advisory vote on the salaries of top executives.
Voted down nearly 2-to-1 at Qwest’s annual meeting in Denver, the “say-on-pay” provision is one other companies have adopted amid growing scrutiny of senior-level compensation.
In its proxy statement, Qwest’s board of directors encouraged a “no” vote because its compensation program “is thoughtful, performance-based, and in the best interest of our stockholders.”
Yet in urging support for the proposal, shareholder activist Mary Ann Neuman said Qwest’s compensation committee is “out of the loop” and slammed the approval of a provision in chief executive Ed Mueller’s contract that gives him a $75,000 allowance for unreported expenses.
She said 15 major U.S. corporations have implemented the say-on-pay policy, including Verizon Communications and Apple.
Qwest shareholders voted 58 percent against the proposal and 31 percent in favor, with 11 percent abstaining. Two years ago the same measure garnered just 20 percent of votes in favor. It wasn’t considered at last year’s annual meeting.
Votes on proposals are tabulated by a third-party company. Shareholder votes are kept secret, but institutional investors publicly disclose how they voted in regulatory filings.
Qwest said three other shareholder proposals also were rejected. One, to allow stockholders with a combined stake of at least 10 percent to call special meetings, was defeated 47 percent in favor, 52 percent opposed, and 1 percent abstaining.
In another development, Qwest will decide how it will attempt to recover money it paid toward former CEO Joe Nacchio’s legal defense against federal insider trading charges once his appeals are exhausted, company general counsel Rich Baer told shareholders.
Nacchio was convicted in 2007 and is serving a six-year term at a federal prison in Pennsylvania. He has appealed to the U.S. Supreme Court and has asked a district court judge for a new trial because of newly discovered evidence.
The company has not disclosed how much it paid or how much insurance covered.
Baer said Qwest doesn’t consider the amount to be “material” — that is, significant enough to require public disclosure under accounting rules
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Andy Vuong: 303-954-1209 or avuong@denverpost.com
