DENVER — Qwest Communications shareholders voted to limit part of the company's executive compensation package Tuesday at their first annual meeting since Qwest erased $2.5 billion in profits in an accounting scandal.
The decision requires that growth in the pension fund be excluded when executive bonuses are calculated. Shareholders also won the right to approve any severance package worth more than three times an executive's base salary and bonus, and voted to limit directors to one-year terms.
All three changes were backed by Qwest management.
Qwest founder and Denver billionaire Philip Anschutz, new CEO Richard Notebaert and Frank Popoff all won re-election to the board. There were no other competitors for the board's three open seats. Notebaert and Popoff received at least 90 percent approval from shareholders, but Anschutz received only 80 percent.
"I'm just a little bit leery of Mr. Anschutz owning so much of this company and the conflict of interest," said Sandy Sanden, 51, a Qwest technician.
Retirees had called for a revamped board and a policy to make sure a majority of members did not have significant business ties to Qwest. In a recent letter to shareholders, the Association of US WEST Retirees said it believed eight of the board's 12 members had such ties.
Qwest has maintained that most of its directors are independent, but a shareholder advisory group, the Glass Lewis & Co., had recommended against re-electing Anschutz, saying his business relationships with Qwest created conflicts of interest.
Anschutz officials have said he acts in Qwest's best interest and has a right to be a director as the company's largest stockholder, with a 17 percent stake.
The board remains largely the same one that was sitting when federal regulators and prosecutors began examining whether Qwest artificially boosted its revenue, prompting a restatement that wiped out $2.5 billion in earnings.
Retirees, incensed that Qwest's last two chief executives have left with millions of dollars, have tried to rein in executive severance pay. This year, they gained the support of management for the mandatory shareholder vote on big severance packages.
Qwest was launched in 1988 by Anschutz as a fiber-optic network company. In 2000, it got into the local phone business with the $38 billion takeover of Baby Bell US WEST, the main carrier in 14 Western and Midwestern states since the 1984 breakup of AT&T.