Joseph Nacchio resigned as chairman and chief executive officer of the financially troubled Qwest Communications, the company announced Sunday night.
Nacchio resigned voluntarily, the company said in a statement. But The New York Times and The Wall Street Journal reported that the Qwest board of directors requested Nacchio's resignation. Nacchio will be replaced by Richard C. Notebaert, former chairman of the board of Ameritech Corp. and the president and chief executive of Tellabs, a telecommunications network provider. Qwest, a Denver-based Baby Bell, has been rocked by financial and regulatory problems. In May, Qwest stock was downgraded to below investment-grade rating. The stock has plunged from a high of $64 in March 2000 to the current level of about $5 a share.
Qwest is also under investigation by the Securities and Exchange Commission for its accounting practices. Angry shareholders and other critics at Qwest's annual meeting the first week in June in Dublin, Ohio, criticized Nacchio's bonuses and salary in wake of the company's billions of dollars in losses and plummeting stock price.Experts estimate Nacchio's compensation last year at $87 million, despite a recent 65 percent drop in the stock price.Nacchio received a $1.5 million bonus last year, down from a $2.3 million bonus the year before. He also received $24.4 million in long-term incentives last year. Nacchio, whose contract earlier this year was extended until 2005, made $1.2 million in base salary in 2001 and got a raise to $1.5 million for this year. Qwest is the local phone company for most of the Northwest and Rocky Mountain regions. It merged with the former US West in 2000.Nacchio is the latest corporate executive to resign amid questions over accounting practices and procedures.