Report: Qwest's Nacchio Being Paid $3M For Consulting
11:09 AM, Aug 8, 2002
Qwest Communications released its second quarter earnings report on Thursday, one day after rumors of an imminent bankruptcy filing swept through Wall Street and caused the company's stock to plummet to an all-time low of $1.07.
The stock rebounded slightly, closing at $1.20 Wednesday.For the second quarter, the company reported a net loss of $1.14 billion or 68 cents per share.That's compared to a net loss of $3.31 billion for the second quarter of last year.The loss, excluding certain items, of 13 cents a share was six cents worse than expected.In addition, it is lowering its outlook for the full year to reflect what it calls a "normalized" loss of between 46 and 49 cents a share
In a statement the company, which is under investigation by the Securities and Exchange Commission, says the estimates include results of its directories business QwestDex, which it is attempting to sell. Talks are said to have bogged down because of the problems associated with the SEC.The troubled communications company will followed up its earnings report with a live Web cast at 7 a.m. MST, featuring new CEO Richard Notebaert and chief financial officer Oren Shaffer.The Denver-based Qwest provides local phone service in 14 states and operates a global communications network.It has struggled for months to cut down on its $26 billion debt and calm lenders and stockholders.Qwest stock has tanked in recent months -- a big concern to investors, retirees and current employees whose retirement accounts are heavily invested in the stock. In March 2000 the stock had reached a high price of $64.Qwest said it late July that it will file restate financial reports for 2000 and 2001 because an internal analysis found accounting errors.
Nacchio Paid $3 Million For Consulting Work
Meanwhile, published reports on Thursday say Qwest will pay ousted chief executive officer Joe Nacchio $1.5 million in each of the next two years for unspecified "consulting work."
The consulting pay is in addition to Nacchio's $10.5 million severance package and his retention of thousands of stock options.Sources said this week that it is unlikely Nacchio will do much consultation for Qwest, outside of occasionally testifying at the request of federal agencies investigating Qwest's accounting practices.Angry shareholders and other critics at Qwest's annual meeting in June 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 total compensation last year at $87 million, despite the 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.