Australia | Aug 04 2006
By Rudi Filapek-Vandyck
Current Telstra (TLS) CEO Sol Trujillo received a US$72m-plus severance payout from his former employer US West, it has been revealed through court filings in the US. Both Bloomberg and The Rocky Mountain News carry the story today citing from court documents.
Trujillo started his career at US West, working his way up and ultimately ending up in the position of CEO when Qwest Communications put a takeover bid on the table.
According to the US newspaper, Qwest agreed to pay then-U S West CEO Trujillo US$72m one day before the merger between the two companies closed on June 30, 2000.
"The severance package, which included [US]$5.5 million for the use of a corporate plane for 3 1/2 years, excludes the value of stock options that immediately vested and certain other long-term incentives. Those potentially added tens of millions of dollars to his ultimate windfall", the newspaper reports.
The payout has only now become public as the details were discovered by a Denver attorney in court documents connected with a case involving US West shareholder dividends.
As one would expect, the discovery has already been described as "outrageous" by shareholder activists in the US. Last week US regulator SEC approved new rules that require companies disclose all additional executive compensations. No doubt, the Trujillo discovery will be used as an example of why the change in rules was necessary.
The newspaper reports that, according to the court documents, Trujillo’s US$72m included a US$36.9m change-in-control payment, a US$10m payment to sign the agreement (???), a US$13.7m pension payment, a US$5.5m airplane allowance, US$2m worth of office space and administrative support, and nearly $1m in perks.
The perks included memberships at country clubs, US$100,000 worth of limousine services and more than US$13,000 to attend the World Economic Forum.
"In return, Trujillo pledged not to make any disparaging remarks about Qwest."
