Qwest's Shaffer stepping down as finance chief

Jeff Smith, Rocky Mountain News

Published March 1, 2007 at midnight

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Qwest Chief Financial Officer Oren Shaffer, instrumental in the Denver telco's financial turnaround, is retiring effective April 1, the company said Wednesday.

Since 2002, Shaffer has helped Qwest cut $26 billion worth of debt nearly in half through the sale of the Dex Yellow Pages business and other assets, debt refinancings, and improved cash flow. Shaffer also guided the company through a reaudit of its books in which Qwest erased more than $2.5 billion of revenue and profits from the Joe Nacchio era.

"We are very fortunate to have had him come out of retirement almost five years ago," Qwest Chief Executive Officer Dick Notebaert said, praising Shaffer for helping lead the company to profitability.

John Richardson, currently senior vice president and controller, will take Shaffer's place. Richardson has been with the company for about four years.

Donna Jaegers, a telecommunications analyst for Janco Partners in Greenwood Village, gave Shaffer's performance an A.

"I was caught off guard a little (by his announced retirement), but he is turning 65 this summer," Jaegers said.

Shaffer typically earned about $3 million a year in salary and bonuses at Qwest. He netted $18 million from exercising stock options last November and sold $2.1 million of restricted stock on New Year's Eve, likely for tax reasons. He still holds restricted stock and options worth more than $20 million.

The Association of U S West Retirees, whose tens of thousands of members have seen their benefits cut, have been especially critical of Qwest's executive compensation packages.

Shaffer said in an interview that his retirement, the third of his career, had been planned for some time.

"I'm 65, we finished off a good year last year, and I think everything is in a good place," he said. "Qwest is clearly a much stronger company today than five years ago, and I think we have a much better ability to take advantage of opportunities that present themselves."

Shaffer said he plans to maintain a residence in Denver.

Jaegers said that when Shaffer and Notebaert came aboard in the summer of 2002, "management could have gone either way. They could have taken the company into bankruptcy."

Jaegers said she believes the original game plan by Notebaert and Shaffer was to fix Qwest and sell it, but she doesn't see many potential buyers at this time.

Jaegers believes Qwest must be more aggressive with acquisitions of its own, and before Shaffer gets busy doing that, he may have seen this as a good time to step down, she said. Qwest made a bid for MCI in 2005 but was trumped by Verizon.

In a related announcement, Qwest named R. William Johnston, currently assistant controller, as the new controller, effective April 1.

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smithje@RockyMountainNews.com or 303-954-5155.

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