Qwest taps a 'proven leader'

Telco's new CEO a former colleague of predecessor

Jeff Smith and David Milstead, Rocky Mountain News

Published August 13, 2007 at midnight

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Qwest Communications on Sunday night named telecom and consumer marketing veteran Edward Mueller to succeed Dick Notebaert as chief executive officer.

Mueller and Notebaert worked together at Ameritech, and Notebaert said Sunday in a statement that Mueller (pronounced Miller) was his top recommendation to the Qwest board of directors. The board named Mueller on Friday, and he starts the job today, with plans to address employees at 2 p.m.

Mueller, 60, spent 34 years in the telecommunications industry, rising to president and CEO of Ameritech from 2000 to 2002. He became CEO in 2003 of retailer Williams-Sonoma, leaving in 2006.

In a statement, Notebaert called Mueller, "a proven leader with a broad background of communications and retail experience," and "well suited to meet the challenges of a highly competitive industry."

Notebaert surprised many when he announced in June plans to retire without an apparent successor in hand. But he said then that his successor should have a retail mindset, and that he would help the board in its decision. Sunday's appointment reflected Notebaert's clout in picking his successor.

The Ameritech angle is nothing new - Notebaert brought in several former Ameritech colleagues to be his top lieutenants during his five-year tenure.

Mueller's retail experience will be tested early, with Qwest increasingly challenged by cable TV companies like Comcast, and wireless carriers in its 14-state local phone territory.

Several analysts interviewed in the past week said Qwest also needs to be more aggressive in the mergers and acquisitions, to boost traffic on its nationwide fiber-optic network.

Mueller isn't exactly a household name, and wasn't on the list of the five or so speculated to be in the running.

"I don't know anything about him," said Donna Jaegers, a telecommunications analyst at Janco Partners in Greenwood Village. "Dick must have known him from Ameritech."

Mueller said in a statement that he believed the company under Notebaert made "great strides in upgrading and solidifying its infrastructure, and has built an impressive reputation for putting the customer first. When you combine the company's improved financial position and impressive set of assets, there's a great opportunity for continued growth."

But analysts have noted that much of the company's improved financial condition has come through cost-cutting, and Jaegers said Sunday night that there isn't much more cost-cutting that can be done.

Mueller will make a base salary of $1.2 million. His target bonus will be 200 percent of salary, but the Qwest pay plan allows for incentive payments greater than the target. Mueller will get restricted stock and options, but the value of the awards wasn't available late Sunday night.

Edward A. Mueller

• Age: 60

• 2003-2006: President of Williams-Sonoma

• 2000-2002: President and chief executive officer of Ameritech

• 1999-2000: President of SBC International Operations

• 1997-1999: President and chief executive officer of Pacific Bell

• 1968: Joined SBC in 1968 and held executive level positions in the company, including president and chief executive officer of Southwestern Bell Telephone

• Education: Bachelor's degree in civil engineering from the University of Missouri; executive M.B.A. degree from Washington University

• Native of St. Louis, Mo.

smithje@RockyMountainNews.com or 303-954-5155

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