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New Qwest CEO's family to get use of jet

Jeff Smith, Rocky Mountain News

Published September 1, 2007 at midnight

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Qwest Communications has amended its contract with new CEO Ed Mueller, allowing his stepdaughter to use the corporate jet to travel between Denver and California, where she is finishing high school.

The agreement, filed with regulators Friday, authorizes Mueller's wife and stepdaughter to fly unaccompanied between the two locations through June 30, 2008.

"The amendment reflects a great appreciation for his family situation as his daughter wraps up her current schooling in California," Qwest spokesman Bob Toevs said.

The agreement also allows for the ongoing personal use of the company aircraft by Mueller and family members as long as it's "reasonable." The use is subject to annual review by a board committee.

Toevs noted that since Qwest is requiring Mueller to use a corporate aircraft rather than a commercial airline for security reasons, it believes it should accommodate "reasonable personal use."

Not everyone agrees with that position.

Paul Hodgson, senior research associate for the Corporate Library, which studies governance issues, said it seems "ridiculous" to allow family members to use corporate aircraft without requiring them to pay their way as they would on a commercial airline.

"I don't have a problem with a board saying, 'We think there are security issues here,' " Hodgson said. "But I don't see why shareholders should have to foot the bill" for family members.

Hodgson said he is issuing a report Tuesday on the personal use of corporate jets. He said he looked at 215 companies (not including Qwest) and found that only 28 allowed a CEO's family and friends to use a corporate jet. He acknowledges he can't be certain all the companies made full disclosures.

Mueller, named in August to replace Dick Notebaert as Qwest's CEO, will be getting a salary of $1.2 million with a target bonus of $2.4 million, stock awards worth about $15 million, moving expenses, temporary housing expenses of $5,000 a month, and other benefits.

Toevs said Mueller has put a bid on a Denver house and is hoping to close on the property in October.

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