Qwest CEO Nacchio Resigns; Successor Named

Qwest Communications International

Qwest's board unanimously elected Notebaert to the chairman and CEO posts Monday morning, the Denver-based carrier said. Notebaert, 54, had served as Tellabs' CEO since 2000 and was the chairman and CEO of Ameritech from 1994 to 1999, when the Midwestern Bell company merged with SBC Communications.

Nacchio's departure from Qwest marks the second CEO to remove himself from the hot seat of a struggling carrier this year. Bernard Ebbers, founder and CEO of WorldCom, resigned in April.

Qwest and WorldCom have been on similar paths. Both carriers are laden with debt and are under investigation by the Securities and Exchange Commission. Moody's Investor Services and Standard and Poor's have cut Qwest's and WorldCom's credit ratings to junk status.

Nacchio's resignation may have come as no surprise to angry shareholders who blasted the CEO during a recent meeting. An unidentified shareholder and retired officer at USWest, a company acquired by Qwest, had asked the board to terminate Nacchio at a shareholder meeting earlier this month. The shareholder noted that USWest's stock was $50 per share when Nacchio became CEO and that its price is now hovering at around $5, a 90 percent drop in value.

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The shareholder said that several Qwest shareholders also resented Nacchio's hefty salary and bonus at a time when the company is in debt and has laid off many employees. Qwest said in April that, excluding stock options, it paid Nacchio more than $27 million last year, which was more than six times his $4.22 million pay in 2000.

Nacchio has agreed to serve as a consultant for up to two years to assist with the executive transition and company strategy, according to Qwest. The carrier also reported that Philip Anschutz resigned as non-executive chairman of the board. Anschutz will remain a director and chairman of the board's executive committee, the company said.