Three US WEST executives will take home $45.1 million in severance payments once the company formally splits into separate telephone and cable-television businesses later this year.
The regional Baby Bell, in a filing with the Securities and Exchange Commission, said it will give Chairman Richard McCormick a $24.5 million severance package. Its top lawyer, Charles Russ, will get $11.3 million, and Chief Financial Officer Michael Glinsky gets $9.3 million.Those positions will be eliminated in the creation of a new US WEST for the phone business and MediaOne Group for the cable TV, cellular phone and overseas operations.
US WEST shareholders voted in October 1995 to split the company's businesses through the creation of two separate stocks. Parent US WESTInc., however, retained control of both businesses.
But US WEST announced last fall it planned to split into two separate companies, a move that is expected to occur after midyear following approval by shareholders and regulators.
McCormick will serve as "non-executive" chairman of the board of the new US WEST but will hold no operating position in the company.
McCormick, who is 57 and received nearly $2 million in compensation last year, insisted shareholders, not ratepayers, will be footing the $45.1 million package.
He said that his company's market capitalization has jumped to $48 billion from $30 billion last September, following the recommendation for a split in the businesses.
But consumer advocate Chuck Malick was wary.
"It just doesn't ring true with the rhetoric from US WEST that they are a tough, competitive company that has to keep costs down," said Malick. "The fact is that their profits come from a huge monopoly revenue stream and they're able to reward their executives accordingly."
Phone regulators are expected to review the severance package to ensure it is not bankrolled directly by ratepayers.