US West bosses get fat pay raises

If you've ever wondered why more people are grumbling at work and morale is slipping, look no further than the giant phone company U.S. West Communications.

Just a few months after forcing employees out on strike for 15 days, U.S. West reported last week that its chief executive officer, Solomon Trujillo, will have his pay, stock options, bonuses and other benefits increased 62 percent to $4.3 million a year. Three other top officers will receive more than $1 million in salary and other compensation annually, getting increases ranging from 36 to 69 percent. The company's 1999 budget boosts compensation for all its top officers an average of 35 percent.

That doesn't sit too well with U.S. West employees, their union, Communications Workers of America (CWA), or the Oregon Public Utility Commission (PUC).

"It's absolutely outrageous," responded Madelyn Elder, secretary-treasurer of Portland-based CWA Local 7901. "I can't find one employee in our bargaining unit who thinks it's justified. We had to strike for 3.9 percent raises this year, 3.5 percent next year, and 3.5 percent the year after...that doesn't add up to 35 percent."

U.S. West employees had several reasons to strike. The Baby Bell company wanted to shift more of the cost of health insurance premiums onto them, it demanded continuation of a grueling mandatory overtime schedule (as much as 25 hours a week) - only at straight-time pay, and the company sought a pay-for-performance scheme that shifted some salaried workers to commission.

Elder said that since the new contract was signed the company is still forcing employees to work overtime. "They're trying to find loopholes in the contract language that limits us to 16 hours of overtime a week," she said. "It's so bad that we're planning a job-action next week" (after this issue of the NW Labor Press went to press).

The CWA has complained for years that U.S. West was laying off too many employees and forcing others to work excessive overtime. It also said the company's plan to relocate certain services out of state would not be beneficial to customers. The net result, the union maintains, is a slew of highly-publicized customer complaints about slow service.

Last month the U.S. West Territory Watch, a coalition that monitors the Denver-based company throughout its 14-state operating region, revealed a survey study showing customers having to endure "poor and at times terrible" telephone service.

A group of state utility regulators found "dramatically deteriorating service" throughout U.S. West's service area from 1991 to 1995, with little or no improvement in many areas, the study indicated.

In two recent surveys of Baby Bells by private market research firms, J.D. Power and Associates and the Yankee Group, U.S. West ranked last in local telephone service satisfaction. Hundreds of customers must wait a month or longer for basic telephone service and existing customers may go days without a dial tone while waiting for repairs, according to Territory Watch.

"And our people have to face these customers," Elder said. "They make us work overtime instead of hiring additional help; they move service centers to other states; they make us massage phone lines that just are no good any more instead of replacing them. The list goes on and on."

The Oregon Public Utilities Commission echoed the union's complaints about U.S. West. "These raises are absurd, abhorrent and insulting to the ratepayers," said Ron Eachus, chair of the Oregon PUC, explaining that U.S. West's overall service quality is not up to par and some small communities can't get additional phone service.

Eachus said ratepayers in Oregon shouldn't have to pay for the executives' raises, and he predicted the commission will require that company profits fund them instead.

Elder says that Trujillo "doesn't deserve to make more money than any one person can possibly spend in a lifetime."

But it didn't start with Trujillo. Last March, then-CEO Richard McCormick, Chief Financial Officer Michael Glinksy and General Counsel Charles Russ parted with multi-million-dollar "golden parachutes." Their severance packages entitled the executives to three times their annual salaries, bonuses and stock options, in addition to the standard pension plans and lifetime health benefits. McCormick is scheduled to receive $765,000 a year for his pension and Russ will get 41 percent of his highest salary (putting his pension in the neighborhood of $280,000 a year).

"We have single parents trying to make it on $10 to $12 an hour and working endless overtime so they can provide for their families," Elder said. "It's outrageous, but it seems the harder you work, the less money you're going to make."

U.S. West employs 52,000 people and operates in 14 states. It has 3,500 employees and one million customers in Oregon.

January 15, 1999 issue

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