Many Americans can’t take new jobs because they are stuck in houses they can’t sell. That wasn’t a problem for Qwest CEO Edward Mueller. When it hired Mueller last year, Quest bought his California home, then resold it at a $1.8 million loss.
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Corporate fine print sleuth Michelle Leder has already tagged the sweet deal, detailed in Qwest’s proxy statement, as a candidate for footnote of the year.
Qwest hired Mueller in August, bought his Bay Area house in September for the “then-prevailing” market value of $8.9 million and sold it in December for $7.1 million.
Mueller’s old neighbors can’t be happy about the new comp for their homes. That’s a 20 percent haircut in just three or four months. Ouch!
This certainly qualifies as a corollary to the CEO mansion indicator we wrote about last year. Now, it appears, a company’s fortunes also deteriorate after it buys its CEO’s old mansion.
In early September last year, Qwest stock traded at about $8.80 a share. It briefly hit about $9.50 in early October but has slid since, closing at $4.54 Friday. At that price, $1.8 million buys nearly 400,000 shares.
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