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Bill Esrey Tied To Countrywide Scandal

2008-08-20T01:06:00.009-04:00

The August edition of Portfolio magazine has fingered former Sprint chief Bill Esrey as receiving sweetheart loans from Countrywide Financial. The article implies that these deals saved Esrey $24,000 while he was the CEO of Sprint.

Portfolio also noted that the communications firm was hooking up a data network for the mortgage lender at the time of the deals. This means that Esrey probably broke Sprint's Code of Conduct. Did Esrey know about the data sale that the marketing department had made? Should he?

To be honest with you, I see this as a non-story.

CEO's and board members from all types of companies get big discounts on services and goods that most workers would never dream of getting. Free autos, free cigars, unbilled hotel stays, etc.

Execs get free stuff. Get over it.

Read the story, courtesy of the Kansas City Star here: http://sprintconnection.kansascity.com/?q=node/704
Don't forget to read the juicy comments below the story. The paper's readers are pretty well informed.

Here is my opinion:

In the 70's Bill Esrey built United Telecom into a force that no one saw coming. He had UTI involved in the cable business, security systems, computer mainframes, premise wiring, logistics, cellular telephones twice, built the fiber network that would be the hallmark of Sprint, and launched PCS. None of these companies (save PCS) lost money. When he sold off a unit, he plowed the cash back into the company to continue its growth (buying CTT, FTC, etc.)

When Esrey was forced out, he was in the process of discovering that last mile. It was his holy grail. It would allow Sprint to be a true telephone/internet provider anywhere - not just in the heritage United/CT&T/FTC/Centel areas. The last mile would allow Sprint to get into any home or business nationwide without using the local telco.

He was pretty close to a breakthrough with point-to-point MDS (another day and I'll explain it to you).

Discoveries made on this quest eventually lead to patents that Sprint leases to others. Right now all cable TV companies must pay Sprint for the technology that allows telephone and high-speed internet over their old-fashioned coax cable networks. These patents came from the failed ION experiment of the late 90's. So it wasn't really a failure after all. It just worked really well over cable lines, and pretty much stunk over phone lines.

But when Gary Forsee came into power, the focus for Sprint was moved completely to PCS, the fiber network, and a merger with a competitor.

Bill Esrey would never consider losing his beloved land-line business, telephone directories, and research centers. But Forsee disposed of them - and the cash they were bringing.

It is hard to believe that Bill Esrey was fired for using a tax-shelter that the company's own financial consultants designed and pushed. Esrey didn't dream up this shelter. It was offered to him.

For what it's worth - All of Sprint's managers and many hourly employees were offered advice on what to do with bonuses, salary, and options. From the Central Office in New Bern to the Executive Office in Overland Park - you took the advice of your financial planner and assumed it was legal. It was a company benefit.

Bill Esrey was forced out of a company that he built and nurtured, with $1o million severance pay, and 18 months of various benefits. Nothing more. Even his stock options were worthless.

But in two short years running Sprint, Gary Forsee blew up the whole damn company, destroyed another healthy one (Nextel), and evaporated every one's 401K/retirement...

...for this he gets $40 million severance and a million dollars a year for the rest of his life.

I'm surprised his photo isn't beside the words stupid and greed in the online dictionary. I just checked. He's not there.

As for Esrey, he shouldn't have to deal with magazine articles like this anymore. Think what you will of the man, but he was a leader, a bean-counter, and a visionary. He demanded accountability from his employees and respect from his peers. Rare qualities for a rural telco CEO.

I wish him well.

Official Lawsuit Documents are Now Online

2008-08-19T00:02:00.002-04:00

Sandals & Associates is the firm handling the largest retiree lawsuit against Embarq and Sprint Nextel. The group maintains an official website to keep everyone up-to-date on their progress. Anything concerning the lawsuit not publicized on this site is just rumours.

From the site's main page...

On this website, you can obtain answers to frequently asked questions about the case, review and download important documents, and get updates on the current status of the case. The website also provides information on how to communicate with the legal team representing the retirees and provide information that may be useful in the case.

A permanent link for this website has been added on the right-side column here at eq65. It is also here: http://www.embarqretireelawsuit.com/

Retiree: "It's either eat and have no insurance or have insurance and don't eat."

2008-08-18T00:30:00.000-04:00

Embarq retiree Bob King of Ocala, FL was featured in a Wednesday, January 2nd news article referencing the plight of older retirees and their hope for success in the courts. The newspaper is the Ocala Star-Banner and the complete article is online here: http://www.ocala.com/article/20080102/NEWS/801020337/1001/NEWS01#

Mr. King made a good case for retirees in the article; Some of which are reprinted here on eq65:

Robert E. King, 77, is one of 10 named plaintiffs in the federal lawsuit against Embarq and Sprint Nextel for alleged violations of federal retirement law - specifically, the Employee Retirement Income Security Act of 1974.

The plaintiffs seek class-action status to sue on behalf of approximately 13,000 retirees of regional and local phone companies in 15 states. The retirees worked for various companies that Sprint Nextel acquired over the years and then made subsidiaries of Embarq in May 2006.

Embarq was once Sprint-owned but is now a stand-alone, publicly traded company. It is the fourth-largest local phone carrier in the country with $6 billion in revenues each year, the suit says.

The suit focuses on Embarq's decision in July to cut off health insurance to all retirees who have reached age 65 and are Medicare-eligible. That change took effect Jan. 1. The company also is eliminating or reducing life insurance coverage for these older retirees.

"I am disappointed that it had to come to this, but Embarq and Sprint have left us no choice,"...

"And, I am angry because it is all about greed."

King worked in management for United Telecom of Florida, Sprint of Florida and other phone companies affiliated with Sprint from April 1959 until his retirement in 1993. He said the company's elimination of health insurance benefits means coverage that cost him and his wife $59 a month would now run them $400 a month.

"The sad part of it is there are people who are just barely getting by - old telephone operators and lower-level employees," King said. "I've always been in management, so I'm blessed, you might say. But some of these people are just getting by. They can't go out and get insurance. It's either eat and have no insurance or have insurance and don't eat."

King said following Embarq's move, his $13,000 life insurance policy is reduced to $10,000 and the $12,000 policy on his wife is eliminated.

...on the same day Embarq cut retirees' benefits, the company told shareholders that decision would save $20 million during the second half of 2007, would save $40 million on average each year and reduce long-term post-retirement benefit obligations by $301 million.

"They may say that it is for the benefit of the current employees, the stockholders, and the customers," King wrote in an e-mail to the Star-Banner. "But that is just not so. The money they plan to take from the older retirees who do not get cost-of-living increases and have only gotten one general increase in their retirement benefit in the last 13 years, will fund the ridiculously large bonuses of the CEOs."

The lawsuit also alleges that Sprint Nextel has a history of age discrimination...

WRAL: "...Sprint was in charge during most of the benefit plan's lifetime."

2008-08-17T01:23:00.009-04:00

On January 2nd of this year (2008), WRAL-TV Raleigh, N.C. aired a feature story on the retiree lawsuit against Embarq and Sprint Nextel. Plaintiff attorney Alan Sandals verifies that Embarq is not the lone defendant in the lawsuit. Former corporate parent Sprint Nextel is also a being sued.

The story is no longer available online. Selected excerpts are printed below. Highlights were added by eq65 and were not found in the original article...

Ten former telephone company employees, most from North Carolina, have filed a class action lawsuit against landline company Embarq Corp. and its former wireless parent, Sprint Nextel Corp., over Embarq's decision this summer to reduce or withdraw some retiree benefits.

...

The federal lawsuit claims Embarq violated federal law protecting retirement benefits and seeks to have those benefits restored. Plaintiff attorneys estimated the class action would cover almost 13,000 former Embarq and Sprint workers.

Plaintiff William Games, a 67-year-old retiree from Camden, North Carolina, said he expects to pay about $2,000 more for health care this year.

"It sure is a lot of money for all the retirees," Games told the News & Observer of Raleigh in a story Tuesday. "You were promised all this stuff after 40-some years with the company, and all of a sudden - bam! - you don't have it any more."

...

The 10 plaintiffs, eight in North Carolina and two in Florida, worked for and retired from local telephone companies that were subsidiaries of then-Sprint Corp. Sprint spun off its local division to Embarq last year following its acquisition of Nextel Communications Inc.

In reporting its second-quarter earnings on July 26 of this year, Embarq said it would eliminate medical coverage and Medicare premium subsidies for Medicare-eligible retirees and dependents, effective January 1.

It also capped life insurance benefits through company-sponsored plans for qualified retirees to $10,000, effective January 1, and eliminated life insurance coverage for retirees receiving benefits through a subsidiary company plan, effective September 1.

The company said the changes would reduce post-retirement benefit expenses by $20 million for the rest of the year and save the company $30 million a year beginning in 2008.

In the lawsuit, which was filed Friday, the plaintiffs argue that the company violated the Employee Retirement Income Security Act, or ERISA, by unlawfully revoking the long-standing benefit plan.

They also claimed that company officials told employees their benefits were protected for life and encouraged some of them to retire before changes to the plan occurred in 2001.

"If the benefits were not in fact secure from reduction or termination during retirement, then defendant Embarq and its predecessors in interest systematically misrepresented these benefits to plaintiffs and the members of the class," the suit says.

It includes Sprint in those allegations as Sprint was in charge during most of the benefit plan's lifetime.

"There's a legal question of whether you can ever get rid of the duty for benefits," said plaintiff attorney Alan Sandals. "If Embarq either doesn't want to or is incapable of honoring those benefits, Sprint is still liable."

The suit added that four of the plaintiffs have already filed charges of age discrimination against Embarq with the Equal Employment Opportunity Commission and they are still waiting for the agency to either take up their case or give the four the right to file suit themselves.

If the EEOC allows them to sue, they plan to add age discrimination to the class action lawsuit.

Embarq Retirees Feel Pinch, Fight Back: Health Benefits Cut Provokes Lawsuit

2008-08-16T02:03:00.006-04:00

From the January 1st, Raleigh, N.C. News & Observer...

William Games, a 67-year old retiree in Camden, enters the new year expecting to pay about $2,000 more for health care.

As of today, the company where Games worked for 42 years has stopped providing supplemental Medicare coverage. The company, Embarq, also eliminated a $500 annual cash subsidy that had helped pay for medications.

Now Games and nine other retirees in North Carolina and Florida are suing Embarq to get their health benefits back. The phone company, formerly known as Sprint, eliminated free life insurance for retirees in September and is implementing the other cuts today to save about $30 million a year in operating expenses.

The retirees, who filed a lawsuit Friday seeking class action status on behalf of about 14,000 Embarq retirees in 18 states, say they were misled into believing they had benefits guaranteed for life.

"It sure is a lot of money for all the retirees," said Games, a former lineman and construction foreman. "You were promised all this stuff after 40-some years with the company, and all of a sudden -- bam! -- you don't have it any more."

Embarq is among a growing roster of companies cutting retiree benefits. Large employers with local operations that have made the unpopular cuts include Nortel Networks, Goodyear and Caterpillar.

Company policies usually include small print reserving the right to change benefits, said Raleigh employee benefits lawyer Steven Long.

But Stewart Fisher, a Durham labor lawyer who is representing the Embarq retirees, says the phone workers have a strong case because the company systematically misled its workers into believing the retiree benefits were permanent. As a result, Fisher said, some workers took early retirement to lock in benefits, and many accepted lower salaries in exchange for lifetime benefits.

See the entire story here,http://www.insurancenewsnet.com/article.asp?a=top_lh&neID=200801011180.3.167_1ac7000000b1673c, courtesy of Thomson Business Intelligence Service.

And We're Back. How Have You Been?

2008-08-15T17:20:00.004-04:00

Eight months without updating eq65 is just about to kill me. So effective today...

eq65.com Is Back !

The site has been on hiatus since January 1st for one reason, and one reason only.
So let's get these false rumours out of the way...

No one paid me to shut up.
Google did not threaten to banish the site.
And lawyers haven't sent me anything to scare me off.

The answer for the eight month hiatus is simple. eq65 took a vacation when the retiree lawsuits began working through the courts.

Computers traced to Embarq corporate offices were combing over this site en masse daily to download articles and opinions gathered here.

The volume of downloads was overwhelming. With all of the stuff they copied from here, Embarq attorneys could formulate arguments against retiree opinions and facts.

Using eq65, Embarq officials were finding ways to use our own words against us.

In other words, eq65 appeared to become a reference book to the defense. We were showing them all our cards before we even had a chance to see the judge. Evidence of this was sent to me via email numerous times. It is simply the way big corporations work when faced with lawsuits.

So, with the return of eq65, I expect to continue referencing news articles and other opinions found on the web. But I have to bite my tongue and hold off on some items that I have been sitting on for months.

We can't give our case away. But we can't let eq65 die, either.

Welcome to 2008...

2008-01-01T02:14:00.000-05:00

Today marks another sad day for many Embarq/Sprint retirees. Just last year the company took most its retirees' life insurance back, and today many retirees just lost their company sponsored medical plans.

But there is still hope. The class action lawsuits against the companies are underway. This is an ELECTION year and politicians are looking for issues. Competition is eating away at Embarq and its retirees are no longer its community cheerleaders.

Things may change.

eq65 has compiled a new action plan based on your input. Look for it here in a few days.

And be sure to check the news box on the right. Our cause is in the news again. We won't let this company forget its promises.

Hesse to Leave Embarq. Gerke to Lead Company.

2007-12-18T10:04:00.000-05:00

BREAKING NEWS...

Dan Hesse is leaving immediately for the CEO post at SprintNEXTEL. Embarq announces Tom Gerke as its Interim CEO and William Owens as Chairman of the Board

For the latest news on this breaking story, click on the news links in the column on the right side of eq65.

Another Sunday Newspaper Feature: Benefit Cuts Stun Embarq Retirees

2007-12-15T22:53:00.000-05:00

From the Southern Pines, N.C. Pilot...

When Helen Kaylor received a letter last summer from Embarq, she didn't want to open it. "I got the letter and it read, 'Important Benefits Informa-tion; Open Immediately,'" Kaylor said. When she opened it she learned that Embarq, the parent company of her former employer, which was known as Carolina Telephone and Telegraph when she worked here, was taking away medical benefits for all Medicare-eligible retirees effective Jan. 1, 2008.

"I couldn't believe it," Kaylor said.

Embarq will alsodrop its $500 annual subsidy for Medicare premiums, as well as coverage that pays partial costs when Medicare payments are below 80 percent of treatment expenses. The company also is capping life insurance for retirees at $10,000. According to some sources, the cuts are expected to affect 14,500 retirees and their spouses.

In a letter sent to the affected retirees, the company said: "Recent developments in the Medicare marketplace make it more practical and efficient for Medicare-eligible individuals to purchase medical coverage directly through a national carrier or one of the many companies who specialize in the Medicare market than for EMBARQ to provide this coverage."

A spokesperson for Embarq reiterated that statement in a interview.

"The bottom line is to stay competitive," said Tom Matthews, a regional medical relations manager for Embarq." He didn't elaborate.

Kaylor is one of the many retirees affected by the decision that Embarq representatives say will save the company $30 million.

The Embarq Operating Companies are telephone companies owned by Embarq that serve the regions in 18 states formerly served by Sprint, United Telecommunications, and Centel. The company has about 20,000 current employees.

Read the entire story, here...http://www.thepilot.com/stories/20071216/news/local/20071216benefitcuts.html

Letter to eq65: "...retirees have a tremendous impact in the service area."

2007-11-28T00:24:00.000-05:00

From a Sprint Retiree...

It seems that since Embarq announced that they would stop providing medical benefits to their retirees that are Medicare Eligible, and reducing the life insurance for all, that their stock has taken a dive from the 60's dollar range to the 40's. I wonder if they have noticed this.

When I first came to work for the company I was told to keep the customers happy. They were really the ones providing my check. One satisfied customer can bring you 4 or 5 customers, but one dissatisfied customer can cost you 15 - 20 customers. Customer satisfaction was our #1 goal.

Yes, we are retired, but the retirees have a tremendous impact in the service area. We have worked in the area for years and know the people and they know us. We earned the customer's respect and that respect translated into respect for the company. We have boosted the company's image to our customers. Now the customers are hearing a different story from us. Now Embarq has a difficult time understanding that customers see what they are doing to us. It affects the respect and confidence that the customers have for Embarq.

Their money hungry attitude is seen by the customers as not only a untrustworthy attitude towards retirees that were faithful to them for their entire careers, but also a untrustworthy attitude towards the customers. When Embarq tries to draw customers with great promises, the customers look at the promises that they made to their retired employees and wonder, "Can I trust them?" The retirees that are struggling with their cut in benefits certainly are not going to tell anyone to trust Embarq anymore!!!

So rather than seeing Embarq as a community oriented business, they see it now as a group of money grabbing scoundrels that can not be trusted when they make promises. Not only in their promises to their retirees but as a company that the customers can not trust to keep its promises to them. That is part of the reason that they are loosing customers in such vast numbers.

The decrease in customers is also translating into a decrease in dividends to the stockholders, which Embarq say is part of the reason that they are taking these benefits from Retirees.

Maybe someone in the decision making branch of the company will wake up and smell the coffee.

Union Has a Good Case Against Embarq

2007-11-20T14:49:00.000-05:00

From the CWA National Website...

CWA Charges Embarq's Slashing of Retiree Health Care is Illegal
November 8, 2007

CWA this week filed unfair labor practice charges with the NLRB against Embarq, contending the company's announced plan to slash retiree health benefits for future as well as current retirees is a unilateral change that ignores its obligation to bargain with the union.

The company earlier announced that it would drop retiree health benefits entirely for employees hired or rehired after Jan. 1, 2008, and further, that it was cutting health care for current retirees who are Medicare-eligible, as well as capping their life insurance at $10,000. The latter cuts average $2,000 per year for each of the 14,500 retirees and dependents affected, both management and union.

The initial charges were filed in Tennessee and North Carolina and further charges will be filed in 11 other states where CWA represents Embarq workers. The company was created last year as the spinoff of Sprint's local phone operations.

Embarq Trades at 52 Week Low: 49.31

2007-11-20T00:26:00.000-05:00

July 26th, 2007 was the day Embarq dropped the bomb that it was breaking its promises to its retirees. EQ stock was trading at $61 per share. Yesterday it hit a new 1 year low: $49.31

Click the chart above to enlarge it.

While Embarq's executives continue trumpeting innovation and a renewed emphasis on service, Wall Street apparently sees things a little differently. The true story of Embarq is continued union unrest, angry retirees, misleading advertising, businesses that refuse to return from competition, and poor morale company-wide.

Workers in KC are stressed beyond belief.

The old Sprint mentality lingers at this company as well.

CEO Dan Hesse, said this to investors during the Q3 call:

"We have been focusing first and foremost on finding ways to decrease what we call bad load; for example, customers who call because they can't understand their bill which requires an EMBARQ service rep to spend time on the phone explaining that bill or customers who call with a service problem which requires us to dispatch a technician to their home or to their business."

What?!

Customers who need service from this company are classified as bad load?

To see what happens when a company puts profits ahead of customers, one need look no further than Sprint. KC brass decided to no longer delight customers, and went for profits above everything else. And today Sprint traded at a 52 week low as well: $14.67 Sprint is the ideal company to study in management schools today. Profits above service = disaster.

Embarq executives need to delight customers, empower employees, and keep promises to retirees. All three groups wield a big influence in the company's dial-tone areas. Until Embarq brings back simple honesty and integrity, profits will continue to slide.

No one wants to do business with robber-barons. And as the telco continues losing market-share like this, investors will continue avoiding EQ.

'A slap in the face': Embarq retirees latest to feel benefits squeeze

2007-11-19T00:38:00.000-05:00

Another weekend, and another Sunday feature story on Embarq's need to 'fleece the elderly for profit'.

When these news stories appear in a Sunday edition the readership is greatly increased. Plus, the Sunday paper usually lays around many homes for days at a time. This greatly enhances the story's exposure.

Thank you, Northwest Florida Daily News, for reporting our story.

Printed below are the first several paragraphs of the article. Again, for legal reasons, eq65 cannot reproduce the entire story.

For nearly 15 years, Embarq retiree James Kimbrell has enjoyed a generous retirement package. The medical and life insurance benefits have brought him peace of mind and helped pay for medications, doctor's visits and cancer treatments for his late wife, Ann. Kimbrell never imagined he could lose them, but that's exactly what will happen Jan. 1. Embarq, formerly Sprint, is eliminating medical benefits for all retirees and capping life insurance benefits at $10,000.

"It's a slap in the face," said Kimbrell, who worked for the companies that eventually became Embarq for a total of 39 years. "They were promised to me."

Crestview resident J.R. Clay, who worked 32 years at Centel and Sprint, agrees and has raised the idea of filing a class-action lawsuit. He has organized meetings for local retirees affected by the cuts.

"Every retiree was told that he would have this health insurance for the rest of his life," Clay said.

Click here for the entire story...
http://www.sprint-embarqretirees.org/News_Release/Northwest_Florida.htm

A New Web Address To Bookmark...

2007-11-18T23:58:00.000-05:00

A new web site targeting Embarq/Sprint retirees debuted today.

It's at http://www.sprint-embarqretirees.org/ and promises to keep an entire nation of telco retirees informed and involved.

If retirees from the Bell companies can have retirement sites, then why can't we? So far there is nothing on the internet like it for Embarq retirees. Our telco veterans really need a place to point their browsers for retiree news, reunions, marriages, etc. So this is a promising development.

The site is in its infancy today, but look for it to grow in the coming months.

Welcome to the web, sprint-embarqretirees.org !

And as for this site...

eq65 remains singularly focused on Embarq's theft of retiree benefits. Continue visiting eq65.com for newsclips, opinions, web-links, activism and education.

You deserved better from Embarq's leadership.

And eq65 is doing the best that it legally can to help you during retirement.

Thanks for reading!

Unholy Alliance Fleeces Social Security Recipients

2007-11-16T23:56:00.000-05:00

From Laura Rowley's column,

Money & Happiness

(as posted at Yahoo! Finance)

Virginia grandmother Ruby Fauntleroy, 74, knew something was wrong when her rent payment bounced shortly after her Social Security check had been direct-deposited into her bank account.

Fauntleroy went to the bank, where a teller told her that the account was frozen following notice of a court judgment and garnishment order by Capital One. Fauntleroy had been trying to pay off this $4,000 credit card debt for years, but dropped her monthly payment to $100 after her husband died and her income declined. Capital One sued, and won a judgment.

"I was just numb, I couldn't believe this could happen," said Fauntleroy. "I told the bank, 'You know nobody is supposed to take a government check,' but they did. I couldn't sleep at night, I couldn't eat. I thought, why are they doing this to me when I was trying to pay [my debt]?"

Read the rest of the article here...
http://finance.yahoo.com/print/expert/article/moneyhappy/53832

A quick summary of the column...

If you are retired, and having problems keeping up with credit card debt, it may be best to have your Social Security check mailed to a post office box. Otherwise, you may find your money in the hands of someone else. This practice is illegal. But apparently it is a growing problem.

Retiree Meeting Planned In Ocala

2007-11-15T14:59:00.000-05:00

Embarq Retirees have scheduled a meeting at the Ocala library on Saturday, November 17 at 10 a.m. in Conference Room C. Discussion will be focused on litigation, insurance planning, and progress so far.

The Sprint / Florida Telephone Company Retirees website is at http://www.sflltdretiree.com/

Are Minorities The Hardest Hit By This Theft?

2007-11-15T01:33:00.000-05:00

Earlier today your eq65 editor spoke with a former Embarq central office technician about the way minorities were treated at CT&T before Affirmative Action hiring and promotion practices.

Basically we wondered why a black man always seemed to be assigned to cleaning buildings and lifting heavy things. Suddenly, we both realized that many minority families will be hit especially hard by Embarq's theft of life insurance, removal of medical benefits , and even the removal of the corporate-matching program.

Years of doing the hard work, with much less pay, was to be rewarded these workers at their retirement. The pensions at retirement would be smaller in comparison to other retirees, but the medical and life insurance would make years of cleaning offices worth it.

The man I spoke with today remembered hearing something telling from the janitor. In essence, "My supervisor can't pay me a lot, my raises are small, but at 65 I'll be sitting pretty!"

He never thought of leaving for better pay, I guess.

I know that many African-Americans are executives at Embarq today. But that wasn't always the case. Ask around.

Years of unequal pay makes minority retirees particularly insecure today, because they are less likely to have disposable income to pay for health care. And without meaningful life insurance, they are not afforded a decent funeral. The sad thing is - they held on to those promises through years of assurance - only to see them stolen today - and when they need help the most.

So tonight I'm praying for the minority families affected by Ned Holland's decision. He's a greedy man. And I'm not about to let this go on without writing about it here.

Bucking A Trend; Embarq CEO Invests $1/4 Million in Company

2007-11-14T19:49:00.000-05:00

Dan Hesse, the chairman, president and CEO of Embarq bought 5,000 shares of common stock this past Monday. The shares were purchased at $50 a piece. This means that Hesse invested $250,000 into Embarq sans options.

That's the old fashioned way managers and executives invested in their companies prior to the arrival of the 'stock option'.

eq65 salutes Mr. Hesse for adding to - not taking from - Embarq's coffers.

Now if he could only right the wrongs done to the company's retirees!

NC AARP: The AARP Medicare Advantage Plan Is Not Really an AARP Product

2007-11-14T16:35:00.000-05:00

According to a story from this week's Raleigh News & Observer, the state office of the AARP warns retirees that the national organization has leased its name to other companies. In turn there is no AARP oversight of the plan or its customer service. Read the story here...
http://www.newsobserver.com/news/v-print/story/769501.html

AP: Changes Ahead For Medicare Drug Program

2007-11-14T13:24:00.000-05:00

Associated Press writer Kevin Freking has discovered a large disparity among Medicare Part D drug plans. On the low end, some monthly premiums are as low as $10. Enhanced plans can cost as much as $108.

With Medicare open enrolment starting tomorrow and running through December 31st, it pays to shop around for the best policy.

Read the entire A.P. article here, courtesy of the Raleigh, N.C. News & Observer...
http://www.newsobserver.com/2187/v-print/story/759235.html

Letter to eq65: Options Are Welfare For Executives Paid by Workers

2007-11-13T23:18:00.000-05:00

A frequent reader sent this to eq65 today. His point is valid and I really can't think of much to add. Except this: When an officer exercises an option, the money to pay him(her) comes right out of the corporation's cash profits. As the business shrinks, Embarq's board keeps granting these insane stock options to executives while those same executives steal benefits from the company's oldest retirees.

It smacks of executive greed, and lax board oversight.
I don't like it.

Here's the reader's note...

For companies not growing a customer base, I view stock options to officers and management as a form of welfare. These people already make too much in salary and perks; consequently, nothing can be done to lower prices and stop the bleeding or win back former customers. Emphasis is placed on layoffs, worker benefit cuts, and picking on those whose income is fixed so Wall Street can be placated.

Yet since near June, EQ stock has lost $15 per share.

Embarq has many problems that existing officers are not equipped to fix. Yet, go to this link and see all the selling among these 6 officers. Total sales of more than $25 million. And the site does not list sales less than $500,000
http://moneycentral.msn.com/investor/invsub/insider/trans.asp?Symbol=EQ

If the site is unreachable, here is the data...
Date======Name=============Transaction=Shares==Price(s)=Value===
11/05/07.....HOLLAND E J JR.............Sold.............27,408...$53.38....$1.46 Mil
07/30/07 ...CAMPBELL HARRISON...Sold..............34,752...$61.72....$2.14 Mil
05/07/07 ...HOLLAND E J JR.............Sold..............37,307...$62.79...$2.34 Mil
05/07/07 ...MCEVOY THOMAS J........Sold..............23,794...$62.85...$1.50 Mil
05/02/07 ...CHEEK WILLIAM E..........Sold.............61,285....$59.96...$3.67 Mil
05/01/07 ...BETTS GENE M.................Sold..............10,186...$60.00...$611,227
05/01/07 ...GERKE THOMAS A...........Sold............125,477...$59.86...$7.51 Mil
02/28/07 ...BETTS GENE M.................Sold............103,395...$55.80...$5.77 Mil
02/28/07 ...GERKE THOMAS A...........Sold...............22,124...$55.48...$1.23 Mil

Follow-Up: Options Sold As Part of Divorce Settlement

2007-11-10T14:00:00.000-05:00

A frequent reader did some research on the previous story posted here at eq65 (see below) concerning Embarq's Senior V.P. of Human Resources and his recent stock sell-off. Here's what he found...

According to the SEC filing, Ned Holland was forced to cash in half of his options due to a divorce settlement. Read the Form 4 filing here...
http://www.sec.gov/Archives/edgar/data/1350031/000118143107067274/xslF345/rrd177505.xml

From the notes on the Form 4: "Mr. Holland exercised 50% of his vested in-the-money options and sold the underlying shares pursuant to a property settlement agreement with his former spouse."

Mr. Holland did not include any explanations with his May 2007 exercise, seen here...
http://www.sec.gov/Archives/edgar/data/1350031/000118143107030607/xslF345/rrd157635.xml
One can assume that this sale was also a part of the settlement.

So if you have been wondering whether Mr. Holland is on his way out the door, then put those thoughts aside. It looks like he will be at Embarq for a while longer - and greedier than ever.

His 'ex' gets half!

Ned Holland Cashes In More Stock Options

2007-11-08T21:52:00.000-05:00

E.J. 'Ned' Holland cashed-in a lot of Embarq management stock options this week. The gross sale was $1,463,039 It is hard to figure the exact profit made with the sale, because the options were purchased for amounts between $15.37 and $33.86 per share. He sold 27,408 shares at $53.38

If you do the math on the numbers, he netted somewhere between $1/2 million to $1 million.

So why would a Senior VP at Embarq unload these valuable options now?

Only three reasons come to mind:

First - He really needs some cash right now. Maybe he has some personal debt that he wants to pay off, like a court settlement. Or maybe he wants to finish making payments on some real estate. He may want a building named after himself at a college, so he could have cashed-in for charity. He may even want to fund a study on Medicare and retirees! But whatever he wants to do with the proceeds, he needs the cash NOW.

Second - Mr. Holland may want to shift some of his assets to a retirement account or another investment - one that offers a better return than EQ stock.

Third - He may think that 53.38 is as high as EQ will trade for awhile, so he cashed-in while he could. If that's what he thinks - then Ned Holland is the wrong man for the job of Senior VP of Human Resources.

Please understand that stock options are not 'Free Money'. Any sale directly affects a company's bottom line. For more info, see Employee Stock Option and Insider Trading at Wikipedia...
http://en.wikipedia.org/wiki/Employee_stock_option
http://en.wikipedia.org/wiki/Insider_trading

He also cashed-in earlier this year. See...http://biz.yahoo.com/t/62/7073.html

The cash going to Mr. Holland this week comes right out of the expense budget at Embarq, just like your stolen benefits would, and decreased life insurance. That means he gets money that was supposed to go to you.

So while Mr. Holland belittles Embarq's retirees, raises premiums on those with jobs, and steals life insurance plans from their families, (all while screaming, "Competition! Competition! Competition!") - Isn't it nice to know that he, Ned Holland, the man that pulled the trigger, took home all that cash this week?

What a nice guy.

Please Visit the Association Of BellTel Retirees

2007-11-08T20:05:00.000-05:00

Please visit the Association of BellTel Retirees... http://www.belltelretirees.org/

They run ProtectSeniors.org and have been very helpful to all retired Americans, not just former workers of Ma Bell.

From the site's main page...

When HR1322 becomes law, it will guarantee continuance of your subsidized healthcare and give back money and services previously taken away. Part of our current objective, and it should be yours too, is to educate Congress and the Main Stream Media to the fact that removal of this "earned" benefit from retirees, constitutes a multi-billion dollar theft by corporate America. A theft of not a "promised gift," but an earned benefit no different than your pension! Yes, one which retirees EARNED by working 20, 30 or 40 years or more at less pay and fewer vacation days than we could have earned elsewhere.

Never allow any Radio/TV commentator or other news media person get away with saying something like this: "Corporate retirees are lucky their company still offers this gift." Or "Corporation X can't afford this benevolent "welfare" benefit for retirees anymore."

You, as a retiree, earned your healthcare benefit! It is not a gift! Call or write the offending media source and give them the facts. Tell them, how every year you worked, you were given an update of what your healthcare and other benefits in retirement were worth. During all your years of service you were constantly reminded by upper level management that your retirement benefits package was a real sweet deal. They always pulled this out when you were considering quitting. After all, it was a known fact at all levels of the Corporation, that this company would always take care of their retirees... How things have changed.

Please tell a friend who is retired from any US corporation or about to be retired about ProtectSeniors.Org It is not just for Bell or Verizon folks, it is for all seniors who have healthcare insurance subsidized by their former company. Refer them to the ProtectSeniors.Org website.

A permanent link for the Association of BellTel Retirees has been added to the right-side column here at eq65.

12 Things That All Embarq Retirees Must Do...

2007-11-04T03:19:00.000-05:00

Your eq65 editor has been tossing these items around on the hard drive for months. They come from readers and random notes written on scratch paper beside my keyboard.

eq65 is not set up to give orders, recommendations, or warnings. You come here for news, education, and opinion. But today is the day for a change. eq65 is posting the 12 things that Embarq retirees must do as January 1st approaches.

Email the site if you want to add an item, or if you disagree with one.

Here are the 12 items...

1)Get Involved Locally
Networking with other retirees is the best way to learn about potential legal action and alternative benefit plans. If no local retiree group meets near you, considering forming a new group with others nearby. The local meetings are what started the fight for action, and they continue to be the best source for accurate information.

2)Contact Elderly Retirees
The way that Embarq presented its benefit theft in the mail was classic PR double-talk.

The staff that designed the mailings and retiree web page should go to work for the Internal Revenue Service. Can you imagine the audit notices that they would send? It would say, "Congratulations! You have been randomly selected for our free accounting service! We at the IRS are ready to help. Please call the number below today so that we can set up your free session!"

The point here is simple. A lot of older retirees think that this is a wonderful thing that is about to occur on January 1st. "The letter said so!" They have been discarding the Aetna mailings because they don't want to change away from what they have right now. They just do not understand that their benefits are going away. Please find these elderly people and inform them about what Embarq is really doing.

3)Watch Out For Swindlers
Insurance agencies (good ones and bad ones) are starting to advertise in many newspapers with ads targeted directly to Embarq retirees. Most of these ads do not have the insurance company's name included. You may think that the upcoming meeting publicized in the paper is a retiree function. But it may be an insurance pitch, retirement scam, or pyramid scheme. Don't be taken by the crooks. They know that Embarq retirees are now in a pinch - and they smell money. Please be careful!

4)Write Your Local Newspaper
Letters to the editor are a great way to get the story out. Editors sometimes choose to follow-up these letters with their own stories or editorials.

5)Contact Your State and Federal Legislators
Postcards are really inexpensive. Emails are free. Let everyone in power know your story. When contacting your U.S. House Member, be sure to tell them to support House Bill HR1322.

6)Join The Legal Fight
Don't worry about potential cost at this point. Just fill out the interest form and be heard. Write out your hardships. If money becomes an issue later in the legal fight, it appears that financial help may be available.

7)Tell Your Story To Everyone
Word-of-mouth is powerful. Tell your beautician, pastor, doctor, mechanic, brothers, sisters, and grandchildren. This is a theft of your earned benefits by a corporation that rakes in over a billion dollars every three months. Let everyone share your anger. Embarq is NOT a communications company that honors its commitments.

8)Don't Change Your Story Due To Coercion
You paid a price to build Embarq. You gave away your youth for a promise of financial and medical assistance when you were older. Don't let anyone tell you anything differently. The phrase "I was lead to believe, that when I retired..." is what Embarq's legal machine wants you to say. Don't EVER say that. Instead, tell it like it is! Say, "I was told, that when I retired...". See the difference? A jury will.

9)Maintain Your Integrity
Words that you say, or type, should be honest and heartfelt. Anger and sarcasm is O.K. at times. But by all means - never lie. Honor your fellow retirees. Don't make up stories or spread rumour. Be bigger than Embarq's PR people - have integrity.

10)Stay Informed
Don't become so discouraged with Embarq that you ignore the coming change. Go to meetings. Read all of your Embarq mailings. Check Google or Yahoo News for 'Embarq'. Visit protectseniors.com, union sites, and eq65.com

11)Don't Buy Into Rumour
Embarq's executives would love for you to think that your pension will vanish if your benefits are restored. Or that the company is so close to bankruptcy right now, that any legal action would result in worthless stock and pensions. Don't be taken in by rumours. Embarq is healthy. And they want most of your earned benefits back to grow the company - and executive pay.

12)Plan For The Worst
Finally, look for good insurance/medicare plans. They are available, but not free. Your local lunch club is a great place to discuss the options.