They never stop thinking about shareholder value at

Qwest

(Q)

, as a look at CEO Joe Nacchio's recent paychecks will show.

With the stock hovering around a five-year low, Nacchio recently received an impressive 28% raise in his 2002 base pay. Moreover, the executive's bonus doubled -- even after a torrent of red ink forced the debt-heavy Denver telco to consider asset sales and other moves to raise scarce cash.

But Tuesday, Nacchio showed Qwest's shareholders that he knows he must do better. Qwest disclosed in a regulatory filing that Nacchio had postponed his raise during the first quarter, "based on the company's performance in 2001 and current market conditions."

Nacchio's hefty raise seems to run counter to the current Wall Street convention of at least talking about basing CEO pay on the company's performance. With Qwest facing a formal

Securities and Exchange Commission

investigation of its accounting and business practices, and the stock having dropped 80% since last January, this moment strikes some observers as an odd time for a pay party.

"Nobody noticed these things in the bull market," says a Wall Street analyst who declined to be named. "But in a year when a company has zero growth and it is hitting liquidity challenges, you certainly draw scrutiny when you give out significant pay raises."

Qwest needed to hang on to its top execs, and a pay raise is one way of doing that. "The compensation committee decided in October that they had to give higher retention packages given the upheaval in the industry," a Qwest spokesman says.

Cookie Crunch?

If Nacchio's windfall weren't enough to get investors worried about executives raiding the company cookie jar, Qwest also revealed in its proxy Tuesday that it lent $4 million to President and COO Afshin Mohebbi, effective April 1. Loans to executives have come under increased scrutiny since

WorldCom's

(WCOM)

handling of a $340 million

loan to CEO Bernie Ebbers, on account of a margin call on his WorldCom stock, came up in an SEC probe.

According to the proxy, a portion of the $4 million personal loan -- which carries a 5.5% interest rate -- will be used by the executive to pay the premium on his life insurance policy. A company spokesman said that the disclosure was self-explanatory and that the loan is "part of his compensation package."

The perk increases an already hefty pay raise for Mohebbi, though it must be noted that his well-deserved boost also was deferred until this month. The COO got an 11% raise and is slated for a bonus of $1.5 million -- close to three times his 2001 bonus.

Details of the new pay packages were revealed in the company's 10-K filing last week and in a proxy statement filed with the SEC on Tuesday. Nacchio's salary jumps to $1.5 million this year from $1.17 million, and his bonus is targeted at 250% of his base salary -- more than doubling his $1.5 million bonus last year.

Lots of Issues

This, of course is the same company that brought on a formal SEC

investigation by

aggressively booking

controversial network capacity sales to rivals. Qwest also got shut out of the commercial paper markets earlier this year and had to draw down its entire $4 billion credit line from its banks to fund its business.

And if keeping the execs ain't cheap, firing them is even more costly. Both executives would get more than $15 million if Qwest's board decides to oust them without cause, according to the terms of their new employment contracts.

As some observers point out, with guarantees like that, it's easier to ride out the hardship of a deferred raise.