May 3 (Bloomberg) -- Verizon Communications Inc., which paid Chief Executive Officer Ivan Seidenberg $21.3 million last year, said a shareholder vote on a proposal to give investors a say in executive pay decisions is too close to call.

Preliminary results showed the plan was narrowly defeated, and a final tabulation will be needed to determine the outcome, Verizon said today in a statement after its annual meeting in Pittsburgh.

Two more governance measures came close to passing, winning 47 percent of the vote and underscoring recent outcries for more oversight. Verizon, the second-largest U.S. phone company, became one of the main targets of labor groups that want to rein in compensation. The AFL-CIO said Seidenberg doesn't deserve the pay he received from 2002 through 2006 because Verizon shareholders have seen the value of their investment decrease.

``Now it becomes a question with Verizon of how they're going to respond to pretty broad discontent,'' said Dan Pedrotty, director of the AFL-CIO's office of investment.

Verizon shares rose $1.47, or 3.7 percent, to $41.07 at 4:01 p.m. in New York Stock Exchange composite trading. The gain, the largest in almost three years, came after Cablevision Chief Operating Officer Thomas Rutledge said that Verizon's packages of television, Internet and voice service are ``having an impact'' on his business.

The AFL-CIO, the largest U.S. labor federation, supported the compensation proposal, made by Bill Jones, president of the Association of BellTel Retirees Inc. in Easton, Maryland. It would give investors an annual non-binding advisory vote on compensation for the five highest-paid executives.

Final results should be announced in the next few weeks, Verizon spokesman Robert Varettoni said. The company will post the result on its Web site after the votes are tabulated.

Outcry

Increases in CEO pay are leading to calls for oversight. Home Depot Inc. ousted CEO Robert Nardelli in January, and his $210 million severance triggered a public outcry, prompting lawmakers to push for legislation to rein in executive pay. Pfizer Inc. CEO Hank McKinnell resigned in July after the AFL-CIO attacked his $6.5 million annual pension.

The Verizon vote may be narrower than the most closely contested vote thus far on an advisory vote proposal, according to Institutional Shareholder Services Inc., a firm that counsels investors on their votes.

Last month, investors at Merck & Co.'s annual meeting voted 49.2 percent in favor of such a measure, ISS data show. Merck Chief Executive Officer Richard T. Clark received about $10.2 million last year in salary, stock awards and other compensation.

AT&T Vote

Shareholders at AT&T Inc., Verizon's bigger rival, cast 44 percent of 4 billion votes in favor of a similar proposal on an advisory role in pay last week.

Many companies are considering similar proposals that would allow shareholders to advise on pay, and Verizon will ``closely monitor'' their progress, Varettoni said.

If the proposal doesn't pass, Verizon should still consider giving shareholders an advisory vote, said Jones of the BellTel retirees group. The association claims more than 100,000 members who have retired from Verizon and its predecessors.

``Even if we don't make it, it might promote change,'' he said in an interview.

Labor groups also endorsed proposals for a shareholder vote on executive severance agreements and for disclosure rules on consultants hired to advise on executive pay.

Both of those proposals received about 47 percent of votes in favor, not enough to pass, Verizon said.

The AFL-CIO didn't succeed in a campaign to withhold votes to re-elect members of the board's compensation committee. Each director received at least 90 percent of votes in their favor, Verizon said.

To contact the reporter on this story: Crayton Harrison in Dallas at tharrison5@bloomberg.net.

Last Updated: May 3, 2007 16:47 EDT