Verizon Retirees Win 2013 Executive Compensation Change

Verizon Retirees Win 2013 Executive Compensation Change 
Propose Two Additional Proxies to Rein In Excessive Golden Parachutes
& Allow Long-Term Verizon Shareowners to Nominate Board Candidates 
COLD SPRING HARBOR, NY -- (Marketwired) -- 04/02/13 --   Retirees of
Verizon Communications Inc. (NYSE: VZ) have launched their 15th
annual proxy campaign to call upon major shareholders at one of
America's largest publicly traded companies to vote for retiree
resolutions that limit "excessive Executive Golden Parachutes" and
allow long-term Verizon shareowners owning at least 3% of the
company's shares to nominate candidates for election to the company's
board. 
The 128,000-member Association of BellTel Retirees
(www.belltelretirees.org) has proposed a series of successful
corporate governance and executive compensation changes over the last
15 years, first when the company was NYNEX, then Bell Atlantic and
now Verizon.  
The retiree group has achieved an unprecedented nine victories, two
by a majority vote (2003 Executive Severance- with support from 59%
of shares voting; AND 2007 Say on Pay -- with support from 50.18% of
shares voting) and seven others the company and its successor boards
negotiated off the proxy ballot.  
The retirees' most recent victory comes in 2013. As its proxy
statement discloses, Verizon agreed to substantially reduce the
payouts of performance-based stock that its senior executives can
earn for below-average stock returns. After the retirees filed their
proposal, the company's board of directors approved a reduction in
the amount of the Performance Stock Unit payout so that it became
more closely aligned with the retirees' proposal. 
The retiree association has two other proxies that will be on the
ballot leading up to Verizon's 2013 Annual Meeting on May 2 in Tulsa,
Oklahoma. The proxies include: 
Ballot Item # 8 -- The retirees proposed a new Severance Approval
Policy for Excessive Golden Parachutes, closing an existing loophole
in the company's executive severance rules. Severance packages
exceeding a total cost of 2.99 times an executive's base salary plus
target would require shareowner approval.  
In 2003 when the company was still Bell Atlantic, an Association
proxy proposal requiring shareholder approval for severance packages 
with a cash value exceeding 2.99 times base salary plus target bonus
received a majority vote (59% of the shares voting). It was the first
time any Bell System company's board lost a proxy vote. 
However, when Verizon's Board adopted the policy the following year,
it included a loophole that excludes the waiver of performance
conditions on "Performance Share Units" (PSUs) and "Restricted Stock
Units" (RSUs). Although the accelerated vesting of PSUs and RSUs can
amount to many millions of dollars, the cost isn't counted as part of
the termination payments that require shareholder ratification. The
retiree proposal would close this loophole, consistent with the
intent of the 2003 proxy approved by shareholders. 
Ballot Item # 7 -- Would amend Verizon's bylaws to allow shareholders
to nominate a limited number of directors for election to the Board.
The retirees say shareholders should be able to nominate a candidate
for Verizon's board, so long as the shareholder (or a group of
shareholders) own 3% of Verizon common stock for a period of 3 years
or more. The retiree association believes this bylaw amendment would
lead to enhanced accountability and allow long-term Verizon
shareowners to have a true voice in electing directors that are not
solely hand-picked by Verizon management. Hewlett Packard adopted
this same rule this year, as it was approved at H-P's annual meeting
with the support of 68% of outstanding common stock. 
"Retirees of Verizon have a significant vested interest in Verizon
and we want to see it do well," said C. William Jones, president and
founder of the retiree association. "The fact is 90% of the
Association of BellTel Retirees' members are Verizon customers and
72% are shareowners, many us supported the company via stock
purchases in our working years and have long had grave concerns about
management excesses."  
He continued, "The BellTel Retirees have demonstrated over and over
again that a group of small but very engaged shareholders can reshape
the compensation and governance policies of a corporate giant in a
manner that benefits all company owners." 
Past Successful BellTel Retiree Proxy Campaigns 
1. 2013 VZ board agreed to partially adopt a retiree proposal
tightening standards for awarding Performance Share Payouts to senior
executives when Verizon's performance is below the median compared to
its Dow Jones peer index;  
2. 2007 "Say on Pay" Advisory Vote on Executive Compensation -
Retirees win with 50.18% of the vote, effective for 2009; 
3. 2007 Corporate Governance Guidelines - The Board partially adopted
a retiree proxy limiting the number of boards a Verizon director can
serve on. A director who is an executive officer of a public company
is limited to three public company boards; other directors are
limited to six company boards. 
4. 2006 Performance Based Equity Compensation - Retiree proxy asked
that at least 75% of future senior executive equity compensation be
performance-based. 
5. 2005 Supplemental Executive Retirement Plan (SERP) - The Verizon
board agreed to rein in senior executive SERP. Previous SERP
contributions were 32% of combined salary plus bonus for every dollar
above $210,000 of salary. The old SERP was frozen and the new
contribution level reduced from 32% down to the rank-and-file level
of 4% to 7%. 
6. 2005 Board Composition - Revised guidelines to reduce the Verizon
board headcount from 21 to 12 or fewer members. Further, over time
Verizon agreed to align the board to meet the Association's proxy
definition of an "independent" board. 
7. 2004 Binding Executive Severance - Following the board's failure
to implement the 2003 proxy mandated by shareowners, the Association
proposed a new binding proxy causing the Verizon board to agree to
adopt the requirement of a shareholder vote to approve large new
severance packages. 
8. 2003 Exclude Pension Credits (Phantom Earnings) from Calculation
of Executive Compensation - Verizon's board agreed to stop using
Shadow Profits to enhance senior executive bonuses after retirees
receive over 40% vote in previous year balloting. 
9. 2003 Executive Severance - Retirees receive 59% yes vote. The
change limits overly generous golden parachutes and requires
shareholder approval for packages over the limit. It is the first
time an outsider proxy opposed by the company board wins at a Bell
System/former Bell company.  
Contact: 
Tom Butler 
Cell: 203-253-1050 
TButler@ButlerAssociates.com  
Stu Miller 
Cell: 908-246-0852 
SMiller@ButlerAssociates.com 
Victoria Carman 
Cell: 516-592-7072 
VCarman@butlerassociates.com  
Butler Associates, LLC. 
Tel: 212-685-4600
204 East 23rd Street 
New York, NY 10010 
 
 
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