OLD SPRING HARBOR, NY, Jan 09, 2012 (MARKETWIRE via COMTEX) -- The Association of BellTel Retirees ( www.BellTelRetirees.org ), representing 230,000 Verizon VZ +0.02% retirees and which has waged numerous shareowner proxy campaigns at the company over the last 12 years, is highly distressed by reports ("Verizon details $20 Million More in Pay," Wall Street Journal 1/5/2012) that Verizon failed to disclose to shareowners $20 million in additional compensation it paid out to former CEO Ivan Seidenberg in 2009 and 2010 alone.

The $20 million in undisclosed compensation relates to above-target payouts on Performance Stock Units (PSUs), a form of restricted stock that is the subject of a shareholder proposal that the retirees' Association received substantial support from Verizon's owners at the 2011 Annual Meeting (the same proposal has been resubmitted for the 2012 meeting).

At Verizon's Annual Meeting last May, Association President Bill Jones stated that the performance hurdle associated with these PSUs does not align with stockholder interests since "senior executives would receive 100% of the target PSU award for median performance" compared to a peer group of companies selected by Verizon's Board.

Included among the many shareowners are tens-of-thousands of retirees who purchased stock in our company over decades-long careers and since entering retirement. We entrusted the company with a fiduciary responsibility to provide a high level of transparency to all of the public owners of its stock.

Since beginning our proxy efforts a dozen years ago, we have found it necessary to pursue changes to corporate governance to rein in Verizon Executive Golden Parachutes, overuse of Shadow Profits from the pension fund, excessive Performance Stock Unit levels to award bonuses to senior executives and the need to seek a Truly Independent Verizon board of directors free of members with clear conflicts of interest. In total retiree proxy efforts have led to ten corporate governance changes to better protect the rights of shareowners.

Retirees make up the largest block of non-institutional share holders in Verizon and, as owners, we must all be vigilant to protect our rights. The Association has consistently campaigned against Verizon's liberal policy of granting stock bonuses for sub-standard results to senior executives.

Among our results in the proxy, in 2007 ABTR successfully spearheaded the passage of Say on Pay proxy at Verizon. At the time Verizon became the largest publicly traded company to enact such a measure.

If a retiree advocacy group gets there way this proxy season, top Verizon executives will see their pockets a little less full when the telecom giant’s stock is trailing in performance.

‘Verizon sets the performance bar too low,’ says C William Jones, president of the 112,000-member Association of BellTel Retirees. ‘Regardless of performance, Verizon pays up, even if the executive is terminated or retired. Senior executives can get 50 percent of their target award even if the company performs below the 30th percentile in its peer group.’ 

Now the 15-year-old association is calling on Verizon’s shareholders to actively support a proxy resolution that would grant bonuses to the company’s executives only when there is an uptick in stock performance compared with its peer companies. Verizon shareholders will meet on May 5 in Indianapolis.

The group, which represents 230,000 Verizon retirees, also claims Ivan Seidenberg, Verizon’s CEO, could still receive a stock bonus of $5.5 million even if the company ranks as low as 25 among 34 peer companies. 

In response to the allegations, Verizon spokesperson Bob Varettoni says the retirees’ statements are ‘false and misleading,’ and the company’s board has opposed the resolution. 

‘Verizon and our board are committed to being responsive and proactive to shareholders and implementing good corporate governance and compensation practices,’ Varettoni says. ‘This is demonstrated by measures the board has adopted over the years.’

According to the company’s proxy statements, the board says the proposal would ‘have the effect of severing the link between pay and performance and delivering compensation that is not competitive with Verizon’s peer companies’, while ‘incentive-based pay represents approximately 90 percent of a Verizon senior executive’s total compensation opportunity each year.’

James Hatch, a specialist in executive compensation and partner at the advisory firm EisnerAmper says, ‘What’s driving all this is Dodd-Frank. Shareholder groups have been trying to control executive compensation for a long time.’

Hatch believes that, under the Dodd-Frank legislation, boards will be concerned with recruiting and keeping the right executives. ‘Companies need to come up with the right strategies to satisfy shareholders,’ he says. ‘They need to be happy with the alignment of the pay program so there’s no long-term consequences on the sustainability of the corporation.’ 

Last year, the retiree association proposed the same resolution but was unsuccessful. 

Thursday, March 31, 2011

BY KATHLEEN LYNN

A group of phone company retirees says Verizon Communications should cut stock awards to top executives when the company's stock lags.

The 112,000-member Association of BellTel Retirees Inc. is asking Verizon shareholders to support a proxy resolution that would allow the payment of certain bonuses only when the company's stock performance is at least as strong as the median of peer companies.

"Verizon sets the performance bar too low," said C. William Jones, association president. "Regardless of performance, Verizon pays up, even if the executive is terminated or retires. Senior executives can get 50 percent of their target award even if the company performs below the 30th percentile in its peer group."

According to the retirees group, Verizon CEO Ivan Seidenberg could get a stock bonus of $5.5 million even if Verizon ranks as low as 25 among 34 peer companies. Verizon shareholders will meet on May 5 in Indianapolis.

The Verizon board opposes the resolution. A Verizon spokesman, Robert Varettoni, said some of the retirees' statements were false or misleading. The retirees unsuccessfully proposed the same resolution last year, he said.

"Verizon and our board are committed to being responsive to shareholders and implementing good corporate governance and compensation practices," Varettoni said. "This is demonstrated by measures that the board has adopted over the years."

In the proxy documents, the Verizon board said the retirees' proposal would "have the effect of severing the link between pay and performance and delivering compensation that is not competitive with Verizon's peer companies."

"Because so much of Verizon's total compensation program is performance-based, the program design suggested by the proposal could significantly increase the incentives to engage in risky behavior to increase total shareholder return at the end of an award cycle," the board wrote.

The retiree association, which was founded 15 years ago, won passage in 2007 of a "say on pay" resolution, which gives shareholders a non-binding voice on executive compensation.