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For Verizon's announcement of the board actions reported in the article below, see

Note:  C. William Jones and James F. Reda, referenced in the article below, have been serving on the Advisory Panel of the Options Policies Forum that initiated attention to advisory voting issues in 2006 and subsequently developed principles for cooperative adaptation of policies.  It should also be noted that the Association of BellTel Retirees, of which Mr. Jones is President, supported the organization of the current Verizon Forum program to examine the information needed by investors to understand how compensation incentives relate to the achievement of corporate performance objectives.


New York Times, November 2, 2007 article


The New York Times




November 2, 2007

Verizon to Put Executive Pay to Shareholder Vote

Directors at Verizon Communications, under fire from shareholders over executive pay practices, said yesterday that they would put the company’s compensation plans to an annual vote by investors beginning at its general meeting in 2009.

The decision by the directors came after a vote by Verizon shareholders last May in support of a “say on pay” proposal put forward by the Association of BellTel Retirees, a shareholder group. Some 50.18 percent of Verizon shares cast at the annual meeting favored giving investors the right to vote up or down on pay practices each year.

In a statement announcing the change yesterday, Sandra O. Moose, presiding director of the Verizon board, said: “We believe that it is important to engage in an ongoing dialogue with shareholders and others.”

C. William Jones, executive director of the BellTel Retirees, said he was delighted with the board’s decision. “I’m somewhat puzzled as to why they are delaying it till the 2009 meeting, but it certainly is a step in the right direction,” Mr. Jones said.

As executive compensation has rocketed in recent years, proposals that would give shareholders the right to vote on pay packages have gained in popularity. During 2007, according to RiskMetrics Group, a majority of shareholders at seven companies has voted in favor of such proposals. In September, for example, 69 percent of shares cast at the annual meeting of Activision, a video game maker in Santa Monica, Calif., supported a say on pay proposal.

Last year, Ivan G. Seidenberg, Verizon’s chief executive, received a pay package worth $20 million, 11 percent more than in 2005, according to Equilar Inc., a compensation research firm in San Mateo, Calif. In earlier years, Mr. Seidenberg received sizable pay increases even when the company’s performance was lackluster.

James F. Reda, an independent executive pay consultant in New York City, said most United States and foreign investors he talks to favor say on pay proposals. “I don’t really see any investors who don’t like them,” he said. “But most directors hate say on pay because it undermines them.”

Such proposals clearly state that investor votes on pay are merely advisory, meaning that the company can ignore the view of shareholders.

The board of Verizon also adopted two other policies yesterday related to executive compensation. The directors amended Verizon’s executive severance policy to define more specifically the types of payments that are included when calculating the amount of severance owed to an executive.

Another policy requires that the independent compensation consultant employed by the board will provide services only to the human resources committee and not to other units of the company.


Copyright 2007 The New York Times Company




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