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Verizon retirees coming to city to protest executive pay

May 3, 2011

The Association of BellTel Retirees Inc. will press the board of Verizon Communications Inc. to tighten standards for executive pay when the New York company holds its annual meeting in Indianapolis this week.

Verizon, which has more than 1,300 Indiana employees and often takes its annual meetings on the road, will meet at 10:30 a.m. Thursday at the University Place Conference Center, 850 W. Michigan St., on the campus of IUPUI.

The 112,000-member retiree association has a proxy resolution pending before shareholders that would limit “performance share unit bonuses” paid to senior executives.

The group said senior executives are awarded long-term equity awards that can amount to eight to 10 times their base salary.

“Senior executives can get 50 percent of their target award even if the company performs below the 30th percentile in its peer group,” said C. William Jones, president of BellTel Retirees.

Verizon CEO Ivan Seidenberg’s 2010-2012 target award for the performance share unit grant is $11.1 million. His 2010 base pay was $2.1 million.

Verizon recommends that shareholders reject the association’s proposal, saying compensation levels are comparable to peers. The company said the retiree group’s proposal is too “all or nothing” and could have the effect of providing no vesting below median performance measures—and 100 percent or more vesting at or above median performance.

The proposal “could significantly increase the incentives to engage in risky behavior to increase total shareholder return at the end of an award cycle,” Verizon stated in its response.

BellTel Retirees has been a thorn in the company’s side over the years by winning a number of proxy proposals, including limiting the number of boards on which a Verizon director can serve.

Among notable directors of the company are former U.S. Secretary of Transportation Rodney Slater, former Treasury Secretary John Snow and former Deere & Co. CEO Robert Lane.

Verizon’s presence in Indiana has shrunk in recent years. In 2009, it sold its traditional phone operations in Indiana and 13 other states to Frontier Communications for $8.6 billion.
 

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