COLD SPRING HARBOR, NY — (Marketwire) — 03/27/12 — The 128,000 member Association of BellTel Retirees () has introduced a proxy proposal to tighten the standards for awarding performance share payouts (PSU) to senior executives at Verizon (NYSE: VZ) when the company-s performance is subpar. Verizon-s annual shareholders- meeting is May 3, at the Von Braun Center (700 Monroe Street) in Huntsville, Alabama.
Under its current policy Verizon senior executives are granted annual long term equity awards with the potential payout of 5 to 10 times their base salary even if the company performs poorly. Senior executives can get 50% of their target award even if the company performs below the 30th percentile in its peer group. Verizon could finish as low as 25th among its 34 Dow Peers and executives would still receive bonuses well into six figures — and as high as $2.62 million in the case of CEO Lowell McAdam.
“That-s like Joe Girardi and Bobby Valentine receiving bonuses if the Yankees and Red Sox finish below second place and don-t make the playoffs,” said C. William Jones, president of the Association of BellTel Retirees. “Verizon sets the performance bar too low. Regardless of performance Verizon shareowners have to pay up, even if the executive is terminated, retires, or flat out does a lousy job.”
The Association is proposing (Item #6) that Performance Stock Units not vest or pay out unless Verizon-s shareholder return (TSR) is at least equal to or above the median relative to the company peer index selected by the Board. Under the Association of BellTel Retirees- proposal, if Verizon continued to use the same 34 company peer review index bonuses would be granted even if the company finished as low as 17th in its peer ranking.
Since its founding 16 years ago the retiree association has triggered numerous governance and compensation changes at Verizon, including limits on senior executive golden parachutes, golden coffins, performance based equity compensation and an annual shareholder advisory vote (“say on pay”) on executive compensation packages. Ninety percent of Association of BellTel Retiree members remain as Verizon customers and nearly seventy-two percent are company shareowners.