Retiree group to vote against Verizon CEO's pay

NEW YORK — A group representing 100,000 retirees said Tuesday it is going to vote against the pay package for Verizon's chief executive, saying it's overly generous.

Verizon Communications Inc.'s Ivan Seidenberg is one of the first CEOs at a major company to face the need to justify his pay directly to shareholders.

At the phone company's annual meeting on May 7, shareholders will vote on whether his 2008 compensation package is reasonable. The vote won't be binding, but if the Association of BellTel Retirees is joined by major shareholders and pushes through a "no" result, it would be embarrassing to the company.

Seidenberg earned a pay package valued at $20.2 million in 2008, according to Associated Press calculations, essentially the same as in the previous two years. At face value, he is the best-paid CEO in the U.S. telecommunications industry, though much of his compensation is in stock that has fallen in value since it was granted.

The company introduced the "say on pay" provision _ giving shareholders an advisory vote on the compensation package _ after a proposal to institute a similar provision gained a slim majority of votes at the 2007 annual meeting. That nonbinding proposal was introduced by the BellTel Retirees.

Among other things, the association criticizes Verizon for being generous with its shares, saying executives get bonus stock even if Verizon's stock underperforms its peers. Last year, the New York-based company's stock fell 22.1 percent in 2008 after accounting for a spin-off, while the S&P 500 index fell 38.5 percent.

Verizon spokesman Bob Varettoni said the company's compensation programs "promote a performance-based culture and align the interests of shareholders and executives by linking a substantial portion of compensation to the company's performance."

At this year's annual meeting, the retiree's association is also sponsoring a proposal to separate the roles of chairman and chief executive. Seidenberg now holds both titles.

The Associated Press calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.

Comments

[111]

02:47 PM on 04/02/2009

The article leaves out additional information that was sent to retirees -

Executive Pensions: ... the new nonqualified defined contribution plan ... applying benefit formulas more generous than those that apply to rank-and-file managers or employees. For example, Seidenberg received $814,000 in SERP compensation for 2008: A $491,226 Company contribution to his non-qualified plan for 2008 and, in addition, $322,862 in "above-market earnings" on his non-qualified plan assets. (Compensation Tables, pp. 40-41).

Tax Gross-Ups: Since Verizon executives apparently find it burdensome that the IRS treats company payments for personal travel and life insurance as income, the shareholders reimburse them for taxes as well - a widely-criticized practice known as "tax gross-ups." (Proxy pp. 41, 51).

Golden Parachutes: If CEO Ivan Seidenberg is terminated or even retires, he receives a $30.5 million severance, more than five times his base salary plus bonus. He receives $29.2 million after a change in control if he is not terminated. President & COO Dennis Strigl would receive an even larger $40 million if he terminates after a change in control - a platinum parachute that is 13 times his base salary plus bonus.
Golden Coffins: Upon termination of employment due to death, Seidenberg would receive an additional $35.5 million, while Strigl would receive $50.8 million. This is over and above any pension or deferred compensation (which pay out tens of millions more).

[mrcontinental]

11:56 PM on 04/01/2009

Retirement in this country for the working class is now a thing of the past. If you are currently under 60 be prepared to work until the day you die.

And no I'm not joking. Your meager wages will soon be tax at well over 50 percent, inflation adjusted, with more to follow.

[Mixpixlix]

07:48 AM on 04/02/2009

That's if you can get hired. As someone who has been unable to fi nd work for 5 years, I know first hand the difficulty. Education doens't matter, experience doesn't matter, nothing seems to matter.

I applied for a job at one of the Big Box home improvement chains and was told I wouldn't fit in. why...because I spoke too well.

So not only are those of us who saved (many did) for retirement at risk of losing what we put away, there's little chance of finding employment to help make up the loss.

[bebrave]

10:01 PM on 04/01/2009

Those are the greedy B@st@rds who should be nationalized. Verizon is only second to the oil companies in my opinion. Talk about soaking the working man (woman)

[biabouman41]

09:47 PM on 03/31/2009

ALL of us who own shares in these variety of companies are going to have to push much harder to bring them under some kind of reasonableness in executive pay scales. They are bleeding these companies dry and pension fund managers are the main ones just sitting around fiddling with their fingers whilst this happens. Pension fund managers just go along with whatever these executives demand. They have our votes in their hands, but do not exercise them in our interests. Do we need to get a change in the laws to allow us to use our votes to our benefit?

[Grannysue]

03:50 PM on 03/31/2009

I renewed my Verizon wireless bill, for two years, boy what a mistake. I renewed it on line, they said the monthly fee was $39.95, and I got a free Blackberry, so I took it. Never had one before, anyway, when I got my first bill it's $87.00? I called, yes when you have a Blackberry there is a web fee, email fee, this fee that fee. Good grief, I'm a senior I don't need all that crap, then they told me if I cancelled I would owe for the Blackberry, which was suppose to be free, and it would cost me $175.00 to cancel.
Needless to say I can't afford to do that. I'm simply going to have to bite the bullet until this thing ends and then I won't sign anymore contracts period!!!

[biabouman41]

09:35 PM on 03/31/2009

This sounds fraudulent. Get in touch with a consumer group or a lawyer and get out of it.

[AmandaRuth]

09:47 AM on 04/01/2009

agree with the above, if your local newspaper or tv station has a consumer advocate, get in contact. This sounds like a scam at best, and fraud at worst.

[jacobnyc]

11:29 PM on 03/31/2009

I'm so sorry that you have to go through this ordeal. Worse comes to worse, I would advice you to cancel the phone and pay the $175. I don't see why you should continue to pay an additional $50 when you clearly don't need the Blackberry service. In less than 4 months you would have shelled out close to $200 and you would continue to loose money until the contract ends. In my opinion, its not worth it. I hope this helps and you don't loose any more of your money.

[DestinationsUnknown]

02:42 PM on 03/31/2009

That latest spin off was Idearc- it has been de listed off the NYSE.

[DestinationsUnknown]

02:40 PM on 03/31/2009

May I remind you, over the last 8 years, with all the tax breaks to all those small businesses, wages have decreased. Where did those tax breaks go?

Verizon spun off their union relations in New York a few years back; Verizon is headquartered in Dallas, Texas. Look at their government contracts over the last 8 years.

Who is the more secured American: the Union pensioner or the 401K pensioner?

GM CEO Rick Wagoner is walking away from this failed company with 20 million USD.
Not a bad deal-I guess that is the American Way-for some folks. Food stamps for the laid off workers-BEG!

What do those southern Senators think now?

[ReesieKitty]

01:42 PM on 03/31/2009

You know what? I don't believe that anyone, doing ANYTHING deserves to be paid 20 million dollars a year. What are you going to do, realistically, with that much money? You couldn't make it on, say 10 million or even 5 million? I am so sick of hearing the free market capitalists going on about how it is 'un-American' to take money away from people who worked hard to 'earn' it. PEOPLE- NO ONE WORKS THAT HARD. If you cured cancer, maybe. Or invented an instantly available perfect fuel that was cheap and healthy for everyone and everything. Or saved the Earth from crashing out of orbit into the Sun. Maybe then you earned 20 million last year. Otherwise, I say screw that. No one, certainly not the head of a telecommunications network, did ANYTHING worth that amount of money and I hope his shareholders vote this down.

[gladiator777]

01:08 PM on 03/31/2009

Totalitarian state here we come.

[cyoohoos]

01:19 PM on 03/31/2009

What an ignorant comment. This is capitalism and democracy at its finest.

Shareholders OWN the company and have an absolute right to vote their shares. The # of votes is directly correlated to the number and type of shares. They should embarass Verizon over a 20 million dollar pay package, that's outrageous.

[gladiator777]

01:46 PM on 03/31/2009

Should we go after professional athletes next? If you think the CEO's pay package is terrible why not rant about everyone else that makes that much money?

[DestinationsUnknown]

02:36 PM on 03/31/2009

May I remind you, over the last 8 years, with all the tax breaks to all those small businesses, wages have decreased. Where did those tax breaks go? Please, educate us Mr. Dionne
GM CEO Rick Wagoner is walking away from this failed company with 20 million USD.
Not a bad deal-I guess that is the American Way-for some folks.

May I remind you, over the last 8 years, with all the tax breaks to all those small businesses, wages have decreased, that is a fact. Where did those tax breaks go?

Food stamps for the laid off workers-BEG!

Verizon spun off their union relations in New York a few years back; Verizon is headquartered in Dallas, Texas. Look at their government contracts over the last 8 years.

Who is the more secured American: the Union pensioner or the 401K pensioner?

What do those southern Senators think now?

[ibsteve2u]

02:41 PM on 03/31/2009

Now that is hilarious. Here you have capitalism and democracy intimately intertwined - stockholder voting - and you interpret it as totalitarianism on the horizon.

In fact, the actions of the Verizon stockholders are a threat to what "the right" and "corporate America" have been attempting to foist upon America: A hereditary and money-centric aristocracy where individual rights must bow to individual wealth.

[solid]

01:03 PM on 03/31/2009

Can you hear me now m@therf*cker?

[cutandrun]

12:43 PM on 03/31/2009

Here's hoping the "Let them eat cake" segment of management is listening. They are remarkably tone deaf........

[Hank10303]

12:41 PM on 03/31/2009

Reducing excessive executive pay will reduce the cost of production of goods and services which in turn will restrain and limit inflation. We always assume that the rising cost of goods and services are due to the raising cost of raw materials. In part but the cost of those raw materials are only a fraction of the raising cost of executive pay. Shareholders need to control their board of directors and the board of directors need to rein in excessive pay and golden parachutes. Executive pay and compensation is one half of inflation.

[Lefty08]

02:21 PM on 03/31/2009

Amen to that.

[RJII]

12:35 PM on 03/31/2009

change is here

[Sarahmay57]

12:18 PM on 03/31/2009

It's time for these publicy held corporations to be held accountable...and their CEOs too, of course.

[jerrypl]

11:47 AM on 03/31/2009

Now the public's pushback against the financial crime syndicate embedded inside the boardrooms of mega corporations will be seen. What we now need is the justice department to after this syndicate. The CEOs all need to be investigated and see exactly what their company's financial gambles have been all about. Was Verizon involved in selling swaps, too? What was their CFO up to?

http://eye-on-washington.blogspot.com