Verizon Retirees: Don’t Prioritize Executive Compensation Over Shareowner Interests
27 Marzo 2020 - 5:30PM
Retiree shareholders at Verizon (NYSE:VZ) will present two
proposals at this year’s annual meeting in an effort to rein in
runaway executive compensation. The 2020 annual meeting is
scheduled for May 7 in San Diego.
One proposal would require shareholder approval of any Verizon
“Golden Parachute” plan (Item #8) that pays out
severance or termination payouts that are equal to or greater than
300% of an executive officer’s base salary plus target short-term
bonus.
For example, Verizon discloses in the proxy statement that if
CEO Hans Vestberg is terminated without cause, he could receive an
estimated $39 million in termination payments, nearly seven
times his 2019 base salary plus short-term bonus.
“No one objects to a reasonable severance payout in the right
circumstances,” said Jack Cohen, Chairman of the non-profit
Association of BellTel Retirees (www.BellTelRetirees.org).
“But some of these golden parachutes are so huge they make no
economic sense. That’s why we propose a shareholder vote on
golden parachutes above a certain size.
“Shareholders, who invested our trust and, perhaps, life savings
in Verizon, do not comprehend why it makes good business sense to
throw excessive compensation at executives who might already be
walking out the door.”
Last year, this proposal received 37% support from
shareholders.
Every year for nearly two decades, the company’s own retirees
have sought corporate governance and executive compensation
reforms, winning majority support for three proposals and achieving
partial reforms on numerous other issues, including the initial
adoption of a Golden Parachute approval policy.
A second executive compensation reform proposed by BellTel
Retirees seeks to limit guarantees of “Above-Market Returns on
Nonqualified Executive Savings Plans” (Item #4).
The proposal targets an investment option offered only to senior
executives that allows them to reap “above-market earnings” on
portions of their nonqualified retirement savings.
“Gross disparities between the retirement benefits offered to
senior executives and the benefits for most other employees can
risk employee morale and damage long-term stock value,” Mr.
Cohen asked. “What’s good for a few
executives, personally, may not be in the corporation’s best
interest or the interest of shareholders.”
Media Contacts: Brian Kirsch - Butler
Associates bkirsch@Butlerassociates.com (646) 205-7627
Tom Butler - Butler Associates tbutler@butlerassociates.com
(646) 213-1802
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