Form PX14A6G VERIZON COMMUNICATIONS Filed by: ASSOCIATION OF BELLTEL RETIREES
SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
NOTICE OF EXEMPT SOLICITATION (VOLUNTARY SUBMISSION)
NAME OF REGISTRANT:Verizon Communications Inc.
NAME OF PERSON RELYING ON EXEMPTION:Association of BellTel Retirees
ADDRESS OF PERSON RELYING ON EXEMPTION:P.O. Box 33, Cold Spring Harbor, New York 11724
Written materials are submitted pursuant to Rule 14a-6(g)(1) promulgated under the Securities Exchange Act of 1934:
Senior Staff Manager
DEAR FELLOW VERIZON SHAREOWNER:
We urge you to vote FOR Item 4 and FOR Item 8 on Verizon’s proxy card for the upcoming Annual
Meeting, scheduled to be held May 2nd in Orlando, Florida.
Item 8: Vote FOR the “Severance Approval Policy”
While we support generous performance-based pay, we believe that requiring shareholder approval of
“golden parachute” severance packages with a total cost exceeding 2.99 times an executive’s base salary plus
target short-term bonus is a prudent policy that will better align compensation with shareholder interests.
Verizon’s 2019 Proxy discloses (page 66) that if CEO Hans Vestberg is terminated without cause, whether or
not his termination follows a change in control, he will receive an estimated $27.6 million in termination
payments, nearly seven (7) times his 2018 base salary plus short-term bonus.
These termination payments are in addition to compensation that is earned prior to termination, including
pension plans, deferred compensation plans, and executive life insurance benefits, which pay out millions
A decade ago, following a 59% shareholder vote in favor, Verizon adopted a policy to seek shareholder
approval for severance with a “cash value” in excess of 2.99 times salary plus target short-term bonus. But
the current policy has a huge loophole, in our view: Verizon’s policy excludes the value of the accelerated
vesting of performance shares (PSUs) and of restricted stock (RSUs), including accrued dividends, from the
total cost calculation that would trigger the need for shareholder ratification (2019 Proxy, page 49).
If a senior executive terminates after a change in control, “all of that [executive’s] then-unvested PSUs will
fully vest at the target level performance” (2019 Proxy, page 49). Had the executive not terminated, the PSUs
would not vest or pay out until the end of the performance period – as long as 3 years later – and could be
worthless if performance compared badly to the Dow Peer index and free cash flow metrics used by the
Board. And because PSUs and RSUs are by far the largest component of compensation, this loophole
excludes the majority of severance payouts from the 2.99 times salary plus bonus threshold that triggers
the need for shareholder approval.
For example, former CEO Lowell McAdam will receive an estimated $27 million in separation payments due
to his retirement at year-end 2018, nearly five times his 2018 base salary plus short-term bonus. These
payments represent the estimated value of performance-based equity grants that cover periods ending Dec. 31,
2020 – as long as two years after his departure (2019 Proxy page 66).
Item 4: Vote FOR Limiting “Nonqualified Savings Plan Earnings” for Senior Executives
We urge you to support this proposal, submitted by the Association of BellTel Retirees, which
urges prohibiting the practice of paying above-market earnings on the non-tax-qualified
retirement saving or deferred income account balances of senior executive officers.
Institutional Shareholder Services (ISS), the leading proxy advisory firm, recommended a vote
FOR this proposal in 2018, concluding that paying “above-market earnings on investment options
is not common market practice” and “is not a best practice, as this additional cost has no basis in
The Verizon Executive Deferral Plan allows senior executives to contribute or defer
ompensation significantly above the applicable IRS limits on 401(k) accounts, including without
limit their base salary and short-term bonus (and, until 2018, their long-term equity compensation).
For example, in 2017 then-CEO Lowell McAdam received $73,949 in “above-market earnings”
on his nonqualified plan assets (2018 Proxy, Summary Compensation Table, page 46, column h).
For CEO McAdam, these above-market earnings came on top of $325,150 in Company
matching contributions to his Executive Deferral Plan account and $18,850 to his
Management Savings Plan account (2018 Proxy, page 47).
The $418,000 in total Company matching contributions and “above-market earnings” received by
McAdam for just one year dwarfed the maximum Company contribution available to managers or
other employees participating only in the tax-qualified Savings Plan. (2019 Proxy, page 48).
Above-market earnings on non-qualified accounts are not performance-based and thus do nothing to
align management incentives with long-term shareholder interests.
We also urge you to use your “say on pay” to vote AGAINST Item 3: “Advisory Vote to Approve
Executive Compensation.” A No Vote will send a message that requiring shareholder approval of
windfall severance benefits and limiting above-market earnings on senior executive retirement
accounts are reforms needed to better align executive pay with shareholder interests.
Please Vote Your Proxy Card FOR Item 4 and FOR Item 8.