Form PX14A6G VERIZON COMMUNICATIONS Filed by: ASSOCIATION OF BELLTEL RETIREES
WASHINGTON, D.C. 20548
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
THIS LETTER IS INTENDED FOR VERIZON SHAREOWNERS ONLY
If you do not own Verizon stock, please pass this on to anyone you know who does. The Association
introduced the executive retirement plan proposal (Item 4) and Association Chairman Jack Cohen
introduced the Executive Severance proposal (Item 8), both described below. If you do not receive your
Verizon proxy statement by April 8th, contact your broker or call Computershare Trust Company at 1-800-
631-2355. PLEASE DO NOT RETURN PROXY CARDS to the Association.
DEAR FELLOW ASSOCIATION MEMBER:
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 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
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: The Company 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
Verizon continues to offer senior executive officers far more generous retirement saving benefits
than rank-and-file managers and other employees receive under the tax-qualified saving plans. We
urge you to support this proposal, submitted by the Association of BellTel Retirees, to prohibit the
practice of paying above-market earnings on the non-tax-qualified retirement saving or deferred
income account balances of senior executive officers.
The Verizon Executive Deferral Plan allows executives to contribute or defer compensation
significantly above the applicable IRS limits on 401(k) accounts, including without limit their
base salary and short-term bonus.
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).
Institutional Shareholder Services (ISS), the leading proxy advisory firm for institutional
investors, has recommended a vote FOR this proposal each of the past two years. In its 2018
proxy analysis, ISS concluded 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
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. Verizon provides a matching
contribution equal to 100% of the first 6% of base salary and short-term incentive compensation
that a participant contributes (Proxy, page 48).
Such massive disparities between retirement benefits offered to upper management and rank-
and-file employees create potential morale problems and reputational risk, which can
adversely affect shareholder value.
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 limiting above-market
earnings on senior executive retirement accounts and requiring shareholder approval of golden
parachute severance benefits are reforms needed to better align executive pay with shareholder
Please Vote Your Proxy Card FOR Item 4 and FOR Item 8.