Verizon Agrees to Yearly Advisory Vote On Executive Pay
Friday, November 2, 2007
Verison Communications will hold a vote each year for investors
to weigh in on executive pay, the second time a U.S. company has
allowed such a measure.
The advisory vote will begin in 2009, Verizon said yesterday in
a statement. Shareholders passed a proposal in May calling
on the company to adopt such a measure.
Verizon, which paid chief executive Ivan G. Seidenberg $21.3
million last year, has been one of the main targets of labor
groups seeking to rein in compensation. The AFL-CIO said
Seidenberg didn't deserve the pay he received from 2002 through
2006 because Verizon's share price fell during that time.
"This is a victory," said Dan Pedrotty, director of the office
of investment at the AFL-CIO, the largest U.S. labor federation. "They
should be commended for adopting it."
The New York
company should allow a vote before 2009, and investors still
have a "a high degree of disapproval" over Seidenberg's pay,
Verizon joined Home Depot, Pfizer, Time Warner and Wal-Mart on
the "pay-for-failure" list compiled in May by the Corporate
Library. The independent group, which monitors companies'
governance policies, singled out those that paid chief
executives more than $15 million while their share prices
declined and trailed competitors in the past five years.
Aflac, the world's largest seller of supplemental health
insurance, in February became the first
company to adopt an advisory vote on executive pay.
Verizon also said it would spell out more specifically the types
of payments that are part of a severance payout in senior
executives' employment agreement. In addition, consultants
who advise the board's human resources committee must not do
business with the company itself, it said.