How Verizon Might Avoid Ruckus Over CEO's Pay
By Alan Murray
The Wall Street Journal
Wednesday, April 25, 2007
Verizon Chief Executive Ivan Seidenberg has
reason to worry. Some of the same shareholder activists who
targeted former Pfizer chief Henry McKinnell and former Home
Depot chief Robert Nardelli for excessive pay last year now have
the telecom boss at the top of their hit list.
Messrs. McKinnell and Nardelli lost their jobs largely as a
result. Will Mr. Seidenberg go as well?
In today's tumultuous corporate environment, that's not an easy
question to answer. Nor is this one: Who runs the
corporation? A decade ago, most chief executives were firmly
ensconced at the top of a corporate hierarchy, and only the
grossest misdeeds were likely to dislodge them. Today, they
seem susceptible to the judgments of a host of outsiders.
Then there's this thorny question: What's a CEO worth?
Executive pay has emerged as the Achilles' heel of the corporate
elite. The scandals and turmoil of the past half-decade have
taught corporate chieftains that they need the goodwill of the
public to survive and thrive. But persuading Joe Six-Pack that
a chief executive needs to make $20 million a year for ho-hum
performance is no easy task.
Which brings us back to Mr. Seidenberg. His total compensation
last year was $23,669,100. Included was $173,378 for personal
use of the corporate jet and $10,000 to pay a financial planner
to help keep track of all that money.
For investors, that pay was for mixed performance. Anyone who
bought the stock when Mr. Seidenberg became sole CEO in April
2002 has lost money. Anyone who bought it at the start of 2006
earned a 34% return last year -- well above the average for S&P
500 companies, but below others in the telecommunications
industry. By contrast, AT&T provided a 52% return to
shareholders last year -- and Chief Executive Edward Whitacre
took in $36 million in pay.
Business, published Wednesdays, examines the intersection of
business, public policy and economics.
Alan is an assistant managing editor at The Wall Street
Journal. A graduate of the University of North Carolina, he
joined the Journal in 1983. After serving for nearly a decade
as the Journal's Washington bureau chief, he spent three years
as Washington bureau chief for CNBC before returning to the
Journal in New York in 2005. Alan holds a master's degree in
economics from the London School of Economics, and is the author
of "The Wealth of Choices: How the New Economy Puts Power in
Your Hands and Money in Your Pocket" and "Revolt in the Board
Room: The New Rules of Power in Corporate America."
Write to him at