Verizon Vote on Pay Too Close to Call
Results on Executive Compensation Proposal Due in a Week
By Tomoeh Murakami Tse, Staff Writer
Friday, May 4, 2007; Page D02
NEW YORK, May 3 -- Shareholders of Verizon Communications voted
on a proposal Thursday that would give them an annual vote on
pay packages of top executives, but the result is too close to
A final tabulation will determine the outcome, which will not be
known for about a week, Verizon said after its annual meeting in
"I think shareholders have spoken pretty clearly," said Richard
Ferlauto, director of pension policy for the American Federation
of State, County and Municipal Employees. "We've accomplished
what we set out to do. . . . It's only a matter of time before
the advisory vote gets instituted at companies in the U.S."
If the measure passes, it would give shareholders an up-or-down
advisory vote on executive pay. While the vote would not be
binding, corporate governance experts said, it would be hard for
companies to ignore a significant number of "no" votes.
Verizon chief executive Ivan G. Seidenberg received $21.3
million in compensation last year, according to Securities and
Exchange Commission filings. The amount is not "excessively out
of line with the peer companies," according to Institutional
Shareholder Services, a proxy advisory firm in Rockville.
The "say on pay" proxy has gained momentum after public
criticism of the $210 million exit package for Home Depot chief
executive Robert L. Nardelli. Congress is debating similar
proposals, and a consortium of shareholders and companies is
studying how a shareholder vote on pay might be implemented.
"We're going to continue to closely monitor the discussions,"
Verizon spokesman Peter Thonis said. "We'll make a
determination and do what we think is the right thing to do from
a corporate governance point of view, taking in all of those
factors, including the shareholders' point of view."
Verizon instituted a majority-vote standard for electing board
members last year after a shareholder proposal got significant
Critics of the "say on pay" proposal argue that the marketplace
for executive talent, not shareholders, should determine how
executives are compensated. A yes-or-no vote is not meaningful
feedback, the opponents say, and investors have other ways of
registering their dissatisfaction, such as withholding votes
from directors or selling stock.
Shareholders at more than a dozen companies have voted on the
pay measure during the spring proxy season. The proposal has
failed each time, though it has come close to receiving a
majority vote at several companies. At Merck, the measure
received 49.2 percent support. At Bank of New York, 47.3
percent of votes cast were in favor.
Verizon said the measure received more than 49 percent of votes,
though it is unclear if it reached the majority threshold needed
for the resolution to pass.
Other proposals related to executive pay were defeated at
Verizon: A measure calling for greater shareholder say on
future severance agreements received about 47 percent support,
while another to eliminate stock options got 9 percent.
A campaign lead by the AFL-CIO to unseat six members of the
board's executive compensation committee also failed. Every
director received at least 90 percent of the votes, the company
Verizon shares rose $1.47, or 3.7 percent, to $41.07, a 52-week