Shareholder Proposals (Item 9 on Proxy Card)
Trust for The International Brotherhood of Electrical Workers’ Pension Benefit Fund, 900 Seventh Street, NW, Washington, DC 20001, owner of 149,425 shares of the Company’s common stock, proposes the following:
RESOLVED: That the stockholders of Verizon Communications, Inc. (“the Company”), assembled in Annual Meeting in person and by proxy, hereby request the Board of Directors to take the necessary steps to provide for cumulative voting in the election of directors, which means each stockholder shall be entitled to as many votes as shall equal the number of shares he or she owns multiplied by the number of directors to be elected, and he or she may cast all of such votes for a single candidate, or any two or more of them as he or she may see fit.”
Cumulative voting means that each shareholder may cast as many votes as equal the number of shares held, multiplied by the number of directors to be elected. Each shareholder may cast all such cumulated votes for a single candidate or split votes between one or more candidates, as each shareholder sees fit.
We believe that cumulative voting increases the possibility of electing at least one director with a viewpoint independent of management. In our opinion, this will help achieve the objective of the board representing all shareholders.
We urge our fellow shareholders to vote yes for cumulative voting and the opportunity to enhance our Board with a more independent perspective.
BOARD OF DIRECTORS’ POSITION
Verizon strongly believes in shareholder democracy. At the present time, each share of Verizon common stock has one vote, and each candidate for Director must receive a majority of the votes cast to be elected to the Board. The entire Board of Directors is elected annually. Verizon’s Board believes that this is the most equitable system for electing Directors.
The Company adopted majority voting at the request of its shareholders. Cumulative voting is incompatible with majority voting. By permitting shareholders to aggregate their votes and cast them for only one or a limited number of directors, cumulative voting could easily result in the election of directors who receive less than a majority of the votes outstanding. Shareholders who cumulate their vote often do not vote for all of the candidates for directors and accordingly, some directors who receive very few “for” votes may be elected to the Board.
In addition, cumulative voting would permit special interest groups to leverage their voting power and elect one or more Directors. The Board is concerned that a Director elected by a “special interest” constituency may base decisions on the interests of the group responsible for his or her election rather than acting in the best interests of Verizon and all of its shareholders.
The Board of Directors firmly believes that the present system best assures that the elected directors will represent and act in the interests of all shareholders, and not just a particular group, and that this proposal is not in the best interests of Verizon and its shareholders.
The Board of Directors recommends that you vote AGAINST this proposal.