Proxy Statement
Executive Compensation

Introduction

The Human Resources Committee oversees the development and implementation of the total compensation program for Verizon’s named executive officers. Throughout the discussion and analysis of compensation, we refer to the Board of Directors as the Board and the Human Resources Committee as the Committee.

During 2008, Verizon’s named executive officers were:

 

Ivan G. Seidenberg

Chairman and Chief Executive Officer

 

Dennis F. Strigl

President and Chief Operating Officer

 

William P. Barr*

Executive Vice President

 

Doreen A. Toben

Executive Vice President and Chief Financial Officer

 

Lowell C. McAdam

Executive Vice President and President and Chief Executive Officer of

 

 

 

Verizon Wireless Joint Venture

* Mr. Barr also served as General Counsel of the Company until November 6, 2008.

Company Performance

Under the leadership of this management team, Verizon reported strong financial and operating results in 2008. Highlights of the Company’s 2008 performance include the following:

  • $2.54 in adjusted earnings per share;
  • $6.4 billion in net income;
  • $97.4 billion in consolidated total revenue;
  • 5.8 million wireless net retail customer additions (non-acquisition related) — industry-leading results; and
  • 2.5 million in FiOS broadband customers and 1.9 million in FiOS video customers at year-end.

Also, during 2008:

  • Verizon increased its stock dividend by 7%; and
  • Verizon’s total return for 2008 ranked 108th among the companies in the Standard & Poor’s 500 Index, 2nd among the Industry Peers and 10th among the Related Dow Peers.

For the three-year period ending on December 31, 2008, Verizon’s stock delivered a total return of positive 35%, which compared to a total return of negative 23% for the Standard and Poor’s 500 Index, negative 21% median total return for the Industry Peers and negative 12% median total return for the Related Dow Peers over the same three-year period. The Industry Peers are described on page 36 and the Related Dow Peers are described on pages 30-31.

Role and Function of the Compensation Committee

The Committee oversees all aspects of the compensation program for Verizon’s named executive officers. In addition, the independent members of the Board approve all decisions relating to the CEO’s compensation after reviewing and considering the Committee’s evaluation and recommendations. The Committee evaluates and approves each element of the other named executive officers’ compensation.

The Committee has the sole authority to retain and to terminate a compensation consultant and to approve the consultant’s fees and all other terms of the engagement. The Committee has retained Pearl Meyer & Partners as its consultant. In the discussion and analysis of compensation, we refer to the compensation consultant as the Consultant. The Consultant advises the Committee on all matters related to the compensation of the named executive officers and assists the Committee in interpreting data it receives from the Company and the Consultant. The Consultant participates in all Committee meetings. The Committee holds an executive session with the Consultant each time it meets. No members of management are present at the executive sessions.

The Committee’s policy does not permit its Consultant to do any work for the Company while that firm is acting as the Committee’s consultant. In compliance with the terms of this policy, Pearl Meyer & Partners has not performed any work for the Company since the date it was retained by the Committee.

The Committee makes an independent determination on all matters related to the compensation of the named executive officers. In making its determination, the Committee may seek the CEO’s views on whether the existing compensation policies and practices continue to support the Company’s business objectives, the applicable performance goals, the Company’s performance and the contributions of the other named executive officers to that performance.

The Committee may also consult with the Executive Vice President of Human Resources on matters related to the design, administration and operation of the Company’s compensation program. The Committee has delegated administrative responsibilities for implementing its decisions on compensation and benefits matters to the Executive Vice President of Human Resources. He reports to the Committee on the actions he has taken under this delegation.

At the request of the Committee, management and the Consultant have engaged in an ongoing dialogue with large institutional investors about the design and operation of Verizon’s executive compensation program. In addition, the Committee regularly monitors best practices and emerging trends in executive compensation. After taking into account these discussions and this information, the Committee determines whether it should make changes to the compensation program. The new policies that went into effect in 2008 are described below.