Advisory Vote to Approve Executive Compensation
(Item 3 on Proxy Card)
Verizon’s Board of Directors is committed to excellence in governance. As part of that commitment, the Board provided Verizon’s shareholders with the opportunity to cast an annual advisory vote related to executive compensation beginning with our 2009 Annual Meeting of Shareholders.
Beginning in 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 mandates that we provide our shareholders with a non-binding advisory vote, referred to as a “say-on-pay vote,” to approve the compensation of our named executive officers as disclosed in the proxy statement at least once every three years. Our Board has determined to continue providing shareholders with a say-on-pay vote every year.
The Human Resources Committee of the Board has overseen the development of a compensation program that focuses on promoting a performance- and values-based culture which links the interests of management and shareholders. The compensation program is described more fully in the “Executive Compensation” section of this proxy statement, including the “Compensation Discussion and Analysis” and the related tables and narrative.
As described in those sections, we believe that the compensation of our named executive officers:
- Balances short-term and longer-term compensation opportunities to provide incentives to meet short-term business objectives while continuing to produce value for Verizon’s shareholders over the long term;
- Is closely aligned with Verizon’s strong performance over the last one and three years, which resulted in a total shareholder return of 18.2% and 51.1%, respectively over those periods; and
- Is structured to reflect best practices in governance and executive compensation, including:
- No executive employment agreements;
- No cash severance benefits for the CEO;
- No guaranteed pension and supplemental retirement benefits;
- No executive perquisite allowances;
- No tax gross-up payments;
- No single-trigger change in control equity payments;
- A policy that enables the Company to recapture and cancel incentive compensation received by an executive who has engaged in financial misconduct;
- A policy prohibiting the Committee’s independent compensation consultant from doing any other work for the Company; and
- Requirements that Board members and executive officers maintain certain stock ownership levels (described on pages 6 and 42, respectively).
For the reasons discussed above, the Board recommends that shareholders vote in favor of the following resolution:
“Resolved, that the shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2012 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and the related narrative discussion.”
While the resolution is non-binding, the Board values the opinions that shareholders express in their votes and in any additional dialogue. The Board and the Committee will consider the outcome of the vote and those opinions when making future compensation decisions.
The Board of Directors recommends that you vote FOR this proposal.