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Note: C. William Jones, referenced in the press release below as President of the Association of BellTel Retirees, has been serving on the Advisory Panel of the Options Policies Forum that initiated attention to advisory voting issues in 2006 and subsequently developed principles for cooperative adaptation of policies. Based on the foundation of that program, the Association then supported the organization of the current Verizon Forum program to examine the information needed by investors to understand how compensation incentives relate to the achievement of corporate performance objectives. |
Verizon Communications Inc., November 1, 2007 press release
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Verizon Board Adopts Policy on Advisory Shareholder Vote Related to Executive Compensation
Thursday, November 01, 2007 Board Committee Also Strengthens Policies on Executive Severance Agreements and Independence of Executive Compensation Consultant
The Board of Directors of Verizon Communications Inc. (NYSE:VZ) today adopted a policy that provides for an annual advisory vote related to executive compensation beginning in 2009. The Board's Human Resources Committee also adopted policies on two other issues related to executive compensation. The Committee amended Verizon's executive severance policy to define more specifically the types of payments included in the calculation of severance payments. It also adopted a policy requiring that, on an ongoing basis, the Committee's independent compensation consultant will only provide services to the Human Resources Committee and will not perform any other services for the company. "The Board believes that these actions further strengthen Verizon's corporate governance practices. We believe that it is important to engage in an ongoing dialogue with shareholders and others," said Sandra O. Moose, presiding director of the Verizon Board of Directors. Policy Reviewed With Major Investors In May 2007, a shareholder proposal seeking an advisory vote on senior executive compensation, sponsored by Mr. C. William Jones, received 50.18 percent of the vote. Verizon has since monitored the ongoing discussion on this issue and has also engaged in a dialogue with major investors and others, including Mr. Jones. The first advisory vote will be held at Verizon's 2009 annual meeting and will relate to the 2008 executive compensation information described in the proxy statement for that meeting. In the interim, Verizon will continue its dialogue with shareholders and other interested parties. Changes to Severance Policy and Compensation Consultant Limitation Since 2004, Verizon has had in place a policy requiring shareholder approval of any new agreement with a senior executive officer that provides for a total cash severance payment that exceeds 2.99 times the sum of the executive's base salary plus bonus. Today, the Human Resources Committee approved a revised policy that more specifically defines the types of payments that will be included in the calculation of a severance payment. The Committee also adopted a policy that addresses the independence of its compensation consultant. In its 2007 Proxy Statement, Verizon disclosed that the Committee's consultant only provides services to the Human Resources Committee and does not perform any services for the company. The new policy ensures the independence of the Human Resources Committee's compensation consultant by requiring that the consultant retained by the Committee cannot perform any other services for the company. Verizon's Board has adopted similar best-practice governance policies in the past. In November 2006, for example, the Board adopted a majority voting standard for the election of directors. Copies of these three new policies can be found on Verizon's Web site at http://investor.verizon.com/corp_gov/.
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