Those crazy Verizon (VZ)
retirees are at it again. For the tenth year running, a
group calling itself the
Association of
BellTel Retirees is agitating for change in management
practices at the nation’s second-largest phone company, with
two proposals on the Verizon proxy. One measure, a so-called
“say
on pay” proposal, calls for shareholders to get an
advisory vote on executive compensation. The other measure
seeks to limit the number of outside corporate boards
Verizon board members can serve on.
Make no mistake: This isn’t
some random group of, um, retiring, oldsters. The BellTel
Retirees, formed more than a decade ago to protect the
pensions and benefits of ex-NYNEX, GTE and Bell Atlantic
employees (those were the companies that merged to form the
current Verizon), won 59% of the shareholder vote on a
ballot proposal in 2003, and the group says it has affected
change at the company in other ways. Association president
C. William Jones says, for example, the group in 2005
proposed a measure to reign in what’s known as Supplemental
Executive Retirement Plan income - a honeypot for exiting
senior leadership; Verizon preemtively agreed to reduced
payouts under the retirement plan.
The retirees’ activism makes
sense. Many are longtime shareholders in the company going
back to their days of active employment. (The BellTel group
also owns shares in Verizon, giving it the right to propose
measures on the proxy.) Says Jones: “We think a healthy
Verizon is good for all of us.”
Retirees are keenly
interested in making sure the company has the financial
strength to make good on promises to retirees: “We earned
the benefits, we were promised our benefits, and we expect
to get them,” he says. “When we see the benefits beginning
to melt away and our pensions being eaten by inflation, and
we see the officers making multimillion-dollar salaries and
millions of dollars in short-term incentives, well, it just
doesn’t ring true to us.” A few years ago, Verizon, like
many other companies,
restructured its retirement plans. The move didn’t
affect existing retirees, but
other telecom companies have instituted changes that
changed the game on retirees or their spouses.
And so when Verizon
shareholders gather in Pittsburgh next week for the
company’s annual meeting, Jones’ group will be there to
speak on behalf of more changes in executive pay and board
structure. Could be an uphill battle, though. “Say on
pay” proposals
haven’t had much success this year.