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Verizon's CEO Gets Hefty Pay Raise
Seidenberg Had Salary Of $2.1 Million in 2005, Up Nearly $600,000
By Dionne Searcey
The Wall Street Journal
Tuesday, March 21, 2006

Verizon Communications Inc., which lost ground in the stock market in 2005 compared with its Bell peers, gave Chief Executive Ivan Seidenberg a nearly $600,000 raise last year, boosting his salary to $2.1 million, according to government filings.

The company's board also increased his total 2005 bonus to $4.15 million, compared with $3.38 million in 2004, according to Verizon's proxy filing to the Securities and Exchange Commission.  Last year, Mr. Seidenberg also received $1.71 million in "other compensation," which includes company contributions to savings plans and other pension costs.

Over the course of the year, Mr. Seidenberg used the Verizon corporate jet and a company car for personal purposes, perquisites valued at $120,000.  Verizon also gave him $10,000 as an allowance for financial planning services.

The raise was his first in five years and better aligns Mr. Seidenberg with his peers, Verizon said in the filing, adding, "Under Mr. Seidenberg's leadership, the company delivered strong financial and operational performance as the company continued to grow its customer base."

The company is facing skepticism from some investors who worry it could be spending too much to upgrade its network with fiber optics.  While most of the major phone companies are adding more fiber upgrades, Verizon's plan is by far the most extensive and expensive.  Investors hammered the company's stock last year, driving it down more than 14%Shares have bounced back a bit so far this year.  They fell 19 cents to $34.22 in 4 p.m. New York Stock Exchange composite trading yesterday.

Verizon said Mr. Seidenberg's long-term incentive award for 2005, which is tied to his performance, was valued at $11.34 million, which consisted of 314,480 performance stock units at their February 2005 grant value.

According to the proxy filing, investors are raising questions about the independence of Verizon's board.  Three proposals from shareholders in the proxy filing spell out overlapping board memberships and some members' ties to business dealings with Verizon.

For example, one proposal says that board member Richard Carrion is chief executive of a bank that is Verizon's co-investor in a Puerto Rico telecom operation.  Also, according to the proxy proposal, board member and Verizon Vice Chairman Lawrence Babbio once sat on the compensation committee of the board of Aramark Corp., whose chief executive, Joseph Neubauer, is a Verizon board member.  The shareholders also say Verizon board member Robert Storey recently retired as a partner in a firm providing legal services to Verizon.  Longtime board member Sandra Moose retired about three years ago as an executive of Boston Consulting Group, a firm to which Verizon paid hefty sums for consulting services.

Verizon said much of the allegations from the shareholders are outdated and the company insists that its members are independent by New York Stock Exchange standards and its own, more comparatively strict, standards.

Write to Dionne Searcey at