Shareholders At Verizon Back Vote on Executive Pay
By Crayton Harrison, Bloomberg News
The Wall Street Journal
Saturday, May 19, 2007
Verion Communications investors approved a proposal that would
give them a nonbinding vote on executive pay, the second time
such a measure has been approved by a U.S. public company.
The proposal won 50.2 percent of votes, the company said
yesterday. Verizon, the second-largest U.S. phone-service
provider, was unable to announce a result at its May 3 annual
meeting because the vote was so close.
Verizon's board is not required to adopt the plan, which would
give shareholders an annual advisory vote on pay for the
company's five highest-paid executives. Verizon said in a
statement yesterday that it would "further consider its policies
in light of the high level of shareholder interest and the
active discussion taking place with respect to the advisory vote
issue in a variety of forums, including in the U.S. Congress."
Verizon, which paid chief executive Ivan G. Seidenberg $21.3
million last year, has been one of the main targets of labor
groups that want to rein in executive compensation. The AFI-CIO
said Seidenberg did not deserve the pay he received from 2002
through 2006 because Verizon's share price fell during that
"This really gives the movement momentum," said Daniel Pedrotty,
director of the office of investment at the AFL-CIO. "This is
investors and the American public saying we are fundamentally
fed up with the CEO pay system in this country."
Blockbuster last week was the first U.S. company to confirm that
shareholders approved such an advisory measure, according to
Institutional Shareholder Services of Rockville, which counsels
investors on their votes.
Shareholders at Merck last month voted 49.2 percent in favor of
such a proposal. At AT&T, Verizon's bigger rival, shareholders
voted 44 percent in favor of a similar proposal last month.
Investors have supported advisory vote proposals by an average
of 42.5 percent in 18 meetings this year, up from 40 percent in
seven meetings last year, ISS said.