U.S. Securities and Exchange Commission
Washington, DC 20549
NOTICE OF EXEMPT SOLICITATION
1. Name of the Registrant:
VERIZON COMMUNICATIONS, INC.
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2. Name of the person relying on exemption:
ASSOCIATION OF BELLTEL RETIREES, C. WILLIAM JONES, JOHN M. BRENNAN, JACK
K. COHEN, EILEEN T. LAWRENCE, PAMELA M. HARRISON, ROBERT A. REHM, DONALD R.
KAUFMANN, CHARLES F. SCHALCH, DAVID J. SIMMONS, JOHN L. STUDEBAKER
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3. Address of the person relying on exemption:
P.O. BOX 33, COLD SPRING HARBOR, NEW YORK 11724
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4. Written materials. Attach written materials required to be submitted
pursuant to Rule 14a-6(g)(1):
Association of BellTel Retirees, Inc.
Post Office Box 33
Cold Spring Harbor, New York 11724 (logo)
_____________________________________________________________________________
_____________________________________________________________________________
Phone: (631) 367-3067 Web Site: www.belltelretirees.org
Fax: (631) 367-1190 E-mail: association@belltelretirees.org
Hotline: 1-800-261-9222
THIS LETTER IS INTENDED FOR VERIZON SHAREOWNERS ONLY
This letter is for our members who own Verizon Stock. If you do not
own Verizon stock, please this on to anyone you know who owns Verizon
stock. The Association of BellTel Retirees Inc. has one proposal
(Item 6) and a high level of interest in Item 3. If you have not
received your Verizon proxy info by April 9th, contact your broker or
call Computershare Trust Company at 1-800-631-2355. PLEASE DO NOT
RETURN PROXY CARDS to the Association of BellTel Retirees.
President and March 2012
Executive Director
C. William Jones Dear Fellow Association Member:
(410) 770-9485
We urge you to pay particular attention to two items
Office Manager on Verizon's proxy card for the upcoming Annual
Christina M. Kruger Meeting, scheduled for May 4 in Huntsville, Alabama,
(631) 367-3067 and to vote contrary to the Board's recommendation
on Items 3 and 6.
BOARD OF ITEM 6: VOTE FOR "VESTING OF PERFORMANCE STOCK
DIRECTORS UNITS" PROPOSAL
Officers
John M. Brennan ITEM 3: VOTE AGAINST THE ADVISORY VOTE ON EXECUTIVE
Chairman of the Board COMPENSATION
(201) 666-8174
We believe that the Company's compensation policies
Jack K. Cohen could be better aligned with long-term shareholder
Executive Vice President interests.
(914) 245-3129
Eileen T. Lawrence * ITEM 6: VOTE FOR A POLICY TO LIMIT LARGE
(718) 229-6078 PERFORMANCE SHARE UNIT (PSU) PAYOUTS TO THE
ACHIEVEMENT OF TOTAL SHAREHOLDER RETURN (TSR)
Pamela M. Harrison EQUAL TO OR ABOVE THE MEDIAN AMONG THE RELATED DOW
Secretary & PEERS INDEX.
V.P. Union relations
(845) 225-6497 While we support the board's policy of paying the
majority of long-term equity compensation in the
Robert A. Rehm form of performance stock units (PSUs), we believe
Chief Financial that large pay-outs for below-median performance
Officer as low as the bottom 26th percentile does not
(516) 827-0801 adequately align pay with performance.
Directors We believe PSUs should not vest or pay out unless
Donald R. Kaufmann Verizon's Total Shareholder Return (TSR) is at least
(610) 687-1363 equal to or above the median relative to the company
peer index selected by the Board.
Charles F. Schalch
(610) 399-3626 Each year the Company's named executive officers
receive long-term equity awards with a potential
David J. Simmonds payout that is between five and 12 times base
(732) 636-4847 salary, depending on the officer and Verizon's TSR
over the three-year performance cycle. These equity
John L. Studebaker performance grants are divided between PSUs (60%)
(610) 296-0281 and Restricted Stock Units (40%).
Board Member The problem is that executives can receive 50% of
Emeritus the PSU "target" award, at the end of a three-year
Louis Miano cycle, even if Verizon's Total Shareholder Return
(TSR) ranks as low as 25th among the 34 companies
that the Board views as the Company's peers.
For example, CEO Lowell McAdam's Target Award in
2011 is $5.25 million (for the 2011-2013 cycle).
McAdam will receive 50% of Target ($2.62 million) if
Verizon's TSR ranks as low as 25th among the 34 Dow
Related Peers - nearly bottom quartile performance.
At the high end, McAdam will receive 200% of Target
($10.5 million) if Verizon ranks among the top four,
i.e., above 90th percentile (2012 Proxy, pp. 38,
44).
ISS Proxy Advisory Services has in previous years
recommended a vote FOR this resolution, stating in
its 2010 analysis that "ISS believes that
significant awards should not be provided for
below-median performance . . .."
We believe Verizon's low performance bar for a 50% payout is particularly
unjustified because senior executives receive 40% of their long-term
"performance pay" in restricted stock (RSUs). RSUs vest after three years
regardless of performance. Although the Board justifies RSUs in part as a
"retention incentive" (2012 Proxy, p. 37), RSUs pay out even if the executive
retires or is terminated without cause, after a change in control, or
voluntarily for good reason.
This proposal leaves the Board with full discretion to determine what
percentage of the PSU Target Award should be earned for performance at or
above the median. The resolution merely requests that the Board change the
minimum pay-for-performance threshold from the 26th to the 50th percentile
relative to whatever company peer index is selected by the Board.
* ITEM 3: VOTE AGAINST APPROVING THE EXECUTIVE COMPENSATION PACKAGE
We urge you to use your "say on pay" vote to send a message that in addition
to the more challenging pay-for-performance threshold recommended above (Item
6), the Board should scale back its expensive set of windfall termination
benefits. For example, the 2012 Proxy discloses that former CEO Ivan
Seidenberg "became entitled to receive upon his retirement" $35.3 million,
which exceeds six times his 2011 base pay plus bonus. (2012 Proxy, p. 56).
When Verizon promoted Mr. McAdam to CEO last year, it more than triples his
pay to $23 million. His salary increased by 53% to $1.4 million, and the
grant date value of his stock awards increased more than four-fold, to $18.8
million. These grants include a special grant of PSUs with a potential $14
million payout. This is on top of his regular annual equity grant, the PSU
portion of which could be worth $10.5 million (2012 Proxy, p. 44).
Even if the CEO's total compensation opportunity is justified, in our view
shareholder interests are not well-served by adding on top what we believe
to
be overly-generous severance payments:
GOLDEN PARACHUTES: If CEO McAdam is terminated without cause, either after or
without a change in control, he is eligible to receive an estimated $34.8
million, more than nine times his 2011 base salary plus bonus. (2012 Proxy
pp. 56, 44).
GOLDEN COFFINS: Upon termination of employment due to death, McAdam would
receive $34.8 million over and above any pension or deferred compensation,
which pay millions more (p. 56).
EXECUTIVE PENSIONS: Verizon's nonqualified retirement saving plan continues to
offer more generous benefits to senior executives than to rank-and-file
managers or employees. For example, former CEO Ivan Seidenberg received
$449,000 in company contributions to the nonqualified plan in 2011, plus
$305,000 in "above-market earnings" on his non-qualified plan assets.
(Compensation Tables, pp. 44-45).
The Board lists a number of "best practices" it has adopted. While we
commend
the Board for gradually reforming its executive compensation structure over
the years, we also note that several of these improvements were adopted only
after receiving strong support as shareholder proposals - proposals the Board
initially opposed. Let management and the Board hear your voice on Verizon's
compensation practices.
PLEASE VOTE AGAINST ITEM 3 AND FOR ITEM 6.
Sincerely yours,
/s/ Bill Jones
C. William Jones
President & Executive Director
The cost of this letter is being borne entirely by the Association of BellTel
Retirees Inc. This is not a solicitation. Please do not send your proxy card
to the Association.