Shareholders At Verizon Back Vote on Executive Pay
Saturday, May 19, 2007
Verizon 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 AFL-CIO said Seidenberg did not deserve the pay he received from 2002 through 2006 because Verizon's share price fell during that time.
"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.