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, JOHN M. BRENNAN, JACK
K. COHEN, EILEEN T. LAWRENCE, ROBERT G. GAGLIONE,
PAMELA M. HARRISON, JOHN W. HYLAND, DONALD R. KAUFMANN,
JOHN KOLIMAGA, DAVID J. SIMMONS, THOMAS M. STEED
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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 (Logo)
Cold Spring Harbor, New York 11724 UNITED, TO PROTECT OUR FUTURE
_______________________________________________________________________
Phone: (631) 367-3067 Web site: www.belltelretirees.org
Fax: (631) 367-1190 E-mail: association@belltelretirees.org
Hotline: 1-800-262-9222
President and April 2018
Executive Director
John M. Brennan DEAR FELLOW VERIZON SHAREHOLDER: WE URGE YOU TO
(201) 666-8174 VOTE FOR ITEM 8 and FOR ITEM 9 on Verizon's proxy
card for the upcoming Annual Meeting, scheduled to
Senior Staff be held May 3rd near Seattle, Washington.
Manager:
Susan M. Donegan ITEM 8: VOTE FOR THE "EXECUTIVE COMPENSATION
(631) 367-3067 CLAWBACK POLICY"
BOARD OF DIRECTORS Several years ago, Verizon' Board adopted a policy
Officers: that authorized the company to "cancel certain
Jack K. Cohen incentive payments received by an executive who has
Chairman of the engaged in financial misconduct" (2016 Proxy, page
Board 46). After Jack Cohen, chairman of our association,
(914)245-3129) submitted a shareholder proposal to strengthen that
clawback policy, Verizon posted a revised policy
Eileen T. Lawrence that limits recoveries to executives who engage in
(718) 229-6078 "willful misconduct . . . that results in
Executive Vice significant reputational or financial harm to
President Verizon.
Robert. Gaglione Mr. Cohen reintroduced his proposal because a
Treasurer policy limited to "willful misconduct," and which
(516) 676-0937 misconduct," and which does not require disclosure
to shareholders, remains far too narrow. And
Pamela M. Harrison although incentive compensation may be clawed back
Secretary & V.P. due to "gross negligence," this is limited to
Union Relations financial harm so large it results in a material
(845) 225-6497 restatement of financial results.
Directors Recent high-profile regulatory fines paid by
John W. Hyland Verizon underscore the need for a stronger policy.
(845) 278-9115 In 2015 Verizon agreed to pay $90 million to settle
a Federal Communications Commission investigation
Donald R. Kaufmann alleging that Verizon placed unauthorized third-
(7170 398-2423 party charges on its customer's mobile phone bills
- an unlawful practice known as "cramming."
John Kolimaga We are concerned that a "willful misconduct"
(516) 676-0937 standard is too vague and will not address
situations like this where a senior executive fails
David J. Simmons to exercise oversight responsibilities that result
(732) 636-4847 in significant damage to the Company.
Thomas M. Steed Wells Fargo is a prime example: The bank agreed to
(845) 457-9848 pay $185 million to resolve claims of fraudulent
sales practices that practices that years until
Board Member reports and Congressional hearings led the bank's
Emeritus board to clawback $136 million in compensation from
Louis Miano two top executives.
Board Member A New York Times Sunday business section column
Emeritus last year agreed with us that "Verizon's policy
Robert A. Rehm should also cover wrongdoing that arose because of
negligence or a supervisory failure." (Want
Board Member Change? Shareholders Have a Tool for That, by
Emeritus Gretchen Morgenson, March 24, 2017).
C. William Jones
<PAGE>
Harry Truman's motto was "the buck stops here." Senior executives
should be on notice that their own supposedly "performance-based"
compensation is at risk. Accountability influences behavior. A strong
clawback policy will deter executives from taking undue risks to boost
short term profitability.
ITEM 9: VOTE FOR LIMITING “NONQUALIFIED SAVINGS PLAN EARNINGS” FOR
SENIOR EXECUTIVES
We urge you to support this proposal, submitted by the Association of
BellTel Retirees, which urges prohibiting the practice of paying above-
market earnings on the non-tax-qualified retirement saving or deferred
income account balances of senior executive officers.
Institutional Shareholder Services (ISS), the leading proxy advisory
firm for institutional investors, flagged this practice in its 2017
proxy analysis. ISS stated that Verizon “provided guaranteed earnings
rates on deferred compensation that are above what can be earned in the
general marketplace.”
The ISS report also noted that the payment of “above-market or
preferential earnings to executives . . . increases the ultimate
expense of the plan to shareholders and is not considered a best
practice.”
The Verizon Executive Deferral Plan allows senior executives to
contribute or defer compensation significantly above the applicable IRS
limits on 401(k) accounts, including without limit the long-term
incentive compensation that represents the bulk of their annual income.
For example, in 2017 CEO Lowell McAdam received $73,949 in “above-
market earnings” on his nonqualified plan assets. (2018 Proxy, Summary
Compensation Table, page 46, column h).
For CEO McAdam, these above-market earnings came on top of $325,150 in
Company matching contributions to his Executive Deferral Plan account
and $18,850 to his Management Savings Plan account (2018 Proxy, page
47).
The $418,000 in total Company matching contributions and “above-market
earnings” received by McAdam for just one year dwarfed the maximum
Company contribution available to managers or other employees
participating only in the tax-qualified Savings Plan. Verizon provides
a matching contribution equal to 100% of the first 6% of base salary
and short-term incentive compensation that a participant contributes
(Proxy, page 42).
Above-market earnings on non-qualified accounts are not performance-
based and thus do nothing to align management incentives with long-term
shareholder interests.
We also urge you to use your “say on pay” to VOTE AGAINST ITEM 3:
“ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION.” A No Vote will send
a message that limiting above-market earnings on senior executive
retirement accounts and requiring shareholder approval of windfall
severance benefits (a proposal by Jack Cohen in prior years that fell
short of a majority vote) are reforms needed to better align executive
pay with shareholder interests.
Please VOTE YOUR PROXY CARD FOR ITEM 8 AND FOR ITEM 9.
Sincerely yours,
/s/ John M. Brennan
John M. Brennan
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.