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. SIMMONDS AND 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
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: 1-800-262-9222
March 2017
President and THIS LETTER IS INTENDED FOR VERIZON SHAREHOLDERS ONLY.
Executive Director
John M. Brennan This letter is for our members who own Verizon stock.
(201) 666-8174 If you do not own Verizon stock, please pass this on
to anyone you know who owns Verizon stock. Association
Senior Staff Manager Chairman Jack Cohen introduced the "clawback" proposal
Susan M. Donegan (Item 9) and the Association introduced the retirement
(631) 367-3067 saving proposal (Item 11), both described below. If
you have not received your Verizon proxy card by
BOARD OF April 8th, contact your broker or call Computershare
DIRECTORS Trust Company at 1-800-631-2355. PLEASE DO NOT RETURN
PROXY CARDS to the Association of BellTel Retirees.
Officers
Jack K. Cohen
Chairman of the Board DEAR FELLOW ASSOCIATION MEMBER:
(914) 245-3129
We urge you to vote FOR ITEM 9 AND FOR ITEM 11 on
Eileen T. Lawrence Verizon's proxy card for the upcoming annual meeting,
Executive Vice President scheduled to be held May 4th in Plano, Texas.
(718) 229-6078
ITEM 9: FOR THE "EXECUTIVE COMPENSATION CLAWBACK POLICY
Robert G. Gaglione
Treasurer As the New York Times reported in Sunday's Business
(516) 676-0937 section, "a group of 205,000 former telecom employees
known as the Association of BellTel Retirees ... wants
the company to expand its clawback policy." (Want
Pamela M. Harrison Change? Shareholders Have a tool for That, by Gretchen
Secretary & Morgenson, March 24, 2017).
V.P. Union Relations
(845) 225-6497 Several years ago, Verizon's Board adopted a policy
that authorized the company to "cancel certain
Directors incentive payments received by an executive who has
John W. Hyland engaged in financial misconduct" (2016 Proxy, page 46).
(845) 278-9115 After Association Chairman Jack Cohen submitted this
shareholder proposal to strengthen the clawback
Donald R. Kaufmann policy, Verizon posted a new policy that still limits
(610) 687-1363 recoveries to executives who engage in "willful
misconduct" that causes significant financial or
John Kolimaga reputational harm to the company.
(215) 694-7708
However, as the Times reported, Verizon's clawback
David J. Simmonds Policy remains far too narrow. The term "willful
(732) 636-4847 misconduct" is ill-defined and may limit recoveries
to egregious cases only. "Verizon's policy should also
Thomas M. Steed cover wrongdoing that arose because of negligence or a
(845) 457-9848 supervisory failure," the article stated.
Board Member Emeritus Recent high-profile regulatory fines paid by Verizon
Louis Miano underscore the need for a stronger policy. In 2015
Verizon agreed to pay $90 million to settle a Federal
Board Member Emeritus Communications Commission investigation alleging that
Robert A. Rehm Verizon placed unauthorized third-party charges on its
customers' mobile phone bills - an unlawful practice
Board Member Emeritus called "cramming."
C. William Jones
Did Verizon's Board scrutinize the actions of
executives responsible for control failures to see if
any incentive compensation should be recouped? If not,
why not? Association attorney Con Hitchcock is quoted
in the same Times article, stating: "If executives'
behavior costs the company money or damages its
reputation, shouldn't there be consequences?"
Harry Truman's motto was "the buck stops here." Too
often the 21st century CEO version of accountability is
"the bucks stay here." Senior executives should be on
Notice that their own supposedly "performance-based"
compensation is at risk. Accountability influences
behavior. And a stronger clawback policy will deter
Verizon executives from taking undue risks to boost
short-term profitability.
ITEM 11: VOTE FOR A "LIMIT ON MATCHING CONTRIBUTIONS" TO SENIOR EXECUTIVE SAVING
PLANS
Verizon continues to offer senior executive officers far more generous
retirement saving benefits than rank-and-file managers and other employees
receive under the tax-qualified saving plans. We urge you to support this
shareholder proposal, submitted by the Association of BellTel Retirees, which
will cap the company matching contribution on savings by senior executives.
For example, in 2016 CEO Lowell McAdam received a $21,200 Company contribution
to his Management Savings Plan account - a match equal to 6% of his tax-eligible
base salary. In addition, McAdam received $424,000 in Company matching
contributions to his Executive Deferral Plan account, plus $100,855 in
"above-market earnings" on his nonqualified plan assets. (See 2017 Proxy,
Compensation Tables, page 49-50,notes 3 and 4).
This $545,000 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
Savings Plan. Because the IRS limits total annual contributions to
tax-qualified plans, the maximum Company contribution to the Savings Plan was
$21,200 in 2016 (the amount received by McAdam and most other senior executive
officers). (2017 Proxy, table, page 50).
For McAdam, this is all on top of nearly $2.8 million in accumulated qualified
and nonqualified traditional (defined benefit) pension benefits. (2017 Proxy,
page 55).
Giving senior executives retirement saving contributions as much as 20 TIMES
LARGER than the maximum contribution available to rank-and-file employees who
contribute the maximum to the Savings Plan is particularly unfair at a company
that first froze its traditional pension plans and then transferred 41,000
retirees to an insurance company, stripping them of their federal pension
insurance in the process. Such gross disparities between retirement benefits
offered to senior executives and other employees create potential morale
problems and reputational risk, which can adversely affect shareholder value.
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
senior executive retirement saving benefits 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 9 AND FOR ITEM 11.
Sincerely yours,
/s/ John M. Brennan
John M. Brennan
President & Executive Director
THE COST OF THIS LETTER IS BEING BORNE ENTIRELY THE ASSOCIATION OF BELLTEL
RETIREES INC. THIS IS NOT A SOLICITATION. PLEASE DO NOT SEND YOUR PROXY CARD TO
THE ASSOCIATION.