Retirees of Verizon Communications who in 2007 were successful in passing a pioneering “say on pay” proposal have proposed separating the offices of chairman and CEO.
The Association of BellTel Retirees, a nonprofit that says it represents 100,000 former employees of the teleco, wants the board of directors to adopt a policy that would require future board chairmen to be selected only from the independent directors who have not served as an executive officer of the company.
Part of the rationale, according to a press release issued by the retirees yesterday, is that the CEO as chairman creates an “ambiguity about who is working for whom. There is a built-in barrier to replacing a poorly performing CEO.”
Over the years, the retirees’ association have proposed numerous shareowner proxies that forced corporate governance changes at the company; most recently, in 2007, the Verizon board voted in favor of an advisory non-binding say-on-pay resolution that allows shareholders to approve or disapprove of the executive compensation package of senior executive officers.
The Corporate Library singled out Verizon for the second straight year as one of 12 “pay for failure” companies with the worst combination of excessive CEO pay and negative shareholder returns over the most recent five-year period, the retirees’ association pointed out. In the five fiscal years through 2006, CEO/Chairman Ivan Seidenberg received $68.6 million in compensation while total shareholder return was a negative 5 percent. The Wall Street Journal reported that after Verizon’s stock declined 25 percent during 2005, the board decoupled its chairman/CEOs incentive compensation from stock appreciation.
Verizon’s annual meeting is scheduled for May 1 in Lincoln, Neb.