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GOVERNANCE

Shareholder proposals fall short at Verizon annual meeting

A number of shareholder proposals were defeated at Verizon Communications Inc.'s annual meeting, with large pension funds showing mixed support.

Proposals to establish a human rights committee; issue a report on greenhouse gas reduction targets; amend the company's executive compensation clawback policy; adopt a stock retention policy; and limit savings plan matching contributions for executives were defeated at the company's May 4 meeting, according to preliminary results released by Verizon. Exact vote tallies were not provided.

Preliminary results for the remaining shareholder proposal, to be able to call for special shareholder meetings, was too close and will be determined by final tabulation, Verizon said.

The stock retention proposal, filed by the International Brotherhood of Electrical Workers Pension Benefit Fund, called for a policy requiring senior executives to retain a significant percentage of shares acquired through equity compensation programs (at least 50% of net after-tax shares) until they reach retirement age or their employment at Verizon ends.

The savings plan contribution proposal, filed by the Association of BellTel Retirees, called for a policy limiting the matching contributions for senior executives in the company's tax-qualified and non-qualified defined contribution savings plan — the Verizon Management Savings Plan and the Verizon Executive Deferral Plan, respectively. Under the association's proposal, the company match for senior executives (currently 100% of employee contributions up to 6% of salary) would be limited to base salary and would not include short-term or long-term incentive compensation.

Additionally, the clawback amendment proposal calls for Verizon to not only claw back incentive compensation from senior executives whose financial misconduct caused a restatement of financial results, but also from executives who may harm the company's reputation and future prospects.

According to their proxy-voting disclosures, both the $318.9 billion California Public Employees' Retirement System, Sacramento, and the C$287.3 billion ($210.6 billion) Canada Pension Plan Investment Board voted in favor of the greenhouse gas report, the special shareholder meetings proposal and amending the clawback policy, and voted against the human rights committee and the savings plan contribution policy.

CalPERS voted for the stock retention policy; CPPIB voted against it.

The $133.2 billion Texas Teacher Retirement System, Austin, the $202.8 billion California State Teachers' Retirement System, West Sacramento, and the $189.4 billion Florida State Board of Administration, Tallahassee, meanwhile, voted in favor of the special meetings proposal, amending the clawback policy and the stock retention policy, and voted against the three remaining proposals.

Verizon's preliminary results also showed shareholders re-elected each of its 12 directors and approved its four management proposals on executive compensation, the frequency of say-on-pay votes, the company's long-term incentive plan, and Ernst & Young's position as auditor.

The directors and other management proposals were supported by CalPERS, CalSTRS, CPPIB and Texas Teachers. Florida State Board of Administration voted against the re-election of one of the directors.