LOUISVILLE, Ky. (AP) — Verizon's top executives easily passed their "say on pay" test Thursday when their pay packages won overwhelming shareholder approval that brushed aside complaints the compensation was excessive.
Although the vote announced at Verizon's annual meeting in Louisville was merely advisory, a "no" vote on the compensation for CEO Ivan Seidenberg and other executives would have been embarrassing for the New York-based communications company.
Even a leading critic of the compensation said afterward that the 90 percent vote in favor of the package shows that most shareholders are pleased with Verizon Communications, which has posted consistent profits.
"They can always do better," said Bill Jones, president of the Association of BellTel Retirees, which tried to marshal opposition to the pay package. "And this is one of the areas where we can continue to work with them."
During a question-and-answer session with shareholders, Seidenberg said he was pleased that most shareholders decided that the compensation package is "competitively priced."
Seidenberg said Verizon has outperformed the broader market in recent years, posting solid earnings growth in a tumultuous economy. He also expressed a goal of increasing the company's dividend.
"Our company has done very well," he said.
Seidenberg's compensation was valued at $20.2 million in 2008, essentially the same as in the previous two years, according to calculations by The Associated Press, which factor in salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
At face value, he is the best-paid CEO in the U.S. telecommunications industry, though much of his compensation is in stock that has fallen in value since it was granted.
Although Verizon said about 90 percent of the executive compensation is tied to performance, Jones complained those targets are set too low.
AFL-CIO official Rand Wilson said at the annual meeting that Seidenberg's compensation was excessive at a time many people find themselves in a "dire circumstance."
"We think it's obscene that somebody makes 300 times more than the average worker," Wilson said at a gathering of about two dozen union activists before the annual meeting.
Several shareholders praised Seidenberg's stewardship of Verizon during the question-and-answer session.
A rejection of the pay packages by shareholders had been considered a long shot, given that Seidenberg's compensation is hardly unusual, and the company has been posting consistent profits.
But his pay had been targeted by the Association of BellTel Retirees, making this case an example of what happens when a company faces well-organized and motivated shareholders. Already, Verizon has eliminated some of the pay practices its shareholders deemed objectionable.
Jones said he was disappointed by the lopsided vote announced Thursday, but said the proposal will lead to improvements in the company. He said the company "worked hard trying to get a positive vote, and they did."
Verizon is one of 15 companies adopting their own provisions for letting shareholders vote on pay this year. Some financial companies that have received money from the Troubled Assets Relief Program, or TARP, also will be required to conduct similar votes. There has also been movement in Congress to force all companies to hold such votes, something President Barack Obama supported when he was a senator.
Verizon introduced the "say on pay" provision after the BellTel Retirees group got a slim majority in 2007 for its nonbinding proposal for such a provision.
Wilson said the "say on pay" vote will come up again at Verizon's future annual meetings.
Separately, a proposal advocated by Jones to separate the roles of chairman and chief executive was soundly defeated. Seidenberg now holds both titles.
Meanwhile, preliminary tallies show approval for a shareholder proposal that would lower the threshold for calling a special meeting of shareholders. Current bylaws state that holders of 25 percent of shares may call such a meeting; the measure apparently approved lowers that to 10 percent.
Shares in Verizon lost 98 cents, or 3.2 percent, to $29.78 in afternoon trading Thursday.