AFL-CIO takes aim at Verizon chief
The AFL-CIO, a major shareholder in public companies, is targeting Verizon Communications Inc. this year for a shake-up of its board of directors as it accuses the company’s chief executive of collecting exorbitant pay while turning in a poor performance.
The labor federation scored successes last year at Home Depot Inc. and Pfizer Inc., whose chief executives departed in a storm of investor anger over executive pay. AFL-CIO officials said Thursday that they had chosen Verizon CEO Ivan Seidenberg as their “poster boy” for 2007.
“I defy anybody to say this guy has earned the money,” said Richard Trumka, the AFL-CIO’s secretary-treasurer.
Seidenberg received $109 million in compensation over the last five years -- at the same time, Trumka said, that Verizon shareholders got a negative 0.5% return on their investment.
At New York-based Verizon’s annual meeting May 3, the federation will ask shareholders to vote off the board those directors who approved Seidenberg’s compensation and will push for investors to have a formal say in executive pay and “golden-parachute” severance packages at the company, Trumka said.
“Verizon is among the most transparent companies regarding senior executive compensation, and in fact our CEO works without a severance agreement,” company spokesman Peter Thonis said in a statement.
“Furthermore, approximately 89% of our CEO’s compensation is performance based and therefore at risk. That’s why estimates by others of compensation received typically turn out to be very wrong.”
Seidenberg received compensation valued at $20.2 million last year, according to a recent company filing, including $2.1 million in salary, $13.1 million worth of stock awards and perks worth $734,400.
Verizon’s stock rebounded strongly last year after a dismal performance in 2005. Shares of the second-largest U.S. telecommunications company rose 24% during 2006 or nearly 35% including the spinoff to shareholders of stock in Verizon’s phone book and directory listings business.
“Given our return to shareholders over the last year and our sound compensation practices, the unions’ arguments are unfounded,” Thonis said.
Seidenberg is leading the company through a particularly ambitious -- and some say risky -- project. Verizon has committed to spend nearly $23 billion to upgrade half of its copper telephone network with fiber-optic cables that can deliver cable TV and speedier Internet access.
