This excerpt taken from the VZ DEF 14A filed Mar 17, 2008.
The determination of individual base salaries is primarily based on the competitive pay practices at the Market Peers for comparable positions and also reflects the scope of the executives responsibility and experience. In 2007, Mr. Strigl became President and Chief Operating Officer of Verizon and Mr. McAdam became President and Chief Executive Officer of Verizon Wireless. Each of these promotions significantly increased the scope of the executives responsibilities. The Committee determined it was appropriate to increase Mr. Strigls base salary by 11.1% and Mr. McAdams base salary by 10.3% to reflect the increased responsibilities of their new positions consistent with competitive market data at the Market Peers.
Short-Term Incentive Plan
Under the Verizon Short-Term Incentive Plan, which is referred to as the Short-Term Plan, no awards may be paid if Verizons return on equity2 for the plan year does not exceed 8%, even if some or all of the performance measures are achieved. The Committee may reduce but not increase the maximum award under the Short-Term Plan for any participant. The 2007 performance measures are described below. The following summarizes the general operation of the Short-Term Plan.
Each year, the Committee establishes the values of the threshold, target and maximum award opportunities under the Short-Term Plan. The values of these opportunities are primarily based on the scope of the executives responsibility and on the competitive pay practices at the Market Peers for comparable positions. The Committee set the 2007 target award opportunities for the named executive officers at: $3,937,500 for Mr. Seidenberg; $1,875,000 for Mr. Strigl; $945,000 for Mr. Barr; $928,125 for Ms. Toben and $900,000 for Mr. McAdam. The 2007 target award opportunities for Mr. Strigl and Mr. McAdam increased by 11.1% and 10.3% over their prior year levels as a result of their base salary increase described above. The target award opportunities for Mr. Seidenberg, Mr. Barr and Ms. Toben did not increase in 2007.
In the first quarter of 2007, the Committee reviewed and approved the annual financial and operating performance measures for the corporate level and for each business segment (Verizon Wireline and Verizon Wireless), at a level the Committee considered appropriate to motivate the Companys executives to achieve outstanding short-term results and to build value for shareholders.
The awards for Messrs. Seidenberg, Strigl and Barr and Ms. Toben were based on the level of attainment of the performance measures for Verizon corporate. The award for Mr. McAdam, the President and Chief Executive Officer of Verizon Wireless, was based upon the level of attainment of the performance measures for Verizon Wireless.