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VZ » Topics » Compensation Objectives and Elements

This excerpt taken from the VZ DEF 14A filed Mar 17, 2008.

Compensation Objectives and Elements

The Company’s compensation program is designed to:

 

  · Align the interests of the executives with those of Verizon’s shareholders by linking a substantial portion of compensation to the Company's stock performance;
  · Motivate executives to achieve both short- and long-term performance goals; and
  · Offer a competitive total compensation program that enables the Company to attract and retain high- performing and experienced executives.

 

In setting total compensation at appropriate competitive levels, the Committee determines the balance between:

 

  · Fixed and variable pay elements;
  · Short- and long-term pay elements; and
  · Cash and equity-based pay elements.

 

The following are the key elements of Verizon's compensation program:

 

Pay Element   Primary Objective   

Relative Weight

(Approximate)

Base salary   Attract and compensate high-performing and experienced executives    10%
Annual cash incentive opportunity   Motivate executives to achieve pre-established short-term performance measures    20%
Long-term incentive opportunity   Align with shareholder interest to grow long-term value and retain executives    70%

 

The named executive officers are eligible to receive medical, disability and savings plan benefits that are generally provided to all management employees. The named executive officers are also eligible for certain executive life insurance, financial planning and corporate transportation benefits, which are provided in order to attract high-performing executives and to enhance the executive’s safety and security.

 

In establishing a pay-for-performance environment, the Committee balances the importance of meeting the Company’s short-term business goals with the need to meet Verizon's goal of creating sustained shareholder value. The Committee has emphasized creating sustained shareholder value in setting the relative weighting of overall compensation opportunities. Accordingly, annual incentives represent approximately twenty percent of the total compensation opportunity while long-term incentives that are linked with stock performance, especially as measured by Verizon’s total shareholder return1 over a three-year period, represent approximately seventy percent of the total compensation opportunity.

 

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