This excerpt taken from the VZ DEF 14A filed Mar 23, 2009.
Limitation on Awards
Under the 2009 STIP, no awards will be paid for any plan year in which Verizons return on equity attributable to Verizon, or ROE, is 8% or less. The 2009 STIP also limits the aggregate amount that may be awarded in any plan year. If Verizons ROE exceeds 8% in a plan year, the Committee may establish an award pool equal to 5% of Verizons consolidated net income attributable to Verizon, or CNI. In determining the amount of the award pool, the Committee will not consider CNI in excess of $5 billion thereby limiting the maximum award pool to $250 million in any plan year. However, the Committee may reduce the award pool and may authorize awards that total less than the amount of the award pool but cannot authorize awards that exceed 100% of the award pool. Verizons ROE and CNI will be determined after adjusting for certain extraordinary gains and losses, impairments and nonrecurring events.
The 2009 STIP also restricts the maximum award a participant may receive. The maximum award is determined by the participants annual base salary on the last day of the plan year in accordance with the following table:
The Committee may reduce but not increase the maximum award for any participant.