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VZ » Topics » Limitation on Awards

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 Verizon’s 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 Verizon’s ROE exceeds 8% in a plan year, the Committee may establish an award pool equal to 5% of Verizon’s 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. Verizon’s ROE and CNI will be determined after adjusting for certain extraordinary gains and losses, impairments and nonrecurring events.

 

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Table of Contents

The 2009 STIP also restricts the maximum award a participant may receive. The maximum award is determined by the participant’s annual base salary on the last day of the plan year in accordance with the following table:

 

Salary Position   Maximum Percentage
of Award Pool

Highest and 2nd Highest Paid

   3.50%

3rd and 4th Highest Paid

   2.50%

5th and 6th Highest Paid

   1.25%

7th through 25th Highest Paid

   0.85%

Each Other Participant

   less than 0.50%               

 

The Committee may reduce but not increase the maximum award for any participant.

 

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