This excerpt taken from the VZ DEF 14A filed Mar 23, 2009.
Single Peer Group. In 2008, the Committee began using a single peer group of large capitalization companies to benchmark both compensation opportunities and long-term stock
performance. The Committee believes that using this single peer group better reflects the overall market environment for a large company like Verizon and will make it easier for shareholders to evaluate the design and effectiveness of Verizons
compensation programs. In prior years, the Committee used more than one peer group for these purposes.
Benchmarking Total Compensation. Beginning in 2008, the Committee benchmarked each executives total compensation opportunity instead of separately evaluating each
element of compensation, using a single peer group to evaluate total compensation. By evaluating the total compensation opportunity, the Committee is able to provide a competitive program, while having the ability to differentiate among individual
pay elements in order to address retention needs and reflect an executives specific experience.
Company-Wide Performance Measures. The Committee believes that shareholders and the investment community generally assess Verizon based on Company-wide performance with
respect to top line revenue growth and bottom line adjusted earnings per share. The Committee also believes that in order to achieve these performance objectives, the executives must successfully manage each of the underlying business segments.
After reviewing best practices, trends in compensation matters and input from large institutional investors, the Committee determined that for 2008, the short-term incentive compensation opportunities for all of the named executive officers would be
based on the same set of Company-wide performance measures, rather than multiple measures of business segment performance.