This excerpt taken from the VZ DEF 14A filed Mar 23, 2009.
Terms of 2006 PSU Awards
With respect to the PSUs awarded in 2006, the Committee determined the number of PSUs a participant earned based on Verizons TSR for the 2006-2008 three-year performance cycle relative to the TSRs of:
For PSUs awarded prior to the 20082010 award cycle, including the 2006 PSU awards, the Committee compared the Companys stock performance to the Industry Peers to determine a portion of the award. The Industry Peers were selected because they are companies that compete directly with Verizon for customers and are generally affected by similar market and regulatory conditions. The Committee based the remainder of the award on the Companys TSR performance compared to the companies in the S&P 500 Index in order to approximate the value of the Companys performance compared to a common investment alternative for shareholders.
The following chart shows the Industry Peers as of December 31, 2008. As previously indicated, the Industry Peers include companies in Verizons industry sector (regardless of size) that provide wireline, wireless and broadband communications services.