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VZ » Topics » Verizon Wireline

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

Verizon Wireline

 

The Committee approved the following 2007 Verizon Wireline performance measures:

 

  · $50.5 billion for wireline revenue, weighted at 20% of the total award.
  · $4.7 billion for wireline operating income, weighted at 30% of the total award.
  · $1.6 billion for wireline net income, weighted at 10% of the total award.
  · Operating performance measures at Verizon Wireline, each of which was weighted at 5% of the total award:

 

  Ø FiOS net customer additions of 1.8 million.
  Ø Legacy Verizon non-enterprise retail access line losses of 1.7 million.
  Ø Strategic services revenue (measuring revenue at Verizon Wireline’s most strategic growth areas) of $5.1 billion.
  Ø A reduction in the ratio of payments to independent carriers as a percentage of revenue.

 

  · A composite customer service/network performance measure of 100, based upon provisioning, repair and maintenance, receivables management, network performance and customer engagement, weighted at 15% of the total award.
  · A diversity measure weighted at 5% of the total award providing that: 50% of new hires and promotions at the manager level and above consist of minority and female candidates; and that $1.8 billion in supplier spending be directed to minority and female owned or operated firms.

 

Determining the 2007 Award Payout

 

Verizon Corporate Results and Awards

 

  · Verizon reported strong 2007 results including adjusted earnings per share of $2.36, which exceeded the performance measure of $2.28.
  · 110% of the diversity measure for new hires and promotions and 186% of the diversity supplier spending measure was achieved.
  · 100% of the weighted business segment composite performance measure was achieved, based upon the results described below for Verizon Wireless and Verizon Wireline and income weighting of approximately 72% for Verizon Wireless and 28% for Verizon Wireline.

 

4 EBITDA is defined as earnings before interest, taxes, depreciation and amortization. It adds depreciation and amortization to operating income.

 

24

Table of Contents

The Committee, and for Mr. Seidenberg, the Board, approved the following Short-Term Plan award payments based on the level of achievement of the corporate performance measures: $4,200,000 for Mr. Seidenberg; $2,000,000 for Mr. Strigl; $1,008,000 for Mr. Barr and $990,000 for Ms. Toben. This resulted in their 2007 annual incentive awards being paid at 6.7% above the target level. Generally, the annual incentive awards for Verizon’s management employees at the corporate level were based upon the same level of attainment of the performance measures used to determine the payments for Mr. Seidenberg and the other corporate level named executive officers.

 

Verizon Wireless Results and Awards

 

Verizon Wireless continued its industry-leading performance in key financial and operating areas. It reported significant growth in service revenue, EBITDA and net income and industry-leading net retail customer additions and overall customer loyalty.

 

  · Verizon Wireless reported $38.0 billion in service revenue, $16.9 billion in EBITDA and $3.8 billion in net income (reflecting Verizon’s 55% ownership of Verizon Wireless).
  · Verizon Wireless reported 6.9 million in net retail customer additions.
  · Verizon Wireless achieved 98% of its composite customer service/network performance measure.
  · Verizon Wireless achieved 110% of its diversity measure for new hires and promotions and 112% of its diversity supplier spending measure.

 

The Committee approved a Short-Term Plan award payment of $1,032,000 to Mr. McAdam based on the level of achievement of the Verizon Wireless performance measures. This resulted in his 2007 annual incentive award being paid at 14.7% above the target level. The annual incentive awards for all of Verizon Wireless’ employees were based upon the same level of attainment of the performance measures used to determine the payment for Mr. McAdam.

 

Verizon Wireline Results and Awards

 

Verizon Wireline continued to perform well in an extremely competitive market environment and continued to increase revenues in the strategic growth areas of its business.

 

  · Verizon Wireline reported $50.3 billion in revenue, $4.7 billion in operating income and $1.5 billion in net income.
 

·

Verizon Wireline reported 1.6 million in net FiOS customer additions, 2.3 million in legacy Verizon non-enterprise retail access line losses, $5.2 billion in strategic services revenue and achieved 95% of the measure with respect to reduction in the ratio of payments to independent carriers as a percentage of revenue.5

  · Verizon Wireline achieved 101% of its composite customer service/network performance measure.
  · Verizon Wireline achieved 104% of its diversity measure for new hires and promotions and 117% of its diversity supplier spending measure.

 

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