Shareholders To Decide If Verizon CEO Ivan Seidenberg Deserves $21 Million

Verizon will deign to consider an advisory vote on executive compensation from shareholders starting in 2009. Shareholders demanded the right to vote on executive pay at last year’s annual meeting. Verizon CEO Ivan Seidenberg’s salary increased 11% last year to $21,309,264. Seidenberg’s salary has risen consistently, unlike Verizon’s profits.

“C. William Jones, executive director of the BellTel Retirees, said he was delighted with the board’s decision. “I’m somewhat puzzled as to why they are delaying it till the 2009 meeting, but it certainly is a step in the right direction,” Mr. Jones said.”

“James F. Reda, an independent executive pay consultant in New York City, said most United States and foreign investors he talks to favor say on pay proposals. “I don’t really see any investors who don’t like them,” he said. “But most directors hate say on pay because it undermines them.”

The shareholder vote is only advisory, meaning that it can be easily ignored by compensation-happy company directors.

Verizon to Put Executive Pay to Shareholder Vote [NYT]
PREVIOUSLY: CEO Pay Up 298%, Average Worker’s? 4.3% (1995-2005)

Comments

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  1. RH181 says:

    This is a fairly SIMPLE comment to make: A CEO IS WORTH NO MORE THAN 4X THE AVERAGE SALARY. Year over year we see these guys rake in MILLIONS while the average Joe/Jane (who really do all the work), survive on peanuts.

    I understand that they work hard… but so do the folks on the bottom. The difference is: If the company misses the target, CEO’s, VP’s, etc.. still get their bonus. The average Joe/Jane? Not-So-Much… It’s not just CEO’s folks… it’s VP’s and upper management as well.

    How about turning the tables a little? How about letting the employee’s vote on the executive’s pay packages? I’ll bet bonus’, work environment and benefits get much better.. (oddly enough… right along with quality, productivity, and profits).

  2. Landru says:

    Suppose they said “We are only paying ten million.” Would he quit? Would they be unable to hire a replacement?

  3. howie_in_az says:

    I’d do it for half of what he’s making now and I bet Verizon would lose their Evil Empire notoriety.

  4. Lars says:

    That’s an obscene salary. No individual is worth that much to a firm. It’s a myth that one person could so greatly affect a concern as big as Verizon.

  5. XTC46 says:

    CEO raises in for-profit companies should be tied directly to profits. You get a base pay when you start, if profits drop, your pay drops, when they go up, your pay goes up. It might not be a 1 to 1 correlation but I think it would be possible for Verizon to do that. if profits drop 10 percent so does the CEO’s pay.

    @Lars: I dont agree with you on this. A CEO can have a dramatic effect on a company (Steve Jobs, Bill Gates, etc)not only in their vision of where they take the company, and the standards that need to be upheld, but as a public figure for the company. If Steve Jobs walked from apple today, apples stock would take a MASSIVE hit. Same with Bill Gates (when he announced his retirement it definitely stirred the pot)

  6. JohnMc says:

    XTC46, as grand as scheme as it sounds tying CEO pay to profits alone is a lousy indicator. A less than scrupulous CEO can defer R&D, maintenance and middle mgt pay quite some time before the effects are felt, but consequently have rising profits and their pay. A better indicator is something called EVA. Also don’t discount the value of the COO. He/she is more important than a CEO.

    Consider that Sprint, number 3 telecom provider has been without a CEO for almost a year. Popping right along. Nor do I consider Steve Jobs an example of an excellent CEO. Shall I list his failures — Lisa computer, NextStep Corp., dwindling market share for holding on to the Macintosh classic for too long. The man does not walk on water.

  7. humphrmi says:

    @JohnMc: Some would argue that NeXT was a huge success. Apple buying NeXT brought Steve Jobs back into the company. The OS is still in use today on Macs and the iPhone.

    Also note that Steve Jobs makes $1 per year.

  8. n/a says:

    This verizon twit deserves no pay raise, with all the crap Verizon and Comcast and all these other conglomerates have been pulling their crap lately, I really wish these head honchoes would get humbled and remind them of where they began and to remmeber to not forget the customer.

  9. ogman says:

    That customer hating jackass is why I am now with T-Mobile and got rid of my landline. When they asked me why I was canceling my service, I told them that they needed to muzzle Seidenberg. The woman on the phone had to cover her mouth while she laughed.

  10. azntg says:

    Where’s the “Verizon face”? Now’s also a good time too.

  11. chili_dog says:

    @JohnMc: Sprint is a total mess. No direction, no insight and certainly no ability to increase market share. Heck, Sprint has subscriber accounts spread across 3 platforms which not everyone can even access.

  12. scoosdad says:

    @xtc46: “If Steve Jobs walked from apple today, apples stock would take a MASSIVE hit. Same with Bill Gates..”

    Companies who allow their CEOs to wield so much power and influence that it affects their stock if something happens to them, are foolish. Anyone could be hit by a truck tomorrow. Nobody lives forever.

  13. BigNutty says:

    How can you blame the CEO? If he can pull it off, good for him. Only jobs that taxpayers have to pay for or companies that control our required basics such as electricity should be monitored.

    If you say that prices will rise because of his salary, don’t buy the company’s products.

  14. cde says:

    @scoosdad: Without that influential ceo, the company would not be in a good position, thus needing someone who can change this like the influential ceo could. Without Steve Jobs or Bill Gates, would Apple or Microsoft be in a position where who their CEO is matter?

    @BigNutty: Communications is a basics in this day and age.

  15. overbysara says:

    @howie_in_az:
    I’ll do it for a third of the pay and pay you another third to be the co-ceo.

  16. scoosdad says:

    @cde: How many people in the world can even tell you the name of the CEO of Verizon? In most big companies, the CEO just doesn’t matter to anyone except the people who work under him.

    For that matter, how many people who work for Verizon can name their CEO? Not many, I’d be willing to wager.

  17. tadowguy says:

    An Indian CEO would work for $50k and can be an empty suit just as well as this guy.

  18. n/a says:

    @ogman:

    better t-mobile doesnt jack you with a $1,000.00+ bill like they did to motoko with a number associated to her acct from some fraud or whatever the whole deal was.

  19. JustAGuy2 says:

    How is this a Consumerist issue? This is only an issue between Seidenberg and the people he works for (the Verizon shareholders). If shareholders want to pay him $20MM, or $50MM, or $1BN a year, that’s their business, it has absolutely zero to do with the customer.

  20. Bay State Darren says:

    They’re just trying to get lots of people to buy their stock, knowing most of their customers wanna vote no.

  21. Baz says:

    I’m sure glad to now know where my $150/mo is going!

  22. aem0307 says:

    In response to Scoosdad, ALL employees of Verizon know who our CEO is, we all hate that he makes so much money and wants to take benefits and raises from his “workers”. Especially now, with the union contract up on 8/2/08, we are all ready to go on strike to keep what we have. The company wants to take away our medical benefits and other benefits we have worked hard for over the years. Verizon has already screwed the management team by freezing their pensions, and making them pay for medical benefits. We want to prevent that. Verizon makes so much money and does not want to let the profits trickle down to the real workers. (don’t get me started!! :-) )