A Verizon news release said the first advisory vote will be held at the communications company’s 2009 annual meeting and will focus on the 2008 executive compensation information described in the proxy statement for that gathering.
The company said the board decision grew out of shareholder discussions following a May 2007 shareholder proposal seeking such advisory input on compensation – often called “say on pay” – received 50.18% of shareholder votes (See Verizon Shareholders Get Say on Pay ).
Since then the company said it has “monitored ongoing discussions on this issue” and participated in talks with major investors including C. William Jones who sponsored the May 2007 shareholder initiative. According to RiskMetrics’ corporate governance group , Verizon joins the insurance company Aflac as the second publicly owned U.S. company to adopt an annual shareholder pay vote. Ingersoll-Rand is considering adopting a similar “say on pay” proposal.
In its own statement, after the Verizon announcement, the AFL-CIO applauded the move.“This is a strong victory for investors,” declared AFL-CIO Secretary-Treasurer Richard Trumka.