Since our Association first came together in 1996 to protect our collective economic rights as Verizon retiree shareholders, the organization has certainly had an oversized impact, leading the way in shareowner advocacy. This includes issues including executive compensation, golden parachutes and clawback policies.
Every year, your Association puts forward new or renewed proxy measures aimed at keeping our former employers honest, balancing the needs and rights of shareholders, with those of the executives who determine the financial health of these corporations.
The annual proxy campaigns have been an overwhelming success, with three proxy measures that outpolled the company in the annual shareholder vote, and nine others that have led to off-ballot negotiations and proactive changes in corporate governance by the Verizon board.
As a result, we also look forward to expanding our proxy activism to include not only Verizon, but also the AT&T annual shareowners meeting in 2023.
Government Following BellTel’s Lead:
Even those proxy petitions that have not been outright vote winners have moved the needle and changed the conversation on these important corporate policy issues.
Just last year, your Association put forth a proxy initiative on Senior Executive Clawback Policy, which received 38% of the vote.
In essence, our proposal stipulated that if a senior executive engaged in activities that turned out to be harmful to the company, even if they appeared to be positive at first, the executive should be compelled to return any awards or benefits they received as a result of the error.
Despite not receiving a majority of the shareholder vote, our proposal was clearly ahead of its time as this very cause has since been taken up by the United States Securities and Exchange Commission (SEC).
The Wall Street Journal reported that, in a 3-2 vote, the SEC approved a rule to expand what would trigger a public company’s clawback policy. Prior to this, companies were only required to trigger a clawback if they identified major accounting errors that required a restatement of financial results.
The new rule states that companies “will also have to recover executive bonuses if they find smaller errors that significantly affect only the current year’s results,” according to the Wall Street Journal article.
SEC Chairman Gary Gensler said that “the rule will strengthen investor confidence in corporate reporting, as well as the accountability of managers.”
Passed on October 26, 2022, the rule also requires companies to set up their own procedures for recovering incentive pay awarded on account of these errors, based on what the executive would have earned if done correctly.
Companies now must use reasonable estimates when the compensation is based on stock performance, and all recovered funds would be returned to the company.
The rule, which is set to take place approximately one year from now, will apply to both current and former executives, with a look back period of up to three years.
Throughout its 26 year history, the Association of BellTel Retirees has always fought to be a leader and a champion for good and for our retirees best interests. However, to be a trendsetter and one that happens to be guiding and perhaps mentoring the SEC policy makers, is something all of our members should take great pride in.
Please continue to support your Association and keep it strong!
This article was first published in the 2022 Winter Newsletter.
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