The Association of BellTel Retirees, which represents more than 100,000 members, wanted to get Verizon's board of directors to include a "Say on Pay" proposal on its proxy and get the proxy passed, which would give all Verizon shareholders a chance to have a say in officer compensation packages.
"We believe [listening to shareholders is] good corporate governance," says C. William Jones, president and executive director of the Association of BellTel Retirees. "We knew some officers had outrageous pay [and] pension plans, [and] golden parachutes when they [were] asking employees and retirees to tighten belts."
The association enlisted longtime AOR Butler Associates, which has worked with it on a number of proxy campaigns.
Challenges with proxy campaigns often simply involve getting shareholders to vote their preference (they tend to vote with management or don't vote)."Say on Pay" proposals have been difficult to pass because of strong opposition by corporate leaders.
"To win something like this is almost unheard of," says Tom Butler, Butler Associates president.
The strategy was to communicate with shareholders directly and via the media about the proposal's importance. Butler notes that in past proxy campaigns, "communicating a story" has served well. This story focused on the executive compensation issue and the David vs. Goliath aspect of the retiree association taking on a huge company.
The team sent information in a newsletter that goes to more than 100,000 retirees and in memos to all pension funds that own Verizon shares.
"We had to find the folks who are responsible for voting those shares," Jones says. "[So we wrote] to them, and follow[ed] up [with a] call. We want[ed] to answer questions."
The team met face-to-face with proxy voting services and other major funds to talk about the issue and answer questions. It also engaged unions, and the Communications Workers of America supported the proposal.
The effort also targeted columnists at major media outlets who cover retiree and corporate governance issues.
"The fact that retirees have no ulterior motives helped sell the story," Butler says.
The proposal passed (50.18% in favor), making Verizon the largest and most widely held public company in which such a measure won shareholder approval.
"Some people would say [50.18%] isn't a shareholder mandate," Jones says. "The cards [were] so stacked against us. Even though it's a squeaker, an awful lot of people voted for it."
Coverage included The New York Times, Wall Street Journal, Baltimore Sun, Pittsburgh Post-Gazette, Crain's New York Business, and a live interview with Jones on Bloomberg TV.
At its May 3 annual meeting, Verizon announced the vote was too close to call. Verizon's press release buried the information, but the association's releases pushed out the news. On Friday, May 18, Verizon announced that the proposal passed. Journalists called the team to give it the news, thus enabling it to propel the story of the win.
"People see that a volunteer organization can sway shareholders to make a change," Jones says. "It emboldens others to try to do the same thing."
The agency will continue to work with the association on proxy campaigns. Efforts to advocate for shareowner rights will resume for the 2008 proxy season.
PR team: Association of BellTel Retirees (Cold Spring Harbor, NY) and Butler Associates (New York)
Campaign: Say on Pay proxy campaign
Duration: February to May 2007
It's likely that a confluence of circumstances contributed to the success of this effort. The association has been committed to shareowner stakes for a long time and has well-developed and refined lines of communication and relationships. There is great synergy and understanding between the agency and the association. And the timing was good, as executive compensation has persisted as a troubling issue.The team did a fantastic job getting coverage of the executive compensation issue and of playing up the retiree-volunteer-organization-vs.-corporate-giant aspect. It's great to see how effective media relations efforts (and solid media relationships) helped advance the story in the wake of the May 3 and May 18 announcements.