Human Capital & Careers

Pay Proposals Pass at Penney, Verizon

Shareholders approve two nonbinding resolutions on executive compensation.
Stephen TaubMay 18, 2007

At Friday’s annual meeting, J.C. Penney shareholders voted to require their approval of executive severance packages, reported the Associated Press.

The AP noted that last year, the retailer hired Catherine G. West as chief operating officer, then fired her after six months. West reportedly received stock and option awards valued at $7.6 million when they were granted, and a lump sum of about $2.2 million to make up for 18 months of salary and benefits she forfeited to leave her old job.

“We think it’s a common-sense limit on egregious severance agreements,” said John R. McIntyre, an official with the International Union of Bricklayers and Allied Craftworkers, which sponsored the measure, according to the report.

The vote was nonbinding, and it is unclear how J.C. Penney will act. However, the company has maintained that any limits on pay, including severance, could hurt its ability to recruit the best executives, the AP noted.

Meanwhile, at Verizon Communications, shareholders approved a “say on pay” measure requiring an advisory vote on executive compensation. The resolution, which earlier this month had been too close to call, was approved with 50.18 percent of the vote, according to the independent election inspectors who tabulated and certified the final results.

“In furthering shareholder interests, the board of directors has established senior executive compensation practices that are closely linked to company performance,” Verizon asserted in a statement. “The board is committed to continuous review of the company’s compensation practices and will further consider its policies in light of the high level of shareholder interest and the active discussion taking place with respect to the advisory vote issue in a variety of forums, including in the U.S. Congress.”