Summary
This 8-K filing from Verizon Communications Inc. (VZ) on March 14, 2017, primarily reports on the approval of a special equity award to John G. Stratton, Executive Vice President and President of Operations. This award is designed as a retention tool and is entirely performance-based, with its payout directly tied to Verizon's return on equity (ROE) over a three-year period. The goal is to align executive compensation with shareholder value creation, a key metric for investors. The performance criteria are set with specific thresholds for ROE, ranging from a minimum of 30% for any vesting to a maximum of 150% of the award for achieving 60% average annual ROE. This structure emphasizes the company's commitment to improving profitability and generating returns for its shareholders. Investors should note the performance period runs from January 1, 2017, to December 31, 2019, with vesting on March 13, 2020, and a subsequent one-year holding period for the settled shares.
Key Highlights
- 1Verizon granted a special, 100% performance-based equity award to EVP John G. Stratton on March 14, 2017.
- 2The award's value is approximately $6 million as of the grant date.
- 3The award consists of Performance Stock Units (PSUs) vesting after a three-year period ending March 13, 2020.
- 4Vesting is contingent upon Mr. Stratton remaining employed throughout the award period.
- 5Payout is directly tied to Verizon's average annual Return on Equity (ROE) from January 1, 2017, to December 31, 2019.
- 6Minimum ROE threshold for any vesting is 30%; 100% vesting at 45% ROE; up to 150% vesting at 60% ROE.
- 7Vested PSUs will be settled in Verizon stock and subject to a one-year post-vesting holding period, excluding exceptions for death or disability.