Turning the tables on Verizon…
For anyone who’s ever called Verizon (VZ) to complain about something like slow download speeds or oddly high bills (speaking from personal experience, naturally) and not exactly been greeted with a sympathetic ear, have we got an SEC filing for you! Last week, Verizon, filed this amended proxy which complained about this story in Crain’s New York Business. Here’s a snippet from the filing, which quotes a letter that Verizon’s chief PR person, Peter Thonis, sent to Crain’s:
Your article on executive compensation (March 9) takes a gratuitous swipe at Verizon’s policies. While rightly calling Verizon a company that has “better aligned its pay policies with the times,” the article goes on to quote two pension funds that argue shareholders should not pay for unearned compensation – citing, inaccurately, our CEO’s death benefit.
The whole thing is just weird with a capital W. While there’s certainly no problem with Verizon responding to an article it views as unflattering with a letter to Crain’s, it seems more than a bit extreme to file an amended proxy statement with a copy of that letter. Doing so practically begs people who otherwise wouldn’t read Crain’s — say shareholders outside the state — to wonder what has Verizon officials so bent out of shape. Keep in mind that the reference to Verizon was halfway through the article. In the interest of full disclosure, I used to work for Crain’s New York.
If companies start using their SEC filings to turn into press critics, we’re all in for a lot of trouble.
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Posted in Tags: PR Spin, proxy |
 4 Comments » |
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March 23rd, 2009 at 10:30 am
You may want to consult your securities lawyer friends on this one. VZ may have felt required to file this letter since it arguably constitutes an attempt to influence the vote at the annual meeting after the proxy statement for that meeting had already been filed. That’s my best guess.
March 23rd, 2009 at 10:33 am
Thanks, Doug. I hadn’t thought of that. Still, it does seem odd to me that Verizon would think enough shareholders would make it to the 19th paragraph of the story to have an impact. Any lawyers want to weigh in here since I seem to be thinking of this in terms of press criticism?
March 23rd, 2009 at 6:16 pm
“Ask the lawyers” is on the right track.
This year, among other things, VZ’s stockholders are being asked to vote on whether the company should put executive death benefits to a shareholder vote (see item 10 of VZ’s proxy statement, submitted by a firefighter’s union).
Since VZ’s definitive proxy wasn’t filed until today (March 23rd), the letter to Crain’s might technically constitute “solicitation materials” prior to the distribution of a definitive proxy, and would be required to be filed with the SEC upon first use/publication. Note that VZ checked the 14a-12 box on the cover of the March 16th filing.
Thanks to 14a-8, VZ usually includes 5 or 6 rule shareholder proposals in its proxy each year–I think there were 9 back in 2004. And this number of course doesn’t include all of the crackpot proposals that the company is allowed to exclude (through no-action requests submitted to the SEC).
Some would question whether the SEC needs to take another look at 14a-8 someday.
March 24th, 2009 at 10:03 am
@ Mark: thanks for the additional perspective. While it sounds like a stretch for anyone to consider a letter to the editor solicitation materials, I’m not an expert on this aspect of the SEC rules and defer to those that are.