DEF 14A of Verizon Communications Inc, Mar 21, 2016

DEF 14A of Verizon Communications Inc

Filed Mar 21, 2016 · FY20150001193125-16-511134

Open on EDGAR

  1. Executive compensation program highlights

    | Objectives Align executives’ and shareholders’ interests Attract, retain and motivate high-performing executives Governance leader Semiannual shareholder outreach Shareholder approval policy for severance benefits Significant executive share ownership requirements Clawback policy Anti-hedging policy Say-on-pay advisory vote every year since 2009 Independent compensation consultant since 2006 | Pay-for-performance | | | | | Extensive focus on variable, incentive-based pay: | | | | | | 10% 90% | Fixed pay Incentive-based pay 70% long-term incentives 20% short-term incentives | | | Total compensation opportunity targeted at median of our peer group No defined benefit pension or supplemental retirement benefits No executive employment agreements No cash severance benefits for the CEO No excise tax gross-ups | | |

  2. 2015 compensation

    | Name and Principal Position | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | Lowell C. McAdam Chairman and Chief Executive Officer | 1,661,538 | 0 | 12,000,065 | 0 | 4,000,000 | 83,092 | 598,965 | 18,343,660 | | Francis J. Shammo Executive Vice President and Chief Financial Officer | 920,192 | 0 | 4,725,031 | 0 | 1,350,000 | 41,566 | 204,052 | 7,240,841 | | Daniel S. Mead Executive Vice President and President of Strategic Initiatives | 1,028,846 | 0 | 5,250,041 | 0 | 1,500,000 | 319,027 | 230,931 | 8,328,845 | | John G. Stratton Executive Vice President and President of Operations | 894,231 | 0 | 4,593,828 | 0 | 1,312,500 | 52,841 | 203,910 | 7,057,310 | | Marni M. Walden Executive Vice President and President of Product Innovation and New Businesses | 894,231 | 0 | 4,375,074 | 0 | 1,312,500 | 44,907 | 174,317 | 6,801,029 |

  3. Key corporate governance features

    | Shareholder rights | | | Majority voting in Director elections | Verizon’s bylaws provide for the election of Directors by a majority of the votes cast in an uncontested election. This provision can only be changed by a majority vote of the shareholders. | | Shareholder right to call a special meeting | Any shareholder owning at least 10% (or any group of shareholders owning at least 25%) of Verizon’s outstanding common stock may call a special meeting of shareholders. Please see our bylaws for requirements relating to special meetings. | | Proxy access right | Any shareholder (or any group of up to 20 shareholders) owning at least 3% of Verizon’s outstanding common stock for at least three years may include a specified number of director nominees in our proxy materials for the annual meeting of shareholders. Our bylaws specify qualifying stock ownership, the number of permitted nominees, and other requirements relating to proxy access. | | Shareholders must approve poison pill | Verizon does not have a shareholder rights plan, commonly referred to as a “poison pill.” Any shareholder rights plan adopted by our Board must be approved by shareholders within one year and then re-approved every three years. | | Shareholder right to ratify executive severance agreements | Shareholders must ratify any employment or severance agreement with an executive officer that provides for severance benefits exceeding 2.99 times the sum of the executive’s base salary plus non-equity incentive plan payment. This policy is described on page 46. | | Board governance | | | Director independence | All of our non-employee Directors are independent, and the standards that our Board uses to assess independence are more stringent than those of the New York Stock Exchange (NYSE) or The NASDAQ Stock Market (Nasdaq). For more information about the independence of the non-employee Directors, see “Independence” on page 4. | | Board leadership | Currently, the Chief Executive Officer (CEO) serves as Chairman of the Board, in consultation with the Lead Director. You can read about the respective roles and responsibilities of the Chairman and the Lead Director, and why our Board believes Verizon’s shareholders are best served by this leadership structure, under “Board Leadership” on page 5. | | Limits on board service updated from 2015 | To ensure that Directors have sufficient time to devote to their responsibilities on Verizon’s board, we recently enhanced our policy about other directorships. Directors with full-time roles for for-profit businesses may not serve on more than three public company boards, and other Directors may not serve on more than four public company boards. Members of our Audit Committee may not serve on more than two other audit committees. | | Stock ownership | Within three years of their election, Directors must hold Verizon stock with a value equal to three times the cash component of the annual Board retainer. Shares held in any deferral plan are included when calculating the number of shares held. | | Director retirement | Directors must retire from the Board the day before the annual meeting of shareholders that follows their 72nd birthday. The size of the Board will be reduced by one for each such retirement. |

  4. Our Board of Directors

    Our Board of Directors This section describes key aspects of our Board’s composition, governance and operation that contribute to its ability to effectively oversee Verizon’s business, provide quality advice to the leadership team and act in the long-term best interests of shareholders.

  5. Election of Directors

    Election of Directors Verizon’s Directors are elected annually. We believe annual elections are consistent with good corporate governance because they foster director accountability and increase shareholder confidence. Verizon’s Board currently has 13 members. The Board periodically evaluates whether a larger or smaller board would be preferable, depending upon its needs and the availability of qualified candidates. Our Board has nominated the 13 candidates below for election as Directors. All of these candidates currently serve as Directors of Verizon. Mr. Weaver was appointed to our Board in September 2015 as an independent Director and was recommended by an independent Director. Dr. Kley was appointed to our Board in November 2015 as an independent Director and was recommended by an independent Director. The Corporate Governance and Policy Committee and our Board concluded that each of the incumbent Directors should be nominated for re-election based on the experience, qualifications, attributes and skills identified below. The Committee and the Board assessed these factors in light of Verizon’s businesses. Each candidate has consented to stand for election, and we do not anticipate that any candidate will be unavailable to serve. If any candidate were to become unavailable before the election, the proxy committee would vote the shares it represents for a substitute named by the Board. Verizon’s bylaws require Directors to be elected by a majority of the votes cast in an uncontested election. Each candidate has submitted an irrevocable, conditional letter of resignation that our Board will consider if that candidate fails to receive a majority of the votes cast.

  6. Election of Directors

    | | Our Board of Directors recommends that you vote for each of the following candidates. |

  7. Election of Directors

    | 14 | Verizon 2016 Proxy Statement |

  8. Election of Directors

    | Director since 2013 Age 53 Independent Committees • Audit • Corporate Governance and Policy | Shellye L. Archambeau Background Ms. Archambeau is Chief Executive Officer of MetricStream, Inc., a leading provider of governance, risk, compliance and quality management solutions to corporations across diverse industries. Prior to joining MetricStream in 2002, Ms. Archambeau served as Chief Marketing Officer and Executive Vice President of Sales for Loudcloud, Inc., Chief Marketing Officer of NorthPoint Communications, and President of Blockbuster Inc.’s e-commerce division. Before she joined Blockbuster, she held domestic and international executive positions during a 15-year career at IBM. Ms. Archambeau has served on the board of Nordstrom, Inc. since February 2015 and, in the past five years, she has served on the board of Arbitron, Inc. Qualifications Ms. Archambeau provides our Board with valuable knowledge of technology, e-commerce, digital media and communications platforms. Her experiences in the Silicon Valley emerging company community, as well as her prior experience at IBM, provide her with global perspectives on developing and marketing emerging technology applications and solutions. | | Director since 2015 Age 59 Independent Committees • Finance | Mark T. Bertolini Background Mr. Bertolini is Chairman and Chief Executive Officer of Aetna Inc., a Fortune 100 diversified healthcare benefits company. Prior to assuming the role of Aetna’s CEO in 2010 and Chairman in 2011, Mr. Bertolini served as President from 2007, responsible for all of Aetna’s businesses and operations across the company’s range of healthcare products and related services, and as Executive Vice President and head of Aetna’s regional businesses prior to that. He joined Aetna in 2003 as head of Aetna’s Specialty Products after holding executive positions at Cigna, NYLCare Health Plans and SelectCare, Inc. Qualifications Mr. Bertolini’s experience at a large, multinational corporation provides our Board with valuable operational and management expertise, as well as critical perspective on strategic planning. His role as Chairman and CEO of Aetna provides our Board with additional insights into the healthcare industry — an area of increasing importance to Verizon’s business strategy. |

  9. Election of Directors

    | Verizon 2016 Proxy Statement | 15 |

  10. Election of Directors

    | Director since 1997 Age 63 Independent Committees • Corporate Governance and Policy • Finance (Chair) • Human Resources | Richard L. Carrión Background Mr. Carrión has served for over 20 years as Chairman and Chief Executive Officer of Popular, Inc., a diversified bank holding company. Mr. Carrión has served as a class A director of the Federal Reserve Bank of New York since 2008. He also served as a director of NYNEX Corporation, one of Verizon’s predecessor companies, from 1995 to 1997. Qualifications Mr. Carrión provides our Board with financial, operational and strategic expertise developed during his long tenure as Chairman and CEO of Popular, Inc. This experience, combined with his board service at the Federal Reserve Bank of New York, also provides our Board with deep risk management expertise. | | Director since 2011 Age 54 Independent Committees • Finance • Human Resources | Melanie L. Healey Background Ms. Healey is the former Group President of The Procter & Gamble Company, one of the leading providers of branded consumer packaged goods. She served in this role from 2007 to 2015. During her tenure at Procter & Gamble beginning in 1990, Ms. Healey held a number of positions of responsibility, including Group President and advisor to the Chairman and CEO, Group President for North America and Group President for the Global Feminine and Health Care Sector. Ms. Healey has served on the Board of Target Corporation since November 2015. Qualifications Ms. Healey provides our Board with valuable strategic, branding, distribution and operating experience on a global scale obtained over her 32-year career in the consumer goods industry in three multinational companies (Procter & Gamble, Johnson & Johnson and S.C. Johnson & Sons). Her deep experience in marketing and operations, including her 18 years outside the United States, provides our Board with strategic and operational leadership and critical insights into brand building and consumer marketing trends globally. |

  11. Election of Directors

    | 16 | Verizon 2016 Proxy Statement |

  12. Election of Directors

    | Director since 2006 Age 69 Independent Committees • Audit • Corporate Governance and Policy (Chair) • Finance | M. Frances Keeth (Lead Director) Background Ms. Keeth was Executive Vice President of Royal Dutch Shell plc, a global energy company, from 2005 to 2006, and was President and Chief Executive Officer of Shell Chemicals LP from 2001 to 2006. During her long tenure at Royal Dutch Shell, Ms. Keeth served in a number of other positions of responsibility, including Executive Vice President, Finance and Business Systems, and Executive Vice President, Customer Fulfillment and Product Business Units. Prior to these positions, Ms. Keeth was controller and principal accounting officer of Mobil Corporation. Ms. Keeth has served as a director of Arrow Electronics, Inc. since 2004 and, in the past five years, she has served as a director of Peabody Energy Corporation. Qualifications Ms. Keeth’s career with Shell has provided her with substantial experience in managing worldwide operations and strategic partnerships in a capital-intensive business. Her expertise provides our Board with critical skills in the areas of financial oversight, aligning financial and strategic initiatives, and risk management. | | Director since 2015 Age 64 Independent | Karl-Ludwig Kley Background Dr. Kley is Chairman of the Executive Board and Chief Executive Officer of Merck KGaA, a leading producer of high-tech products in healthcare, life science and performance materials. He has served in his current role since 2007, and was appointed Vice Chairman of the Executive Board in September 2006. Before joining Merck KGaA, Dr. Kley was a member of the Executive Board of Deutsche Lufthansa AG from 1998 to 2006, where he served as Chief Financial Officer. From 1982 to 1998, Dr. Kley worked for Bayer AG in a variety of positions, including as head of corporate finance and investor relations. Dr. Kley has served as a member of the supervisory board of BMW AG since 2008 and as vice chairman since 2010. He has also served as a member of the supervisory board of Deutsche Lufthansa AG since 2014. Qualifications Dr. Kley brings to our Board significant leadership experience as CEO of an innovative, global operation that is navigating a highly competitive, complex and rapidly changing ecosystem. His extensive expertise in corporate finance acquired during his tenure as CEO, Vice Chairman and Chief Financial Officer of similarly complex organizations, combined with his director roles on the boards of other public companies, provides our Board with a unique global perspective and critical capabilities in strategic oversight and corporate governance. |

  13. Election of Directors

    | Verizon 2016 Proxy Statement | 17 |

  14. Election of Directors

    | Director since 2011 Age 61 Chairman since 2012 | Lowell C. McAdam (Chairman) Background Mr. McAdam is Chairman and Chief Executive Officer of Verizon Communications Inc. Mr. McAdam has served as CEO since 2011 and Chairman since 2012. Prior to becoming CEO, Mr. McAdam served in numerous positions of responsibility, including President and Chief Operating Officer of Verizon Communications Inc., President and CEO of Verizon Wireless, and Executive Vice President and Chief Operating Officer of Verizon Wireless. Before Verizon Wireless was formed, Mr. McAdam held executive positions with PrimeCo Personal Communications, AirTouch Communications and Pacific Bell. In the past five years, Mr. McAdam has served as a member of the Verizon Wireless Board of Representatives. Qualifications Mr. McAdam provides our Board with substantial and wide-ranging expertise in the telecommunications industry, developed during his pivotal role in the development of Verizon Wireless. As CEO of Verizon Communications Inc., he is able to provide our Board with in-depth knowledge of Verizon’s business, industry, challenges and opportunities. | | Director since 2005 Age 71 Independent Committees • Audit (Chair) • Corporate Governance and Policy | Donald T. Nicolaisen Background Mr. Nicolaisen served as Chief Accountant of the United States Securities and Exchange Commission (SEC) from 2003 to 2005. Prior to joining the SEC, he was a senior partner at the accounting firm PricewaterhouseCoopers. Mr. Nicolaisen began his career at the firm’s predecessor, Price Waterhouse, in 1967, and held a wide range of management and leadership positions, including serving on the firm’s U.S. and global boards and leading Price Waterhouse’s national office for accounting and SEC services. Since 2006, Mr. Nicolaisen has served as a director of MGIC Investment Corporation, Morgan Stanley, and Zurich Insurance Group. Qualifications Mr. Nicolaisen’s long career in leadership positions in both the public and private sectors provides our Board with substantial expertise in the areas of public accounting, risk management and corporate finance. This experience, combined with his director roles on the boards of other large, complex firms, provides our Board with additional capabilities in the areas of public policy and corporate governance. |

  15. Election of Directors

    | 18 | Verizon 2016 Proxy Statement |

  16. Election of Directors

    | Director since 2006 Age 59 Independent Committees • Audit • Finance • Human Resources (Chair) | Clarence Otis, Jr. Background Mr. Otis is the former Chairman and Chief Executive Officer of Darden Restaurants, Inc., the largest company-owned and operated full-service restaurant company in the world. He served as CEO of Darden Restaurants from 2004 to 2014 and as Chairman from 2005 to 2014. After joining Darden in 1995 as Vice President and Treasurer, Mr. Otis served in a number of positions of responsibility, including Chief Financial Officer, Executive Vice President, and President of Smokey Bones Barbeque & Grill, a restaurant concept formerly owned and operated by Darden. Mr. Otis has served as a director of VF Corporation since 2004. In the past five years, he also served as a class B director of the Federal Reserve Bank of Atlanta. Qualifications Mr. Otis provides our Board with valuable insight into consumer services, retail operations, financial oversight and risk management. His experience over his 20 years at Darden Restaurants provides him with important perspectives on operations, strategy and management of a complex organization and a large-scale workforce. | | Director since 2010 Age 61 Independent Committees • Corporate Governance and Policy • Human Resources | Rodney E. Slater Background Mr. Slater is a Partner at the law firm Squire Patton Boggs LLP, practicing in the areas of transportation, infrastructure and public policy, a position he has held since 2001. Previously, Mr. Slater served as the U.S. Secretary of Transportation from 1997 to 2001 and as the Administrator of the Federal Highway Administration from 1993 to 1997. Mr. Slater has served as a director of Kansas City Southern since 2001 and Transurban Group since 2009. In the past five years, Mr. Slater has also served as a director of Delta Air Lines, Inc., ICx Technologies, Inc. and Atkins plc. Qualifications Mr. Slater has substantial regulatory and public policy experience at the federal and state levels. Mr. Slater provides our Board with valuable insights on public policy issues and leadership on matters involving multiple stakeholders. He also provides our Board with perspectives on strategic partnerships and legal issues. |

  17. Election of Directors

    | Verizon 2016 Proxy Statement | 19 |

  18. Election of Directors

    | Director since 2012 Age 53 Independent Committees • Audit • Corporate Governance and Policy | Kathryn A. Tesija Background Ms. Tesija is Strategic Advisor of Target Corporation, the second largest discount retailer in the United States. Prior to assuming her current role, Ms. Tesija served as Executive Vice President and Chief Merchandising and Supply Chain Officer at Target from 2008 to 2015. Since joining Target in 1986, Ms. Tesija has served in numerous positions of responsibility, including Director, Merchandise Planning and Senior Vice President, Hardlines Merchandising. Qualifications Ms. Tesija provides our Board with valuable large-scale global merchandising and supply chain experience, as well as operational perspectives and strategic planning expertise. Her tenure as EVP and Chief Merchandising and Supply Chain Officer provides our Board with additional insights into the retail industry and consumer behavior. | | Director since 2013 Age 57 Independent Committees • Audit • Human Resources | Gregory D. Wasson Background Mr. Wasson is the former President and Chief Executive Officer of Walgreens Boots Alliance, Inc., the first global pharmacy-led health and wellbeing enterprise. From 2009 through 2014 he was Director, President and Chief Executive Officer of Walgreen Co. A registered pharmacist, he joined Walgreen in 1980 and served in a number of positions of responsibility, including President of Walgreens Health Initiatives, Senior Vice President, Executive Vice President, and President and Chief Operating Officer. Mr. Wasson has served on the board of The PNC Financial Services Group, Inc. since July 2015 and, in the past five years, he has served on the boards of Walgreen Co. and AmerisourceBergen Corporation. Qualifications Mr. Wasson provides our Board with valuable global operational and management experience, as well as extensive knowledge of the retail and healthcare industries. His tenure as CEO of a large publicly-held company provides our Board with additional in-depth perspective in organizational management. |

  19. Election of Directors

    | 20 | Verizon 2016 Proxy Statement |

  20. Election of Directors

    | Director since 2015 Age 64 Independent | Gregory G. Weaver Background Mr. Weaver served as Chairman and Chief Executive Officer of Deloitte’s audit and enterprise risk services firm, Deloitte & Touche LLP, from 2012 to 2014 and from 2001 to 2005. From 2006 to 2012, he served on the Board of Directors of Deloitte’s U.S. organization and on its Governance, Compensation and Succession Committees. During Mr. Weaver’s 40 years of experience at Deloitte, including 30 years as a partner, he served as lead client service partner, audit partner and advisory partner for several of Deloitte & Touche’s largest clients. Mr. Weaver has served on the board of trustees of the Goldman Sachs Trust since 2015. Qualifications Mr. Weaver provides our Board with significant expertise in the areas of public accounting, risk management and related regulatory matters, which he developed over a long career with a leading audit firm. He also brings to the Board valuable experience with the operational and governance issues faced by a large, complex organization like Verizon. |

  21. Election of Directors

    | Verizon 2016 Proxy Statement | 21 |

  22. Executive Compensation

    | • | Encouraging strong short-term and long-term performance; |

  23. Executive Compensation

    | • | Aligning the executives’ long-term interests with those of our shareholders; and |

  24. 2015 performance results(1)

    2015 performance payouts: Based on Verizon’s financial performance in 2015, the 2015 short-term incentive award was paid at 100% of its targeted level. Based on Verizon’s total shareholder return and free cash flow over the past three years, the Performance Stock Units granted in connection with the 2013-2015 long-term incentive award vested at 62% of the targeted level. 2015 base salary increases: Based on an analysis of market data, the Committee approved base salary increases in 2015 of 9.1% for Mr. Shammo, 5.3% for Mr. Mead, 9.4% for Mr. Stratton, and 9.4% for Ms. Walden. Mr. McAdam did not receive a base salary increase in 2015.

  25. Independent Compensation Consultant

    Independent Compensation Consultant The Committee has the sole authority to retain and terminate a compensation consultant and to approve all terms of the engagement, including fees. The Committee has retained Pearl Meyer as its compensation consultant (Consultant) based on the firm’s independence and expertise in representing the compensation committees of large corporations. The Consultant advises the Committee on all matters related to the compensation of our named executive officers. This includes providing benchmarking data and helping the Committee interpret this data, as well as helping the Committee interpret data provided by the Company. The Consultant participates in all Committee meetings. The Committee typically holds an executive session with the Consultant at every Committee meeting. The Committee has adopted a policy that prohibits the Consultant from doing any work for the Company during its engagement. Neither Pearl Meyer nor its affiliates have performed any work for the Company or any Company affiliate since the Committee retained the Consultant in 2006. The Committee has considered the independence of Pearl Meyer in light of SEC rules and NYSE and Nasdaq listing standards. At the Committee’s request, Pearl Meyer provided a letter addressing its independence, including the following factors:

  26. Independent Compensation Consultant

    | • | No other services provided to the Company by the Consultant; |

  27. Independent Compensation Consultant

    | • | Fees paid by the Committee as a percentage of the Consultant’s total revenue; |

  28. Independent Compensation Consultant

    | • | Policies or procedures maintained by the Consultant that are designed to prevent a conflict of interest; |

  29. Independent Compensation Consultant

    | • | Any business or personal relationships between the individual consultants involved in the engagement and a member of the Committee; |

  30. Independent Compensation Consultant

    | • | Any Company stock owned by the individual consultants involved in the engagement; and |

  31. Independent Compensation Consultant

    | • | Any business or personal relationships between our executive officers and the Consultant or the individual consultants involved in the engagement. |

  32. Independent Compensation Consultant

    | Verizon 2016 Proxy Statement | 29 |

  33. Independent Compensation Consultant

    Compensation Discussion and Analysis | Roles and responsibilities The Committee has concluded that no conflict of interest exists that would prevent Pearl Meyer from serving as an independent consultant to the Committee.

  34. Peer group selection and the role of benchmarking

    Peer group selection and the role of benchmarking The Committee uses the same peer group to benchmark executive pay opportunities and to evaluate Verizon’s relative stock performance under the Long-Term Plan. This peer group, which we call the Related Dow Peers, includes the 29 companies (other than Verizon) in the Dow Jones Industrial Average, plus Verizon’s five largest industry competitors that are not included in the Dow Jones Industrial Average. This group of companies is appropriate for the dual purpose of benchmarking executive pay opportunities and evaluating relative stock performance under the Long-Term Plan because it is comprised of companies similar to us in market capitalization, net income, revenue and total employees that are included in an established and recognized index, as well as Verizon’s five other largest industry competitors. These companies represent Verizon’s primary competitors for executive talent and investor dollars. Moreover, this peer group is self-adjusting so that changes in the companies included in the Dow Jones Industrial Average are also reflected in the Related Dow Peers over time. For these reasons, the Committee believes that use of the Related Dow Peers provides a consistent measure of Verizon’s performance and makes it easier for shareholders to understand, evaluate and monitor Verizon’s compensation program. The Committee evaluates whether the compensation opportunities for executives are appropriate and competitive by comparing each named executive officer’s total compensation opportunity – which represents the sum of the executive’s base salary and target award amounts under the Short-Term Incentive Plan (Short-Term Plan) and Long-Term Plan – to the total compensation opportunities for executives in comparable positions at peer companies. The Committee references the 50th percentile of the Related Dow Peers when making this comparison, although a named executive officer’s total compensation opportunity may be higher or lower depending upon the executive’s tenure and overall level of responsibility. The Committee believes that the 50th percentile is an appropriate targeted level of total compensation opportunity because of Verizon’s size relative to the Related Dow Peers. The total amount of compensation an executive receives may vary from the targeted opportunity based on Verizon’s actual annual and long-term performance results.

  35. Peer group selection and the role of benchmarking

    | 30 | Verizon 2016 Proxy Statement |

  36. Peer group selection and the role of benchmarking

    Compensation Discussion and Analysis | Peer group selection and the role of benchmarking

  37. Related Dow Peer information

    Related Dow Peer information Verizon uses the Related Dow Peers for purposes of benchmarking pay opportunities and evaluating relative stock performance for the PSU grant under the Long-Term Plan. The following chart shows the companies included in the Related Dow Peers, as constituted on March 6, 2015, the date of the 2015 PSU grant. The chart includes each company’s market capitalization as of December 31, 2015 as reported by Bloomberg, as well as net income attributable to the company, revenue and total number of employees as of each company’s most recent fiscal year-end as reported in SEC filings.

  38. Related Dow Peer information

    Compensation Discussion and Analysis | Peer group selection and the role of benchmarking

  39. Compensation objectives

    Compensation objectives Verizon’s executive compensation program supports the creation of shareholder value through four key objectives: Attract and retain high-performing executives with the leadership abilities and experience necessary in an enterprise with our scale, breadth and complexity to develop and execute our business strategies, drive superior results, meet diverse challenges and build long-term shareholder value; Pay for superior results and sustainable growth by rewarding the achievement of challenging performance goals; Drive performance and create shareholder value by emphasizing variable, at-risk compensation with an appropriate balance of short-term and long-term objectives that align executive and shareholder interests; and Manage risk through oversight and compensation design features and practices that balance short-term and long-term incentives and cap maximum payments. Our compensation program has two features the Committee believes promotes a performance-based culture that links the interest of management and shareholders. First, the compensation program focuses extensively on variable, performance-based compensation, with fixed compensation in the form of base salary constituting only approximately 10% of each executive’s total compensation opportunity. Second, we do not offer guaranteed defined benefit pension or supplemental pension benefits. In establishing the mix of incentive pay for the named executive officers, the Committee balances the importance of meeting Verizon’s short-term business goals with the need to create shareholder value over the longer term. To that end, long-term target compensation opportunities are more than double the annual base salary and short-term incentive target compensation opportunities. Moreover, long-term compensation opportunities reward sustained performance and also encourage high-performing executives to remain with Verizon. Specifically, the long-term incentive program features three-year performance cycles, with awards consisting of PSUs subject to both performance-based and time-based vesting requirements, and RSUs subject to time-based vesting requirements.

  40. Elements of compensation

    | Pay element | Characteristics | Primary objective | | Base salary | Annual fixed cash compensation | Attract and retain high-performing and experienced executives | | Short-term incentive opportunity | Annual variable cash compensation based on the achievement of predetermined annual performance measures | Motivate executives to achieve challenging short-term performance targets | | Long-term incentive opportunity | Long-term variable equity awards granted annually as a combination of PSUs and RSUs | Align executives’ interests with those of shareholders, encourage efforts to grow long-term value, and retain executives |

  41. Elements of compensation

    Compensation Discussion and Analysis | Compensation objectives and elements of compensation The Committee references the 50th percentile of the Related Dow Peers to benchmark the total compensation opportunity of each named executive officer. While the Committee does not benchmark each individual element of compensation, it does review market data with respect to the mix of annual cash and long-term equity components for similarly situated executives among the Related Dow Peers.

  42. Performance target setting

    | • | Verizon’s short- and long-term strategy; |

  43. Performance target setting

    | • | Financial analysts’ consensus estimates for the performance measures over future performance cycles; |

  44. Performance target setting

    | • | The correlation among the performance measures and considerations of how Verizon’s operational performance will affect each measure differently; and |

  45. Performance target setting

    | • | With regard to the diversity and sustainability metric in the Short-Term Plan, Verizon’s values and long-term commitment to being a responsible member of the communities we serve. |

  46. Performance target setting

    In addition, with regard to target setting for TSR performance, the Committee structured the PSU vesting schedule so that each incremental percentage of achievement between the threshold and maximum performance levels results in a corresponding change in the percent of the award that vests. The Committee established this structure to encourage executives to focus on each individual decision and action as having a direct and clearly evident impact on levels of compensation.

  47. 2015 short-term incentive compensation

    2015 short-term incentive compensation The Verizon Short-Term Plan motivates executives to achieve challenging short-term performance targets. Each year, the Committee establishes the potential value of the opportunities under the Short-Term Plan, as well as the performance targets required to achieve these opportunities. The Committee sets the values of the Short-Term Plan award opportunities as a percentage of an executive’s base salary based on the scope of the executive’s responsibilities and on the competitive pay practices of the Related Dow Peers. These award opportunities are established at threshold, target and maximum levels. The Short-Term Plan award opportunities at the threshold, target and maximum levels for each of the named executive officers are shown in the Grants of Plan-Based Awards table on page 49.

  48. 2015 short-term incentive compensation

    | Verizon 2016 Proxy Statement | 35 |

  49. 2015 short-term incentive compensation

    The following table shows the 2015 Short-Term Plan target award opportunity for each of the named executive officers:

  50. 2015 short-term incentive compensation

    | 2015 Short-Term Plan target award opportunity | | | | Named executive officer | As a percentage of base salary | As a dollar value | | Mr. McAdam | 250% | $4,000,000 | | Mr. Shammo | 150% | $1,350,000 | | Mr. Mead | 150% | $1,500,000 | | Mr. Stratton | 150% | $1,312,500 | | Ms. Walden | 150% | $1,312,500 |

  51. 2015 short-term incentive compensation

    The executives’ target award opportunities, expressed as a percentage of their respective base salaries, did not change for 2015. Other than for Mr. McAdam, the dollar value of the target award opportunities increased from 2014 solely as a result of the base salary increases described above. For Mr. McAdam, the dollar value of the 2015 target award opportunity did not change from 2014 because he did not receive a base salary increase in 2015.

  52. Annual performance measures

    Annual performance measures The extent to which the named executive officers earn short-term incentive awards is based on Verizon’s performance with respect to measures established by the Committee. At the beginning of each year, the Committee reviews and establishes the performance measures for the Short-Term Plan and sets targets that are appropriate to motivate executives to achieve challenging financial and operational performance levels that are consistent with Verizon’s strategic plan. In the first quarter of 2015, the Committee reviewed and approved the performance measures for the 2015 Short-Term Plan. Consistent with past practice, the Short-Term Plan award opportunities were based primarily on achieving specific goals under three Company-wide financial and operating performance measures: adjusted earnings per share (EPS), total revenue and free cash flow. These measures were selected to reflect Verizon’s strategic goals of encouraging profitable operations, overall growth and efficient use of capital.

  53. Annual performance measures

    | 36 | Verizon 2016 Proxy Statement |

  54. Annual performance measures

    The 2015 performance measures, along with the weighting ascribed to each, are shown below as a percentage of the total Short-Term Plan award opportunity at target level performance.

  55. Annual performance measures

    | | The Committee believes that these performance measures are appropriate to motivate Verizon’s executives to achieve outstanding short-term results and, at the same time, help build long-term value for shareholders. The 2015 measures are described in detail below. |

  56. Annual performance measures

    | 50% | Adjusted EPS Target range: $3.73 to $3.82 The Committee views adjusted EPS as an important indicator of Verizon’s success in delivering shareholder value. The Committee assigns the greatest weight to adjusted EPS in determining awards under the Short-Term Plan because this measure is broadly used and recognized by investors as a key indicator of ongoing operational performance and profitability. Adjusted EPS excludes non-operational items, including, among other things, impairments and gains and losses from divestitures, business combinations, changes in accounting principles, the net impact of pension and post-retirement benefit costs, extraordinary items and restructurings. Since adjusted EPS is not impacted from period to period by these types of items, the Committee believes it better reflects the relative success of the ongoing business. | | 25% | Free cash flow Target range: $14.1 billion to $15.5 billion The Committee views consolidated free cash flow as another important indicator of Verizon’s success in delivering shareholder value because it measures our ability to generate cash from operations and is often used by investors in their equity valuation models. Free cash flow is calculated by subtracting capital expenditures from cash flow from operations. The Committee believes this measure is meaningful because Verizon’s businesses require significant capital investment, and the level of free cash flow reflects how efficiently we are managing capital expenditures. Free cash flow also indicates the amount of cash Verizon has available to return to shareholders in the form of dividends and to reduce its outstanding debt. We consider both of these to be important goals, especially in light of our commitment to returning to the Company’s credit rating profile prior to our acquisition of sole ownership of Verizon Wireless in 2014. |

  57. Annual performance measures

    | Verizon 2016 Proxy Statement | 37 |

  58. Annual performance measures

    | 20% | Total revenue Target range: $132.6 billion to $134.0 billion The Committee views consolidated total revenue as an important indicator of Verizon’s growth and success in managing capital investments. This measure also reflects the level of penetration of Verizon’s products and services in key markets. | | 5% | Diversity and sustainability Targets: Retain percentage of U.S.-based minority and female employees year-over-year; direct at least 9.4% of our overall supplier spending to minority- and female-owned firms; reduce our carbon intensity by at least 3% compared to the prior year We are committed to promoting diversity among our employees and to recognizing and encouraging the contribution of diverse business partners to our success. We are also committed to reducing the environmental impact of our operations. Our connected solutions empower industries and institutions to transform the way they work by making them more efficient, and creating smarter systems. We have incorporated many of these solutions in our own business to support our goal of cutting Verizon’s carbon intensity — carbon emissions produced per terabyte of data flowing through our networks — in half by 2020. To reflect these important commitments, the diversity target is measured by the number of U.S.-based minority and female employees across the enterprise compared to the prior year and the levels of Verizon’s spending with minority- and female-owned or operated suppliers. The sustainability target is measured by reduction in the carbon intensity of our operations compared to the prior year. |

  59. Annual performance measures

    The achievement of the Short-Term Plan award opportunity with respect to each performance measure varies depending on the Committee’s assessment of Verizon’s performance with respect to that measure.

  60. Annual performance measures

    | 38 | Verizon 2016 Proxy Statement |

  61. Annual performance measures

    No awards are paid under the Short-Term Plan if Verizon’s return on equity (ROE) for the plan year, based on adjusted net income, does not exceed 8%, even if some or all of the other performance measures are achieved. The Short-Term Plan provides for performance measures to be determined on an adjusted basis to mitigate the impact of certain types of events not contemplated at the time the performance measures were set, such as significant transactions, changes in legal or regulatory policy and other non-operational items. 2015 Short-Term Plan award. After considering the level of performance with respect to each performance measure, and based on an assessment of the level of achievement of each goal individually and collectively, the Committee determines the final Short-Term Plan award as a percentage of the target level for all executives. For 2015, this payout percentage was determined to be 100% of the target level. The following table shows the amount of the Short-Term Plan awards paid to each named executive officer.

  62. Annual performance measures

    | Named Executive Officer | Actual 2015 Short-Term Plan award ($) | | Mr. McAdam | 4,000,000 | | Mr. Shammo | 1,350,000 | | Mr. Mead | 1,500,000 | | Mr. Stratton | 1,312,500 | | Ms. Walden | 1,312,500 |

  63. Annual performance measures

    | Verizon 2016 Proxy Statement | 39 |

  64. Long-term incentive compensation

    Long-term incentive compensation The Verizon Long-Term Plan is intended to align executives’ and shareholders’ interests and reward participants for creating long-term shareholder value. The Committee believes it is important to establish a multi-year performance cycle under the Long-Term Plan in order to meaningfully evaluate the performance of long-term strategies and the effect on value created for shareholders. Based on this consideration, the Committee determined that a three-year performance cycle is appropriate for the Long-Term Plan awards. Consistent with past practice, Long-Term Plan awards are made in PSUs and RSUs. The value of each PSU or RSU is equal to the value of one share of Verizon common stock. The Committee generally establishes an executive’s Long-Term Plan award opportunity as a percentage of base salary and determines the number of PSUs and RSUs to be awarded based on the stock price on the grant date. The Committee assumes each executive will earn 100% of the PSUs and RSUs awarded for purposes of determining the total compensation opportunity. PSUs and RSUs accrue dividend equivalents that are deemed to be reinvested in PSUs and RSUs, respectively. Dividend equivalents are paid only to the extent that PSUs and RSUs are actually earned. The number of PSUs actually earned and paid is determined based upon Verizon’s achievement of pre-established performance targets over the three-year performance cycle, with the ultimate value of each PSU based on the closing price of Verizon’s common stock on the last trading day of the final year of the performance cycle. Because the value of PSUs is linked to our stock price, PSUs provide a strong incentive to executives to deliver value to Verizon’s shareholders. RSUs vest and are paid based on the executive remaining employed with Verizon through the end of the three-year award cycle, which provides a retention incentive as well as a performance link as the value of the award depends on Verizon’s stock price. Consistent with the four prior award cycles, the 2015 PSUs are payable in cash and the 2015 RSUs are payable in Verizon shares. The Committee believes this mix creates an appropriate balance between the potential shareholder dilution from paying awards in shares and cash flow considerations. In addition, paying the 2015 RSU awards in shares is consistent with Verizon’s policy of requiring a significant level of equity ownership by our named executive officers.

  65. 2015 Long-Term Plan award opportunities

    2015 Long-Term Plan award opportunities The Long-Term Plan award is intended to encourage retention among our highly-qualified executive team and drive executives to deliver superior TSR performance and create free cash flow. To that end, consistent with past practice, each of the named executive officers received 60% of their 2015 Long-Term Plan award in the form of PSUs and 40% in the form of RSUs. Two-thirds of the PSUs are eligible

  66. 2015 Long-Term Plan award opportunities

    | 40 | Verizon 2016 Proxy Statement |

  67. 2015 Long-Term Plan award opportunities

    to vest based on Verizon’s relative total shareholder return (TSR), and one-third is eligible to vest based on Verizon’s cumulative free cash flow. In selecting the performance measures for the Long-Term Plan award, the Committee views Verizon’s TSR as compared to the TSR of the companies in the Related Dow Peers as a critical indicator of our success as it measures our ability to attract investor dollars and to return value to our shareholders. The Committee also views free cash flow as an important indicator of our success as it measures our ability to generate cash from operations that may be reinvested in our business, used to make acquisitions or returned to shareholders in the form of dividends or through share repurchases. The Committee generally establishes each executive’s Long-Term Plan target award opportunity as a percentage of base salary. The 2015 target award opportunities for each of the named executive officers are shown in the table below. For the named executive officers other than Mr. McAdam, the dollar amount of the target award opportunities increased from 2014 solely as a result of the base salary increases described on page 35; the executives’ target award opportunities, expressed as a percentage of their respective base salaries, did not change. For Mr. McAdam, the 2015 target award opportunity did not change from 2014 because he did not receive a base salary increase in 2015. The Committee sets the award levels to provide a total compensation opportunity that approximates the 50th percentile for comparable executives within the Related Dow Peers, while maintaining a compensation mix with each executive’s target annual Long-Term Plan award opportunity representing approximately 70% of that executive’s compensation opportunity. The target award opportunity for an executive is allocated between PSUs and RSUs as noted above, and the target award opportunity allocated to each type of award is converted into a target number of shares using the closing price of Verizon’s common stock on the grant date. The following table shows the target value of the 2015 Long-Term Plan awards granted to the named executive officers.

  68. 2015 Long-Term Plan award opportunities

    | 2015 Long-Term Plan target award opportunity | | | | Named Executive Officer | As a percentage of base salary | As a dollar value | | Mr. McAdam | 750% | $12,000,000 | | Mr. Shammo | 525% | $4,725,000 | | Mr. Mead | 525% | $5,250,000 | | Mr. Stratton | 525% | $4,593,750 | | Ms. Walden | 500% | $4,375,000 |

  69. 2015 Long-Term Plan award opportunities

    | Verizon 2016 Proxy Statement | 41 |

  70. 2015 Long-Term Plan award opportunities

    | Terms of 2015 PSU awards Total Shareholder Return metric. Two-thirds of the PSUs will vest based on relative TSR performance (TSR PSUs). The accompanying chart shows the percentage of the TSR PSUs awarded for the 2015-2017 performance cycle that will vest based on Verizon’s relative TSR position compared with the companies in the Related Dow Peers as constituted on the date the award was granted. Verizon’s TSR during the performance cycle must rank at least 15th — the 59th percentile — among the Related Dow Peers for 100% of the target number of TSR PSUs to vest, meaning Verizon must achieve above median TSR PSU performance for target vesting. The maximum number of TSR PSUs (200% of target) will vest only if Verizon’s TSR during the three-year performance cycle ranks among the top four companies in the Related Dow Peers — the 91st percentile or higher. If Verizon’s TSR during the three-year performance cycle ranks below 25th — approximately the 29th percentile — of the companies in the Related Dow Peers, none of the TSR PSUs will vest. Free Cash Flow metric. One-third of the PSUs will vest based on Verizon’s cumulative free cash flow (FCF PSUs). The percentage of the FCF PSUs awarded for the 2015-2017 performance cycle that will vest is based on the extent to which Verizon’s cumulative FCF over the performance cycle meets or exceeds the cumulative FCF performance levels set by the Committee at the beginning of the performance cycle. FCF is calculated by subtracting capital expenditures from cash flow from operations, and is subject to adjustment to eliminate the financial impact of significant transactions, changes in legal or regulatory policy and other extraordinary items. The cumulative FCF target for the 2015-2017 performance cycle was set at a level that the Committee believes may be challenging in light of the business environment, but attainable. The number of FCF PSUs that will vest ranges from 0% if actual performance is below the threshold level to 200% if actual performance is at or above the maximum cumulative FCF level. The number of FCF PSUs that will vest in between identified performance levels will be determined by linear interpolation between vesting percentage levels. | TSR PSU vesting by performance level | | | | | Verizon’s TSR rank among Related Dow Peers | Percent of TSR PSUs that vest | | | | 1st | 200% | | | | 2nd | 200% | | | | 3rd | 200% | | | | 4th | 200% | | | | 5th | 172% | | | | 6th | 165% | | | | 7th | 158% | | | | 8th | 151% | | | | 9th | 144% | | | | 10th | 137% | | | | 11th | 130% | | | | 12th | 123% | | | | 13th | 116% | | | | 14th | 109% | | | | 15th | 102% | | | | 16th | 95% | | | | 17th | 88% | | | | 18th (median) | 81% | | | | 19th | 74% | | | | 20th | 67% | | | | 21st | 60% | | | | 22nd | 53% | | | | 23rd | 46% | | | | 24th | 39% | | | | 25th | 32% | | | | 26th | 0% | | | | 27th | 0% | | | | 28th | 0% | | | | 29th | 0% | | | | 30th | 0% | | | | 31st | 0% | | | | 32nd | 0% | | | | 33rd | 0% | | | | 34th | 0% | | | | 35th | 0% | |

  71. 2015 Long-Term Plan award opportunities

    | 42 | Verizon 2016 Proxy Statement |

  72. 2013 PSU awards earned in 2015

    2013 PSU awards earned in 2015 With respect to the PSUs awarded in 2013, the Committee determined the number of PSUs that vested for a participant based on the level of achievement of the two performance metrics over the three-year performance cycle: 2013 TSR PSUs. Two-thirds of the PSUs awarded were eligible to vest based on Verizon’s TSR ranking for the 2013-2015 performance cycle relative to the Related Dow Peers as constituted on the date the award was granted. The percentage of TSR PSUs awarded for the 2013-2015 performance cycle that would vest at each different level of Verizon’s relative TSR positioning compared with the companies in the applicable Related Dow Peers was identical to the percentage at each performance level for the 2015-2017 grant shown on the prior page, with the exception that, for the 2015-2017 grant, a company was added to the Related Dow Peers, bringing the total number of companies to 35. This addition was made as a result of T-Mobile US’s acquisition of MetroPCS, which caused T-Mobile US to become a publicly traded company in the United States. Over the three-year performance cycle ending December 31, 2015, Verizon’s TSR ranked 24th among the Related Dow Peers, resulting in a vesting percentage of 39% for the TSR PSUs. 2013 FCF PSUs. One-third of the PSUs awarded was eligible to vest based on Verizon’s cumulative free cash flow over the 2013-2015 performance cycle compared to the performance targets set by the Committee at the beginning of the three-year cycle. The following shows the percentage of FCF PSUs awarded for the 2013-2015 performance cycle that would vest based on Verizon’s cumulative free cash flow over the 2013-2015 performance cycle at different performance levels:

  73. 2013 PSU awards earned in 2015

    | Verizon’s cumulative free cash flow (in billions) | Percentage of awarded FCF PSUs that vest(1) | | Greater than $73.0 | 200% | | $68.0 | 150% | | $64.0 | 100% | | $53.0 | 50% | | Less than $53.0 | 0% | | 1 For achievement between the stated levels, vesting is determined by linear interpolation. | |

  74. 2013 PSU awards earned in 2015

    At the time the 2013-2015 award was granted, the Committee provided for free cash flow to be determined on an adjusted basis to preserve the intended incentives by excluding the impact of certain types of events not contemplated by our 2013-2015 financial plan, such as significant transactions, changes in legal or regulatory policy, and other non-operational items. In determining Verizon’s free cash flow over the performance cycle, the Committee made adjustments for the acquisition of sole ownership of Verizon Wireless in February 2014 and the monetization of the Verizon Wireless cell tower portfolio in March 2015, as these transactions were not contemplated when the FCF PSU targets were set. These adjustments are set forth in Appendix A. In accordance with this adjustment methodology, the Committee determined that Verizon’s cumulative free cash flow over the performance cycle was $64.7 billion, which resulted in a vesting percentage of 109%. The adjustments with respect to the acquisition of sole ownership of Verizon Wireless are consistent with the adjustments the Committee made in 2014 to Verizon’s free cash flow for

  75. 2013 PSU awards earned in 2015

    | Verizon 2016 Proxy Statement | 43 |

  76. 2013 PSU awards earned in 2015

    the 2012-2014 FCF PSUs. The monetization of the Verizon Wireless cell tower portfolio resulted in higher free cash flow than was anticipated at the time the FCF PSU targets were set, so free cash flow was reduced by amounts attributable to that transaction. 2015 PSU payout. As a result of the achievements described above, in the first quarter of 2016 the Committee approved a payment to all participants in the Long-Term Plan, including the named executive officers, of 62% of the PSUs awarded for the 2013-2015 performance cycle, which represents the weighted average of the two vesting percentages described above, plus dividend equivalents credited on those vested PSUs. The Committee noted that Verizon’s relative TSR performance over the 2013-2015 performance cycle surpassed the performance of only approximately one third of the Related Dow Peers. This resulted in a PSU payout that is significantly less than in recent years, which is consistent with the compensation program’s philosophy of pay-for-performance alignment.

  77. Severance and change in control benefits

    Severance and change in control benefits The Committee believes that maintaining a competitive level of separation benefits is appropriate as part of an overall program designed to attract, retain and motivate the highest-quality management team. However, the Committee does not believe that named executive officers should be entitled to receive cash severance benefits merely because a change in control occurs. Therefore, the payment of cash severance benefits is triggered only by an actual or constructive termination of employment. Verizon was not a party to any employment agreement with any of the named executive officers in 2015. All senior managers (including all named executive officers except Mr. McAdam) are eligible to participate in the Verizon Senior Manager Severance Plan, which provides certain separation benefits to participants whose employment is involuntarily terminated without cause. Mr. McAdam is not eligible to participate in the Senior Manager Severance Plan and is not entitled to receive any cash severance benefits upon his separation from the Company. The Senior Manager Severance Plan is generally consistent with the terms and conditions of Verizon’s broad-based severance plan for management employees other than senior managers. Under the Senior Manager Severance Plan, if a participant has been involuntarily terminated without cause (or, in the case of a named executive officer, if the independent members of the Board determine that there has been a qualifying separation), the participant is eligible to receive a lump-sum cash separation payment equal to a multiple of his or her base salary plus target short-term incentive opportunity, along with continuing medical coverage for the applicable severance period. To the extent that a senior manager is eligible for severance benefits under any other arrangement, that person may not receive any duplicative benefits under the Senior Manager Severance Plan. The Senior Manager Severance Plan does not provide for any severance benefits based upon a change in control of the Company. Under the Senior Manager Severance Plan, each named executive officer (other than Mr. McAdam) is eligible to receive a cash separation payment equal to two times the sum of his or her base salary and target short-term incentive opportunity. To be eligible for any severance benefits, participants must execute a release of claims against Verizon in the form satisfactory to Verizon and agree not to compete or interfere with any Verizon business for a period of one year after their separation. Consistent with the Committee’s belief that named executive officers should not be entitled to receive cash severance benefits merely because a change in control occurs, the Long-Term Plan does not allow “single trigger” accelerated vesting and payment of outstanding awards upon a change in control. Instead, the Long-Term Plan requires a “double trigger.” Specifically, if, in the 12 months following a change in control that participant’s employment is terminated without cause, all then-unvested PSUs will fully vest at the target level performance, all then-unvested RSUs will fully vest, and PSUs and RSUs (including accrued dividend equivalents) will become payable on the regularly scheduled payment date after the end of the applicable award cycle.

  78. Shareholder approval of certain severance arrangements

    Shareholder approval of certain severance arrangements The Committee has a policy of seeking shareholder approval or ratification of any new employment or severance agreement with an executive officer that provides for a total cash value severance payment exceeding 2.99 times the sum of the executive’s base salary plus Short-Term Plan target opportunity. The policy defines severance pay broadly to include payments for any consulting services, payments to secure a non-compete agreement, payments to settle any litigation or claim, payments to offset tax liabilities, payments or benefits that are not generally available to similarly situated management employees and payments in excess of, or outside, the terms of a Verizon plan or policy.

  79. Tax and accounting considerations

    Tax and accounting considerations Federal income tax law generally prohibits a publicly-held company from deducting compensation paid to a named executive officer (other than a chief financial officer) that exceeds $1 million during the tax year unless it is based upon attaining pre-established performance measures that are set by the company’s compensation committee under a plan approved by the company’s shareholders. The Committee has the flexibility to take any compensation-related actions that it determines are in the best interests of Verizon and our shareholders, including determining when to request shareholder approval of incentive plans and when to award compensation that may not qualify for a tax deduction. Compensation paid to the named executive officers under the Short-Term Plan, as well as the PSUs awarded under the Long-Term Plan, are generally intended to meet the performance-based exception for deductibility under the tax laws. However, these rules impose a number of requirements and are subject to change, sometimes with retroactive effect. There can be no assurance that any compensation will in fact be deductible. The Committee also considers the effect of certain accounting rules that apply to the various aspects of the compensation program for our named executive officers. The Committee reviews potential accounting effects in determining whether its compensation actions are in the best interests of Verizon and our shareholders. The Committee has been advised by management that the impact of the variable accounting treatment required for long-term incentive awards payable in cash (as opposed to fixed accounting treatment for awards that are payable in shares) will depend on future stock performance.

  80. Summary compensation table

    Summary compensation table

  81. Summary compensation table

    | Name and Principal Position (a) | Year (b) | Salary(1) ($) (c) | Bonus ($) (d) | Stock Awards(2) ($) (e) | Option Awards ($) (f) | Non-Equity Incentive Plan Compensation(3) ($) (g) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(4) ($) (h) | All Other Compensation(5) ($) (i) | Total ($) (j) | | Lowell McAdam Chairman and Chief Executive Officer | 2015 | 1,661,538 | 0 | 12,000,065 | 0 | 4,000,000 | 83,092 | 598,965 | 18,343,660 | | | 2014 | 1,580,769 | 0 | 12,000,052 | 0 | 3,800,000 | 75,647 | 850,041 | 18,306,509 | | | 2013 | 1,480,769 | 0 | 9,375,077 | 0 | 4,125,000 | 64,886 | 780,874 | 15,826,606 | | Francis Shammo Executive Vice President and Chief Financial Officer | 2015 | 920,192 | 0 | 4,725,031 | 0 | 1,350,000 | 41,566 | 204,052 | 7,240,841 | | | 2014 | 815,385 | 0 | 4,331,294 | 0 | 1,175,625 | 12,491 | 163,956 | 6,498,751 | | | 2013 | 760,577 | 0 | 4,068,783 | 0 | 937,750 | 10,475 | 163,476 | 5,941,061 | | Daniel Mead Executive Vice President and President of Strategic Initiatives | 2015 | 1,028,846 | 0 | 5,250,041 | 0 | 1,500,000 | 319,027 | 230,931 | 8,328,845 | | | 2014 | 940,385 | 0 | 4,987,527 | 0 | 1,353,750 | 160,485 | 236,157 | 7,678,304 | | | 2013 | 880,769 | 0 | 4,725,020 | 0 | 1,089,000 | 199,644 | 286,634 | 7,181,067 | | John Stratton Executive Vice President and President of Operations | 2015 | 894,231 | 0 | 4,593,828 | 0 | 1,312,500 | 52,841 | 203,910 | 7,057,310 | | | 2014 | 785,577 | 0 | 4,200,028 | 0 | 1,140,000 | 30,023 | 188,530 | 6,344,158 | | | 2013 | 715,385 | 0 | 3,806,297 | 0 | 877,250 | 37,128 | 139,433 | 5,575,493 | | Marni Walden Executive Vice President and President of Product Innovation and New Businesses | 2015 | 894,231 | 0 | 4,375,074 | 0 | 1,312,500 | 44,907 | 174,317 | 6,801,029 |

  82. Summary compensation table

    | 1 | The amount in this column reflects the annual base salary paid to the named executive officers for the 27 pay periods ending in 2015. |

  83. Summary compensation table

    | 2 | The amounts in this column reflect the grant date fair value of the PSUs and RSUs computed in accordance with FASB ASC Topic 718 based on the closing price of Verizon’s common stock on the grant date. The grant date fair value of PSUs granted to the named executive officers in the designated year as part of Verizon’s annual long-term incentive award program has been determined based on the vesting of 100% of the nominal PSUs awarded, which is the performance threshold the Company believed was most likely to be achieved under the grants on the grant date. The following table reflects the grant date fair value of these PSUs, as well as the maximum grant date fair value of these awards based on the closing price of Verizon’s common stock on the grant date if, due to the Company’s performance during the applicable performance cycle, the PSUs vested at their maximum level: |

  84. Summary compensation table

    | | Grant Date Fair Value of PSUs | | | Maximum Value of PSUs | | | | Name | 2013($) | 2014($) | 2015($) | 2013($) | 2014($) | 2015($) | | Mr. McAdam | 5,625,037 | 7,200,041 | 7,200,039 | 11,250,074 | 14,400,082 | 14,400,078 | | Mr. Shammo | 2,441,260 | 2,598,767 | 2,835,009 | 4,882,520 | 5,197,534 | 5,670,018 | | Mr. Mead | 2,835,012 | 2,992,516 | 3,150,005 | 5,670,024 | 5,985,032 | 6,300,010 | | Mr. Stratton | 2,283,759 | 2,520,026 | 2,756,297 | 4,567,518 | 5,040,052 | 5,512,594 | | Ms. Walden | N/A | N/A | 2,625,044 | N/A | N/A | 5,250,088 |

  85. Summary compensation table

    | 3 | The amounts in this column for 2015 reflect the 2015 Short-Term Plan award paid to the named executive officers in February 2016 as described beginning on page 35. |

  86. Summary compensation table

    | Verizon 2016 Proxy Statement | 47 |

  87. Summary compensation table

    Compensation Tables | Summary compensation

  88. Summary compensation table

    | 4 | The amount in this column for 2015 for Mr. Mead reflects the sum of the change in the actuarial present value of the accumulated benefit under the defined benefit plans and the above-market earnings on amounts held in nonqualified deferred compensation plans as follows: $30,718 and $288,309. Messrs. Shammo and Stratton are not eligible for pension benefits, so amounts shown in this column reflect only above-market earnings for these executives. For 2015 there was a reduction in pension value for Mr. McAdam and Ms. Walden of $87,034 and $598 respectively, based on the applicable calculation formula. In accordance with SEC rules, because the aggregate change in the actuarial present value of the accumulated benefit under the defined benefit plans was a negative number for 2015, the amounts shown in this column for 2015 for Mr. McAdam and Ms. Walden reflect only above-market earnings. Verizon’s defined benefit plans were frozen as of June 30, 2006, and Verizon stopped all future benefit accruals under these plans as of that date. All accruals under the Verizon Wireless pension plan were frozen as of December 31, 2006. |

  89. Summary compensation table

    | 5 | The following table provides the detail for 2015 compensation reported in the “All Other Compensation” column: |

  90. Summary compensation table

    | Name | Personal Use of Company Aircraft(a)($) | Personal Use of Company Vehicle(b)($) | Company Contributions to the Qualified Savings Plan ($) | Company Contributions to the Nonqualified Deferral Plan ($) | Company Contributions to the Life Insurance Benefit(c)($) | Other(d)($) | All Other Compensation Total ($) | | Mr. McAdam | 125,637 | 9,816 | 19,188 | 390,512 | 36,351 | 17,461 | 598,965 | | Mr. Shammo | 0 | 0 | 14,745 | 134,902 | 44,405 | 10,000 | 204,052 | | Mr. Mead | 0 | 0 | 19,188 | 152,074 | 49,669 | 10,000 | 230,931 | | Mr. Stratton | 0 | 0 | 19,188 | 126,007 | 39,836 | 18,879 | 203,910 | | Ms. Walden | 0 | 0 | 19,188 | 111,829 | 33,300 | 10,000 | 174,317 |

  91. Summary compensation table

    | a | The aggregate incremental cost of the personal use of a Company aircraft is determined by multiplying the total 2015 personal flight hours by the incremental aircraft cost per hour. The incremental aircraft cost per hour is derived by adding the annual aircraft maintenance costs, fuel costs, aircraft trip expenses and crew trip expenses, and then dividing by the total annual flight hours. |

  92. Summary compensation table

    | b | The aggregate incremental cost of the personal use of a Company vehicle is determined by (i) calculating the incremental vehicle cost per mile by dividing the annual lease and fuel costs by the total annual miles; (ii) multiplying the total 2015 personal miles by the incremental vehicle cost per mile; and (iii) adding the incremental driver cost (the 2015 driver hours for personal use multiplied by the driver’s hourly rate). |

  93. Summary compensation table

    | c | Executive life insurance is available to executives on a voluntary basis. Executives who choose to participate in this program are excluded from the basic and supplemental life insurance programs that Verizon provides to management employees. The executive owns the insurance policy and is responsible for paying the premiums. However, Verizon pays each executive an amount, shown in this column, which is equal to a portion of the premium. Executives who choose not to participate in the executive life insurance plan do not receive that payment. For all named executive officers, the executive life insurance policy provides a death benefit equal to two times or five times the sum of the executive’s base salary plus his or her short-term incentive opportunity at 67% of target level if the executive dies before a designated date. Messrs. McAdam, Shammo, Mead and Stratton have elected two times; Ms. Walden elected five times. For all named executive officers, this date is the latest of the participant’s retirement date, the date on which the participant reaches age 60 or the fifth anniversary of plan participation. |

  94. Summary compensation table

    | d | This column represents the total amount of other perquisites and personal benefits provided. These other benefits consist of: (i) for Mr. McAdam, reimbursement of a portion of out-of-pocket fees for a routine preventative medical examination and home security; and (ii) for Messrs. Shammo, Mead and Ms. Walden, financial planning services; and (iii) for Mr. Stratton, financial planning services and personal travel. The Company provides each of the named executive officers who elect to participate in the financial planning program with a financial planning benefit equal to the Company’s payment for the services, up to $10,000. The aggregate incremental cost of personal travel for Mr. Stratton is equal to the direct expense related to his spouse’s attendance at a business event at the request of the Company. These expenses include lodging, ground transportation, meals and other travel-related items. |

  95. Summary compensation table

    | 48 | Verizon 2016 Proxy Statement |

  96. Summary compensation table

    Compensation Tables | Plan-based awards

  97. Grants of plan-based awards

    Grants of plan-based awards

  98. Grants of plan-based awards

    | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | | | All Other Stock Awards: Number of Shares of Stock or Units(4) (#) (i) | All Other Option Awards: Number of Securities Underlying Options (#) (j) | Exercise or Base Price of Option Awards ($/Sh) (k) | Grant Date Fair Value of Stock and Option Awards(5) ($) (l) | | Name (a) | Type of Award(1) | Grant Date (b) | Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | Threshold (#) (f) | Target (#) (g) | Maximum (#) (h) | | | | | | Mr. McAdam | STP | — | 2,000,000 | 4,000,000 | 6,000,000 | | | | | | | | | | PSU | 3/6/2015 | | | | 47,712 | 149,100 | 298,200 | | | | 7,200,039 | | | RSU | 3/6/2015 | | | | | | | 99,400 | | | 4,800,026 | | Mr. Shammo | STP | — | 675,000 | 1,350,000 | 2,025,000 | | | | | | | | | | PSU | 3/6/2015 | | | | 18,787 | 58,708 | 117,416 | | | | 2,835,009 | | | RSU | 3/6/2015 | | | | | | | 39,139 | | | 1,890,022 | | Mr. Mead | STP | — | 750,000 | 1,500,000 | 2,250,000 | | | | | | | | | | PSU | 3/6/2015 | | | | 20,874 | 65,231 | 130,462 | | | | 3,150,005 | | | RSU | 3/6/2015 | | | | | | | 43,488 | | | 2,100,036 | | Mr. Stratton | STP | — | 656,250 | 1,312,500 | 1,968,750 | | | | | | | | | | PSU | 3/6/2015 | | | | 18,265 | 57,078 | 114,156 | | | | 2,756,297 | | | RSU | 3/6/2015 | | | | | | | 38,052 | | | 1,837,531 | | Ms. Walden | STP | — | 656,250 | 1,312,500 | 1,968,750 | | | | | | | | | | PSU | 3/6/2015 | | | | 17,395 | 54,360 | 108,720 | | | | 2,625,044 | | | RSU | 3/6/2015 | | | | | | | 36,240 | | | 1,750,030 |

  99. Grants of plan-based awards

    | 1 | These awards are described in the Compensation Discussion and Analysis beginning on page 35. |

  100. Grants of plan-based awards

    | 2 | The actual amount awarded in 2015 was paid in February 2016 and is shown in column (g) of the Summary Compensation Table on page 47. |

  101. Grants of plan-based awards

    | 3 | These columns reflect the potential payout range of PSU awards granted in 2015 to our named executive officers in accordance with the Company’s annual long-term incentive award program, as described beginning on page 40. At the conclusion of the three-year performance cycle, payouts can range from 0% to 200% of the target number of units awarded based on Verizon’s relative TSR position as compared with the Related Dow Peers and Verizon’s cumulative free cash flow over the three-year performance cycle as described in more detail beginning on page 42. PSUs and the applicable dividend equivalents are paid only and to the extent that the applicable performance criteria for the award are achieved at the end of the award cycle. When dividends are distributed to shareholders, dividend equivalents are credited on the PSU awards in an amount equal to the dollar amount of dividends on the total number of PSUs credited as of the dividend distribution date and divided by the fair market value of the Company’s common stock on that date. |

  102. Grants of plan-based awards

    | 4 | This column reflects the RSU awards granted in 2015 to the named executive officers in accordance with the Company’s annual long-term incentive award program. When dividends are distributed to shareholders, dividend equivalents are credited on the RSU awards in an amount equal to the dollar amount of dividends on the total number of RSUs credited as of the dividend distribution date and divided by the fair market value of the Company’s common stock on that date. |

  103. Grants of plan-based awards

    | 5 | This column reflects the grant date fair value of each equity award computed in accordance with FASB ASC Topic 718 based on the closing price of Verizon’s common stock on the grant date. For PSUs, the grant date fair value has been determined based on the vesting of 100% of the nominal PSUs awarded, which is the performance threshold the Company believed was the most likely to be achieved under the grants. |

  104. Grants of plan-based awards

    | Verizon 2016 Proxy Statement | 49 |

  105. Grants of plan-based awards

    Compensation Tables | Plan-based awards

  106. Outstanding equity awards at fiscal year-end

    Outstanding equity awards at fiscal year-end

  107. Outstanding equity awards at fiscal year-end

    | | Option Awards | | | | | Stock Awards | | | | | | Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock That Have Not Vested(1)(2)(3)(#) (g) | Market Value of Shares or Units of Stock That Have Not Vested(1)(2)(4)($) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(1)(5) (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1)(6) ($) (j) | Grant Date | | Mr. McAdam | 0 | 0 | 0 | 0 | 0 | 101,481 | 4,690,452 | 473,579 | 21,888,821 | 8/1/2011 | | | | | | | | 110,142 | 5,090,763 | 118,954 | 5,498,054 | 3/7/2014 | | | | | | | | 102,889 | 4,755,530 | 165,137 | 7,632,632 | 3/6/2015 | | Mr. Shammo | 0 | 0 | 0 | 0 | 0 | 39,755 | 1,837,476 | 42,935 | 1,984,456 | 3/7/2014 | | | | | | | | 40,513 | 1,872,511 | 65,022 | 3,005,317 | 3/6/2015 | | Mr. Mead | 0 | 0 | 0 | 0 | 0 | 45,778 | 2,115,859 | 49,440 | 2,285,117 | 3/7/2014 | | | | | | | | 45,014 | 2,080,547 | 72,247 | 3,339,256 | 3/6/2015 | | Mr. Stratton | 0 | 0 | 0 | 0 | 0 | 38,550 | 1,781,781 | 41,634 | 1,924,323 | 3/7/2014 | | | | | | | | 39,388 | 1,820,513 | 63,217 | 2,921,890 | 3/6/2015 | | Ms. Walden | 0 | 0 | 0 | 0 | 0 | 64,082 | 2,961,870 | 0 | 0 | 12/13/2012 | | | | | | | | 32,125 | 1,484,818 | 34,695 | 1,603,603 | 3/7/2014 | | | | | | | | 37,512 | 1,733,805 | 60,207 | 2,782,768 | 3/6/2015 |

  108. Outstanding equity awards at fiscal year-end

    | 1 | In 2011, Mr. McAdam received a special equity award in connection with his appointment as CEO, with 70% of the award opportunity in the form of PSUs and 30% in the form of RSUs, which may become payable after the completion of the five-year performance cycle ending July 31, 2016, provided that Mr. McAdam remains continuously employed, subject to the terms of the award agreements. The award will be settled in shares of Verizon common stock, and Mr. McAdam will be required to hold any shares he receives for at least two years following the vesting date unless he dies or becomes disabled. |

  109. Outstanding equity awards at fiscal year-end

    | 2 | In 2012, Ms. Walden received a special equity award in the form of RSUs, which may become payable after the completion of the four-year period ending December 12, 2016, provided that Ms. Walden remains continuously employed, subject to the terms of the award agreements. The award will be settled in shares of Verizon common stock. |

  110. Outstanding equity awards at fiscal year-end

    | 3 | The annual 2014 and 2015 RSU awards vest on December 31, 2016 and December 31, 2017, respectively. Mr. McAdam’s 2011 special RSU award vests on July 31, 2016. Ms. Walden’s 2012 special RSU award vests on December 12, 2016. RSUs accrue quarterly dividends that are reinvested into the participant’s account as additional RSUs and will be included in the final RSU payment if the awards vest. This column includes dividend equivalent units that have accrued through December 31, 2015. |

  111. Outstanding equity awards at fiscal year-end

    | 4 | This column represents the value of the RSU awards listed in column (g) based on a share price of $46.22, the closing price of Verizon’s common stock on December 31, 2015. |

  112. Outstanding equity awards at fiscal year-end

    | 5 | The annual 2014 and 2015 PSU awards vest on December 31, 2016 and December 31, 2017, respectively. Mr. McAdam’s 2011 special PSU award vests on July 31, 2016, with the number of PSUs that will vest determined based on Verizon’s average annual ROE during the performance cycle in accordance with the terms of the award agreement. PSUs accrue quarterly dividends that are reinvested into the participant’s account as additional PSUs. PSUs and the applicable dividend equivalents are paid if and to the extent that the applicable PSU award vests. As required by SEC rules, the number of units in this column represents the 2014 PSU awards at a 72% vesting percentage, the 2015 PSU awards at a 107% vesting percentage, and Mr. McAdam’s 2011 special PSU Award at a 200% vesting percentage, in each case including accrued dividend equivalents through December 31, 2015 that will be paid to the executives if the awards vest at the indicated levels. |

  113. Outstanding equity awards at fiscal year-end

    | 6 | This column represents the value of the PSU awards listed in column (i) based on a share price of $46.22, the closing price of Verizon’s common stock on December 31, 2015. |

  114. Outstanding equity awards at fiscal year-end

    | 50 | Verizon 2016 Proxy Statement |

  115. Outstanding equity awards at fiscal year-end

    Compensation Tables | Value realized from stock options and certain stock-based awards

  116. Option exercises and stock vested

    Option exercises and stock vested

  117. Option exercises and stock vested

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting(1)(#) | Value Realized on Vesting(1)(2)($) | | (a) | (b) | (c) | (d) | (e) | | Mr. McAdam | 0 | 0 | 172,139 | 7,956,245 | | Mr. Shammo | 0 | 0 | 74,708 | 3,453,012 | | Mr. Mead | 0 | 0 | 86,757 | 4,009,929 | | Mr. Stratton | 0 | 0 | 69,889 | 3,230,255 | | Ms. Walden | 0 | 0 | 47,282 | 2,185,358 |

  118. Option exercises and stock vested

    | 1 | The amounts include dividend equivalents that were credited on the PSU and RSU awards that vested on December 31, 2015 in accordance with the terms of the awards. The amounts in this column represent the number of shares acquired on vesting multiplied by $46.22, the closing price of Verizon’s common stock on December 31, 2015. |

  119. Option exercises and stock vested

    | 2 | The amounts in this column include $1,603,972 for Mr. Mead that was deferred under the Verizon Executive Deferral Plan in 2016 when the amounts would have otherwise been paid. |

  120. Pension benefits

    Pension benefits

  121. Pension benefits

    | Name (a) | Plan Name (b) | Number of Years Credited Service (#) (c) | Present Value of Accumulated Benefit(1)($) (d) | Payments During Last Fiscal Year ($) (e) | | Mr. McAdam | Verizon Wireless Retirement Plan—Qualified | 32 | 1,060,783 | 0 | | | Verizon Wireless Retirement Plan—Nonqualified | 10(2) | 1,594,476 | 0 | | Mr. Mead | Verizon Management Pension Plan—Qualified | 37 | 1,176,715 | 0 | | | Verizon Excess Pension Plan—Nonqualified | 10(2) | 3,509,633 | 0 | | Ms. Walden | Verizon Wireless Retirement Plan—Qualified | 15(2) | 23,118 | 0 |

  122. Pension benefits

    | 1 | The values are based on the assumptions for the actuarial determination of pension benefits as required by the relevant accounting standards as described in note 11 to the Company’s consolidated financial statements for the year ended December 31, 2015, as included in the Company’s 2015 Annual Report to Shareholders. However, in accordance with the requirements for this table, the values are calculated using the executive’s retirement at the earliest age at which he or she can retire without having the retirement benefit reduced under the plan. |

  123. Pension benefits

    | 2 | The years of credited service for each of Messrs. McAdam and Mead and Ms. Walden with respect to the applicable plan is less than the named executive officer’s number of actual years of service with the Company. For Mr. McAdam, the 10 years of credited service represents the period over which he earned a benefit in the nonqualified portion of the Verizon Wireless Pension Plan. For Mr. Mead, the 10 years of credited service represents the period over which he earned a benefit in the Verizon Excess Pension Plan. Ms. Walden does not have a benefit in the nonqualified plan. |

  124. Nonqualified deferred compensation

    Nonqualified deferred compensation

  125. Nonqualified deferred compensation

    | Name (a) | | Executive Contributions in Last FY(1)($) (b) | Registrant Contributions in Last FY(2)($) (c) | Aggregate Earnings in Last FY(3)($) (d) | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate Balance at Last FYE(4)($) (f) | | Mr. McAdam | Verizon Executive Deferral Plan | 308,826 | 390,512 | 268,955 | 0 | 7,779,203 | | | Verizon Wireless Executive Savings Plan | 0 | 0 | 100,513 | 0 | 2,379,491 | | Mr. Shammo | Verizon Executive Deferral Plan | 108,605 | 134,902 | 149,394 | 0 | 4,364,409 | | | Verizon Wireless Executive Savings Plan | 0 | 0 | 51,427 | 0 | 1,401,686 | | Mr. Mead | Verizon Executive Deferral Plan | 424,254 | 152,074 | 975,384 | 0 | 24,189,869 | | | Verizon Income Deferral Plan | 0 | 0 | 13,364 | 0 | 316,383 | | | Verizon Wireless Executive Savings Plan | 0 | 0 | 67,541 | 0 | 1,635,817 | | Mr. Stratton | Verizon Executive Deferral Plan | 498,296 | 126,007 | 123,080 | 237,105 | 7,659,063 | | | Verizon Wireless Executive Savings Plan | 0 | 0 | 140,564 | 0 | 3,797,047 | | Ms. Walden | Verizon Executive Deferral Plan | 96,415 | 111,829 | 216,787 | 0 | 5,938,939 | | | Verizon Wireless Executive Savings Plan | 0 | 0 | 555 | 0 | 13,148 |

  126. Nonqualified deferred compensation

    | 1 | Of the amounts listed in this column, the following amounts are also included in the Summary Compensation Table in columns (c) and (j): for Mr. McAdam, $80,826; for Mr. Shammo, $38,067; for Mr. Mead, $44,308; for Mr. Stratton, $213,296; and for Ms. Walden, $36,565. |

  127. Nonqualified deferred compensation

    | 2 | The amounts listed in this column are also included in columns (i) and (j) of the Summary Compensation Table. |

  128. Nonqualified deferred compensation

    | 3 | Of the amounts listed in this column, the following amounts are also included in the Summary Compensation Table in columns (h) and (j): for Mr. McAdam, $83,092; for Mr. Shammo, $41,566; for Mr. Mead, $288,309; for Mr. Stratton, $52,841; and for Ms. Walden, $44,907. |

  129. Nonqualified deferred compensation

    | 4 | The aggregate amounts shown in columns (e) and (f) include the following amounts that were reported as compensation to the named executive officer in the Summary Compensation Table in previous proxy statements of the registrant: |

  130. Nonqualified deferred compensation

    | • | For Mr. McAdam, a total of $4,063,022 was reported (2008 to 2015); |

  131. Nonqualified deferred compensation

    | • | For Mr. Shammo, a total of $831,582 was reported (2011 to 2015); |

  132. Nonqualified deferred compensation

    | • | For Mr. Mead, a total of $2,353,494 was reported (2011 to 2015); and |

  133. Nonqualified deferred compensation

    | • | For Mr. Stratton, a total of $1,563,387 was reported (2013 to 2015). |

  134. Potential payments upon termination or change in control

    Potential payments upon termination or change in control The following summaries and tables describe and quantify the potential payments and benefits that would be provided to each of our named executive officers if a termination of employment or change in control of Verizon had occurred at the end of 2015 under Verizon’s compensation plans and agreements.

  135. Potential payments upon qualifying separation or involuntary termination without cause

    Potential payments upon qualifying separation or involuntary termination without cause Mr. McAdam. As Chairman and CEO, Mr. McAdam is not eligible to participate in the Senior Manager Severance Plan described below. Mr. McAdam is also not a party to an employment agreement with Verizon or any other agreement that would provide him with cash severance benefits in the event his employment is involuntarily terminated by Verizon without cause. Senior Manager Severance Plan. Verizon provides severance benefits to certain employees, including all of the named executive officers other than the Chairman and CEO, under the Senior Manager Severance Plan. Under the plan, a named executive officer is eligible to receive severance benefits if he or she experiences a “qualifying separation” from Verizon, which is generally defined as an involuntary termination by Verizon without cause, a voluntary termination by the executive solely due to the executive’s refusal to accept a qualifying reclassification or relocation (as those terms are defined in the plan) or a determination by the independent members of the Board that the named executive officer has incurred a qualifying separation. A severance benefit, if triggered, is payable to an executive only if the executive executes a release of claims against Verizon in the form satisfactory to Verizon and agrees not to compete or interfere with any Verizon business for a period of one year after termination from employment and always to protect Verizon’s trade secrets and proprietary information. If a named executive officer incurs a qualifying separation under the plan, he or she is eligible to receive the following benefits: (i) a lump-sum cash separation payment equal to two times the sum of his or her base salary and target short-term incentive opportunity; and (ii) continued medical, dental and vision coverage for two years. In addition, if the executive’s qualifying separation occurs prior to the last day of the year, the executive will receive a prorated Short-Term Plan award for the year in which the separation occurs, determined based on the actual level of achievement of the performance criteria under the Short-Term Plan for the applicable year and payable at the time that awards are payable to participating employees generally under the plan. To the extent that an executive also becomes eligible for severance benefits under any outstanding agreement, plan or any other arrangement, the executive’s cash severance payment under the Senior Manager Severance Plan will be reduced on a dollar-for-dollar basis by the amount of the severance benefits payable to the executive under such other agreement, plan or arrangement. Other benefits. Upon an involuntary termination of employment without cause, a named executive officer would also be eligible to receive financial planning and outplacement services for one year following termination on the same basis as provided to other senior executives. However, executives will only be entitled to receive financial planning services if they participate in the program in the year in which their employment terminates. Mr. McAdam did not participate in the financial planning program in 2015 and, as a result, would not have been entitled to receive financial planning services if his employment had terminated on the last business day of 2015. In addition, under the terms of the executive life insurance plan, each named executive officer who is retirement eligible upon termination and who continues to pay the annual premiums on the life insurance policy owned by the executive would be eligible to receive an annual payment from Verizon to pay a portion of the annual premium until

  136. Potential payments upon qualifying separation or involuntary termination without cause

    | 56 | Verizon 2016 Proxy Statement |

  137. Potential payments upon qualifying separation or involuntary termination without cause

    the latest of the executive’s attainment of age 60 or the completion of 5 years of plan participation. Retirement eligibility is generally defined as having attained 75 points (age plus years of service) with at least 15 years of service. If the named executive officer is not retirement eligible upon termination and has not reached plan maturity (age 60 and 5 years of plan participation) upon termination, the executive would be eligible to receive one additional annual payment to pay a portion of the annual premium for the year following the year in which the executive’s termination occurs. Messrs. McAdam and Mead attained plan maturity on December 31, 2014 and December 31, 2013, respectively, and they are not entitled to receive any additional payments from Verizon with respect to this benefit following their termination of employment. Estimated payments. The following table shows Verizon’s estimate of the amount of benefits the named executive officers would have been entitled to receive had their employment been involuntarily terminated without cause or terminated for good reason on the last business day of 2015 or had incurred a qualifying separation under the Senior Manager Severance Plan.

  138. Potential payments upon qualifying separation or involuntary termination without cause

    | Name | Cash Separation Payment ($) | Continued Health Benefits(1)($) | Outplacement Services ($) | Financial Planning(2)($) | Executive Life Insurance Benefit(3)($) | | Mr. McAdam | 0 | 0 | 0 | 0 | 0 | | Mr. Shammo | 4,500,000 | 39,152 | 14,500 | 10,000 | 177,862 | | Mr. Mead | 5,000,000 | 26,068 | 14,500 | 10,000 | 0 | | Mr. Stratton | 4,375,000 | 26,068 | 14,500 | 10,000 | 195,875 | | Ms. Walden | 4,375,000 | 41,655 | 14,500 | 10,000 | 17,453 |

  139. Potential payments upon qualifying separation or involuntary termination without cause

    | 1 | The amounts reflect Verizon’s estimated cost of providing medical, dental and vision coverage for two years. |

  140. Potential payments upon qualifying separation or involuntary termination without cause

    | 2 | Mr. McAdam did not participate in the financial planning program in 2015 and, as a result, would not have been entitled to receive financial planning services if his employment had terminated on the last business day of 2015. |

  141. Potential payments upon qualifying separation or involuntary termination without cause

    | 3 | If Messrs. McAdam or Mead had retired on December 31, 2015, they would not have been entitled to receive additional company contributions with respect to this benefit because Mr. McAdam reached plan maturity on December 31, 2014 and Mr. Mead reached plan maturity on December 31, 2013. |

  142. Potential payments upon death, disability or retirement

    Potential payments upon death, disability or retirement Under the terms of the executive life insurance plan, in the event of disability or a qualifying retirement, a named executive officer who continues to pay the annual premiums on the life insurance policy owned by the executive would be eligible to receive an annual payment from Verizon to pay a portion of the annual premium until the latest of the executive’s attainment of age 60 or the completion of 5 years of plan participation. Messrs. McAdam and Mead attained plan maturity on December 31, 2014 and December 31, 2013, respectively, and they are therefore not eligible to receive any additional payments from Verizon with respect to this benefit upon their termination of employment. If the named executive officer dies, his or her beneficiary would be entitled to receive the proceeds of the life insurance policy owned by the executive, payable by the third-party issuer of the policy. Under the Short-Term Plan, if the named executive officer’s employment terminates due to death, disability or a qualifying retirement prior to the last day of the year, the executive would be eligible for a prorated Short-Term Plan award for the year in which the termination date occurred, determined based on the actual level of achievement of the performance criteria under the Short-Term Plan for the applicable year and payable at the time that awards are generally payable to participating employees under the plan. As described above, if the executive’s employment terminates on the last day of the year for any reason other than for cause, the full amount of the Short-Term Plan award, determined based on the actual level of achievement of the performance criteria under the Short-Term Plan for the applicable year, would have been payable. In addition, upon death, disability or a qualifying retirement, each named executive officer would also be eligible to receive financial planning services for one year following termination on the same basis as

  143. Potential payments upon death, disability or retirement

    | Verizon 2016 Proxy Statement | 57 |

  144. Potential payments upon death, disability or retirement

    provided to other senior executives, provided that the executive participated in the program in the year in which his or her employment terminates. Upon disability, the named executive officers would also be eligible for disability benefits under the tax-qualified and nonqualified disability plans. Estimated payments. The following table shows Verizon’s estimate of the amount of benefits the named executive officers would have been entitled to receive had their employment terminated due to death, disability or qualifying retirement on the last business day of 2015.

  145. Potential payments upon death, disability or retirement

    | Name | Executive Life Insurance Benefit(1)($) | Disability Benefit(2)($) | Financial Planning(3)($) | | Mr. McAdam | | | | | Death | 3,200,000 | 0 | 0 | | Disability | 0 | 1,122,018 | 0 | | Retirement | 0 | 0 | 0 | | Mr. Shammo | | | | | Death | 3,610,000 | 0 | 10,000 | | Disability | 177,862 | 431,242 | 10,000 | | Retirement | 177,862 | 0 | 10,000 | | Mr. Mead | | | | | Death | 2,000,000 | 0 | 10,000 | | Disability | 0 | 1,019,484 | 10,000 | | Retirement | 0 | 0 | 10,000 | | Mr. Stratton | | | | | Death | 3,510,000 | 0 | 10,000 | | Disability | 195,875 | 435,210 | 10,000 | | Retirement | 195,875 | 0 | 10,000 | | Ms. Walden | | | | | Death | 8,775,000 | 0 | 10,000 | | Disability | 401,107 | 2,129,270 | 10,000 | | Retirement(4) | 0 | 0 | 0 |

  146. Potential payments upon death, disability or retirement

    | 1 | In the event of death, the amount represents the proceeds from the life insurance policy owned by the named executive officer, payable from the third-party issuer of the policy. In the event of disability or retirement, the amount, if any, represents the total amount of annual payments to the named executive officer to pay a portion of the annual premium of the life insurance policy owned by him, provided that the named executive officer continues to pay the annual premiums pursuant to the terms of the executive life insurance program. If Messrs. McAdam or Mead had retired on December 31, 2015, they would not have been entitled to receive additional company contributions with respect to this benefit because Mr. McAdam reached plan maturity on December 31, 2014 and Mr. Mead reached plan maturity on December 31, 2013. |

  147. Potential payments upon death, disability or retirement

    | 2 | Assumes that each named executive officer would be immediately eligible for long-term disability benefits from Verizon’s qualified and nonqualified disability benefit plans. Messrs. Shammo and Stratton do not participate in the nonqualified portion of the disability benefit. The assumptions used to calculate the value of the disability benefits include a discount rate of 4.6% and mortality and recovery based on the 1987 National Association of Insurance Commissioners Group Disability Table. These rates represent the probability of death or recovery between the date of disability and the payment end date. The qualified portion of the disability benefit for Messrs. McAdam, Shammo, Mead, Stratton and Ms. Walden is estimated at $398,997, $431,242, $362,535, $435,210 and $768,726, respectively, and the nonqualified portion of the disability benefit for Messrs. McAdam, Mead and Ms. Walden is estimated at $723,021, $656,949 and $1,360,544, respectively. In order to receive the nonqualified portion of the disability benefit, the executive must pay the premium associated with the qualified portion of the benefit. |

  148. Potential payments upon death, disability or retirement

    | 3 | Mr. McAdam did not participate in the financial planning program in 2015 and, as a result, would not have been entitled to receive financial planning services if his employment had terminated on the last business day of 2015. |

  149. Potential payments upon death, disability or retirement

    | 4 | Ms. Walden would not have been entitled to receive executive life insurance benefits or financial planning benefits because she had not fulfilled the eligibility requirements for retirement under the terms of those programs on the last business day of 2015. |

  150. Potential payments upon change in control

    Potential payments upon change in control Verizon does not maintain any plans or arrangements that provide for any named executive officer to receive cash severance or any other cash payments in connection with a change in control of Verizon. If the named executive officer’s employment terminates in connection with or following a change in control, he or she would be eligible for the same benefits, if any, that would become payable to the executive

  151. Potential payments upon change in control

    | 58 | Verizon 2016 Proxy Statement |

  152. Potential payments upon change in control

    upon his or her termination under the circumstances as described above. Under the Short-Term Plan, if a change in control occurs, all outstanding awards will vest and become payable on the regularly scheduled payment date.

  153. Non-employee director compensation

    Non-employee director compensation In 2015, each non-employee Director of Verizon received an annual cash retainer of $100,000. The Chairs of the Corporate Governance and Policy Committee and Finance Committee received an additional annual cash retainer of $15,000, and the Chairs of the Audit Committee and Human Resources Committee, as well as the Lead Director, each received an additional annual cash retainer of $25,000. In 2015, each non-employee Director also received a grant of Verizon share equivalents valued at $150,000 on the grant date. No meeting fees were paid if a non-employee Director attended a Board or Committee meeting on the day before or the day of a regularly scheduled Board meeting. Each non-employee Director who attended such a meeting held on any other date received a meeting fee of $2,000. Each non-employee Director who joins our Board receives a one-time grant of 3,000 Verizon share equivalents valued at the closing price on the date the new Director joins our Board. All share equivalents that non-employee Directors receive are automatically credited to the Director’s deferred compensation account under the Verizon Executive Deferral Plan and invested in a hypothetical Verizon stock fund. Amounts in a Director’s deferred compensation account are paid in a lump sum in the year following the year the Director leaves our Board. Under the Verizon Executive Deferral Plan, non-employee Directors may defer all or part of their annual cash retainer and meeting fees. A non-employee Director may elect to invest these amounts in a hypothetical cash account that earns a return rate equal to the long-term, high-grade corporate bond yield average as published by Moody’s Investor Services, or in the other hypothetical investment options available to participants in Verizon’s Management Savings Plan.

  154. Non-employee director compensation

    | 60 | Verizon 2016 Proxy Statement |

  155. Compensation Tables | Non-employee director compensation

    Compensation Tables | Non-employee director compensation One of our non-employee Directors who served as a director of a predecessor company is a participant in a charitable giving program. Under this program, when a participant retires from the Board or attains age 65 (whichever occurs later) or dies, Verizon will make one or more charitable contributions in the aggregate amount of $1,000,000, payable in ten annual installments. This program, which is closed to future participants, is financed through the purchase of insurance on the life of each participant. In 2015, the aggregate cost of maintaining and administering this program for the participant was $15,000. The non-employee Directors are eligible to participate in the Verizon Foundation Matching Gifts Program. Under this program, which is open to all Verizon employees, the Foundation matches up to $5,000 per year of charitable contributions to accredited colleges and universities, $1,000 per year of charitable contributions to any non-profit with 501(c)(3) status, and $1,000 per year of charitable donations to designated disaster relief campaigns.

  156. Director compensation

    Director compensation

  157. Director compensation

    | Name (a) | Fees Earned or Paid in Cash(2)($) (b) | Stock Awards(3)($) (c) | Option Awards ($) (d) | Non-Equity Incentive Plan Compensation ($) (e) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(4)($) (f) | All Other Compensation(5)($) (g) | Total ($) (h) | | Shellye Archambeau | 112,000 | 150,000 | 0 | 0 | 2,544 | 0 | 264,544 | | Mark Bertolini | 97,667 | 281,080 | 0 | 0 | 0 | 0 | 378,747 | | Richard Carrión* | 123,000 | 150,000 | 0 | 0 | 8,444 | 0 | 281,444 | | Melanie Healey | 106,000 | 150,000 | 0 | 0 | 0 | 5,000 | 261,000 | | M. Frances Keeth* | 154,000 | 150,000 | 0 | 0 | 0 | 5,000 | 309,000 | | Karl-Ludwig Kley | 16,667 | 163,600 | 0 | 0 | 0 | 0 | 180,267 | | Robert Lane (1) | 45,667 | 150,000 | 0 | 0 | 5,102 | 0 | 200,768 | | Donald Nicolaisen* | 135,000 | 150,000 | 0 | 0 | 0 | 0 | 285,000 | | Clarence Otis, Jr.* | 139,000 | 150,000 | 0 | 0 | 16,164 | 0 | 305,164 | | Rodney Slater | 104,000 | 150,000 | 0 | 0 | 0 | 0 | 254,000 | | Kathryn Tesija | 110,000 | 150,000 | 0 | 0 | 4,364 | 0 | 264,364 | | Gregory Wasson | 112,000 | 150,000 | 0 | 0 | 0 | 5,000 | 267,000 | | Gregory Weaver | 35,333 | 187,160 | 0 | 0 | 0 | 0 | 222,493 |

  158. Director compensation

    | * Denotes a chair of a standing committee during 2015. |

  159. Director compensation

    | 1 | Mr. Lane served as a Director until May 7, 2015 when he did not stand for reelection at the 2015 Annual Meeting of Shareholders. |

  160. Director compensation

    | 2 | This column includes all fees earned in 2015, whether the fee was paid in 2015 or deferred. |

  161. Director compensation

    | 3 | For each non-employee Director, this column reflects the grant date fair value of the non-employee Director’s 2015 annual stock award computed in accordance with FASB ASC Topic 718. The following reflects the aggregate number of share equivalent awards outstanding as of December 31, 2015 for each person who served as a non-employee Director during 2015: Shellye Archambeau, 10,218; Mark Bertolini, 6,053, Richard Carrión, 105,543; Melanie Healey, 18,702; M. Frances Keeth, 48,676; Karl-Ludwig Kley, 3,541; Robert Lane, 60,256; Donald Nicolaisen, 56,572; Clarence Otis, Jr., 55,893; Rodney Slater, 28,686; Kathryn Tesija, 13,930; Gregory Wasson, 13,060; and Gregory Weaver, 4,143. |

  162. Director compensation

    | 4 | This column reflects above-market earnings on nonqualified deferred compensation plans. Non-employee Directors do not participate in any defined benefit pension plan. |

  163. Director compensation

    | 5 | This column reflects matching contributions made on the non-employee Directors’ behalf under the Verizon Foundation Matching Gift Program. |

  164. Director compensation

    | Verizon 2016 Proxy Statement | 61 |

  165. Directors and Executive Officers

    Directors and Executive Officers The following table shows the number of shares of Verizon common stock beneficially owned by each of the named executive officers, each Director, and all executive officers and Directors as a group as of January 29, 2016. This information includes shares held in Verizon’s employee savings plans and shares that may be acquired within 60 days upon the conversion of certain stock units under deferred compensation plans and/or stock-based long-term incentive awards. The aggregate number of shares owned by executive officers and Directors represents less than one percent of the total number of outstanding shares of Verizon common stock. Unless we indicate otherwise, each individual has sole voting and/or investment power with respect to the shares. Executive officers and Directors also have interests in other stock-based units under Verizon deferred compensation plans and stock-based long-term incentive awards. We have included these interests in the “Total Stock-Based Holdings” column in the table below to show the total economic interest that the executive officers and Directors have in Verizon common stock.

  166. Directors and Executive Officers

    | Name | Stock(1)(2) | Total stock- based holdings(3) | | Named Executive Officers | | | | Lowell McAdam* | 404,211 | 1,488,590 | | Francis Shammo | 128,858 | 412,418 | | Daniel Mead | 26,925 | 408,255 | | John Stratton | 92,342 | 394,256 | | Marni Walden | 39,065 | 363,743 | | Directors | | | | Shellye Archambeau | — | 10,218 | | Mark Bertolini | — | 6,053 | | Richard Carrión | 4,785 | 106,836 | | Melanie Healey | — | 18,702 | | M. Frances Keeth | — | 48,676 | | Karl-Ludwig Kley | — | 3,541 | | Robert Lane** | — | — | | Donald Nicolaisen | — | 56,572 | | Clarence Otis, Jr. | 3,000 | 58,893 | | Rodney Slater | — | 28,686 | | Kathryn Tesija | — | 13,930 | | Gregory Wasson | — | 13,060 | | Gregory Weaver | — | 4,143 | | All of the above and other executive officers as a group(4) | 867,741 | 3,977,782 |

  167. Directors and Executive Officers

    | Verizon 2016 Proxy Statement | 63 |

  168. Directors and Executive Officers

    Security Ownership of Certain Beneficial Owners and Management | Directors and Executive Officers

  169. Directors and Executive Officers

    | * Mr. McAdam also serves as a Director. |

  170. Directors and Executive Officers

    | ** Mr. Lane served as a Director until May 7, 2015 when he did not stand for reelection at the 2015 Annual Meeting of Shareholders. |

  171. Directors and Executive Officers

    | 1 | In addition to direct and indirect holdings, the “Stock” column includes shares that may be acquired within 60 days pursuant to the conversion of RSUs granted in 2013 as follows: 88,209 shares for Mr. McAdam; 38,283 shares for Mr. Shammo; 26,674 shares for Mr. Mead; 35,813 shares for Mr. Stratton; and 24,229 shares for Ms. Walden. The “Stock” column also includes shares that may be acquired within 60 days pursuant to the conversion of certain stock units under deferred compensation plans as follows: 3,492 shares for Mr. Carrión. Prior to conversion, the shares underlying the RSUs and deferred compensation units may not be voted or transferred. No shares are pledged as security. |

  172. Directors and Executive Officers

    | 2 | Mr. Shammo’s holdings include 923 shares held by his spouse with whom he shares voting and/or investment power. Ms. Walden’s holdings include 14,210 shares held by a trust with which she shares voting and/or investment power. |

  173. Directors and Executive Officers

    | 3 | The “Total Stock-Based Holdings” column includes, in addition to shares listed in the “Stock” column, stock-based units under deferred compensation plans and stock-based long-term incentive awards, which may not be voted or transferred. |

  174. Directors and Executive Officers

    | 4 | Does not include shares held by Mr. Lane, who served as a Director until May 7, 2015, or Mr. Mead, who ceased to be an executive officer on December 31, 2015. |