Hello, and welcome to Verizon's 2020 Annual Meeting of Shareholders. It is my pleasure to turn today's meeting over to Hans Wetzberg, Chairman and Chief Executive Officer of Verizon. Mr. Wetzberg, the floor is yours.
Thank you very much, and good afternoon. Dear shareholders, welcome to the Verizon 2020 Annual Meeting of Shareholders. This year's annual meeting is run-in a virtual format in order to protect employees, shareholders and communities from the pandemic that is spreading across the globe and here in the United States. We have the distinguished members of the Verizon Board of Directors in attendance in this call. I'll now call this meeting to order.
Let me start by talking a little bit about the progress we have done and what we're working with in Verizon. Shortly after I took over as the CEO of 2018, we embarked on a journey called Verizon 2.0. The whole idea was to do an already great company, even stronger and better and continue to be the leader in the market as well as creating great shareholder value. We define the Verizon 2.0 in 3 buckets: 1, what we wanted to preserve and strengthen and transform, taking with us all the greatness that Verizon has created during decades, but also thinking about the future, how we wanted to improve. It led us to 5 distinct transformations.
The first one was the network, which is the core of our strategy. We built or are building the intelligent edge network, which is actually giving not only new services, but also new applications for our customers as well as more efficiency. During this transformation, we have continued to have the leading network by all measurements by 3rd parties. And I'm encouraged about my team continuing to have the lead when it comes to network technology in the market. The second thing we want to transform was our brand.
We wanted to unify the brand across all the different products and services we have in the company. And we decided our brand value should be trust and innovation. And our team has worked on that relentlessly the last one and a half years to see that we have one way of showing up externally. The third thing we want to do, transform what the processes that we have in the company to be even more efficient. One of the things we did was changing the capital allocation process.
We also had a voluntary program where 10,400 of our employees decided to leave the company. But that also created for us a new way of working and actually seeing that we being more efficient. The 4th area was around cultural leadership. We created a new cultural operating system where the core values, the brand values, the leadership philosophies and our purpose is the core of the new system. We created the new purpose that reads, we create the networks that move the world forward, which is connecting everything we're doing from the network, connecting and connecting people and connecting customers.
And the 5th area we transformed was our go to market. We defined 3 customer facing groups, Verizon Consumer Group, Verizon Business Group and Verizon Media Group. We did that in order to meet the future customer demands in the world of 5 gs. And speaking about 5 gs, the last years, we have done a lot in 5 gs. And what we're trying to do is unlocking the value of 5 gs as a differentiator for our customers.
We have defined 3 different business propositions on 5 gs. The 5 gs mobility, which is basically when you have a smartphone or any other device that you move around with. We have already launched 34 cities and a lot of public spaces and stadiums with our ultra wideband 5 gs. The second one is the 5 gs home, which is a way for us to support our customers in residential customer with 5 gs into the home instead of having other means of connecting them to their homes or to small and medium businesses. And the third one is 5 gs Mobile Edge Compute, which is bringing the cloud business to the edge of the network together with mobility.
That's what we are doing together in partnership with Amazon. All these three businesses were basically leading in the world or bringing them to the market. And I'm very proud of my team for what they have done the last few years. So we're not trying to build some incremental 5 gs. We're doing a transformative 5 gs where we're going to bring all the new capabilities that 5 gs is promising.
We call them the 8 currencies. And during 2019, we made a lot of progress on all these transformations, including the 5 gs. And that was a year when we actually in 2019, when we had one of our best years financially ever as well. So I can only say I'm very proud of my team how they have been able to embrace Verizon 2.0. Rolling out 5 gs, at the same time continue to perform a strong financial performance in the company.
At the heart of all of this is, of course, the network. It's a central piece of our strategy, network as a service. And it's always been extremely important for the communities and our customers, but probably even more important in today's world, which brings me to the current situation, the COVID-nineteen, the pandemic that is spreading all around the world. We need to understand this is an unprecedented crisis, which requires unprecedented actions. In my words, I've been part of the banking crisis, the telecom crisis, but this is something totally different.
This is a health crisis that impacts each and every one on this globe. And it's a really, really tough situation. What we did immediately when the crisis started, we aligned on one mission. 1st of all, to protect the health and safety of our employees and secondly, keep our networks in performing at the best because so many people, so many organizations, so many customers are relying on what Verizon is delivering every day. During this time, our action has been balanced and decisive, always keeping in mind a positive long term impact for our 4 stakeholders, employees, shareholders, customer and society.
We have that set up as an emergency operations center to see that we take the right decision every day. So let me just quickly tell you what we have been doing in a different stakeholders. First of all, on the employee side, we have worked a lot with our frontline employees that are doing heroic work every day to see that we are delivering on our network, improving and maintaining the network, but also our employees in the stores that are serving critical infrastructure for our customers. Here, we have all the time been thinking about the health and safety, how we can continue to carry out this very critical work. For the rest of the organization, we have moved home 120,000 employees working from home in less than 2 weeks.
Today, we have also retrained some 20,000 of those employees working with different work tasks than what they had before, which is an astonishing work of the organization. And today, the majority of our employees is working from home. On the customer side, where we have some 130,000,000 customers, which depend on us every day for the network, we have seen a network usage that we have never seen before. Today or any given day, we would see almost 800,000,000 calls, which is twice the amount of the Mother's Day. We would have 9,000,000,000 texts every day, messages, which is more than what we would have on the New Year's Eve.
That we have on every day. So we're on peak every day in the network. More impressive is the growth of collaboration tool, video conferencing and chat functions, etcetera, which has grown 1200% since the start of the pandemic. And gaming has grown over 100% and all other online services has also grown. Now when over several weeks months into the pandemic, we have seen that the week over week increases have been leveling off.
And now this is we have established on this level. I can tell you with a lot of promise that our network so far is carried out with no challenges, has performed extremely well in this crisis. And we are very happy that we can serve our customers in this very tough situation. This is, of course, based on a long term investment plan in the network. You cannot fix it during a crisis.
And we have built the network with resilience and a lot of thoughts about performance. And our commitment to capacity has always been there. If we talk about our customers, which are, of course, sensitive in this situation, we have really tried to support the customers that are the most vulnerable in this situation and impacted by COVID-nineteen. We have increased 15 gig of our 4 gs LTE data to the consumers that doesn't have an unlimited plan. We have also waived late fees for customers and residential consumers and small and medium businesses that cannot pay or they have late fees.
We're waiving that because we think that if there's something important these times is to be connected. One of the highest priorities we have had during this pandemic is, of course, to support the emergency personnel and the public safety officials. We have done a lot of things working with them, seeing that they have data all the time, but also we have deployed emergency service centers around the country and help them to set them up with Wi Fi cells, mobile cell sites, charging station and a lot of other things. On the society side, we have also done a lot of commitments and we think that it's our responsibility in times of this crisis to be very supportive of society. Our employees are doing virtual volunteerism, supporting different organization in order to see that we are actually reaching out and being a good hand in this crisis.
We have on our virtual innovative learning system that we have in several 100 schools, increased the data for them, but also we have made New York Times available to 40,000,000 high school students across the country. We have also instituted something called Pay It Forward, which is really to support the small and medium businesses and seeing that they actually can survive during this pandemic. All in all, we have donated USD 55,000,000 during the crisis so far. As you can hear, I'm proud to lead Verizon, and I thank the shareholders for the confidence and support in our company. And I would like to introduce Bill Horton, Verizon's Senior Vice President, Deputy General Counsel and Corporate Secretary, who will conduct this conduct the official business portion of the meeting.
Bill?
Thank you, Hans. Good afternoon, everyone. Also in attendance today are Andrew Vrygian from Ernst and Young, our independent registered public accounting firm and our independent inspectors of election, Carl Hagberg and Ray Riley. As a reminder, shareholders were able to submit questions in advance and may continue to do so during the meeting by clicking on the messages icon. I call your attention to the rules of conduct set forth for this meeting.
These are available by clicking on the rules of conduct link on your screen. Questions and comments will be addressed if appropriate and time permitting following the presentation of all of the shareholder proposals and management proposals. Verizon began mailing its proxy materials on March 23rd and we have a quorum present. We received proxies representing approximately 3,500,000,000 shares or 85.5 percent of the shares entitled to vote. I declare that the polls are open as of 1 o'clock p.
M. If you've already voted, thank you. If not, or if you'd like to change your vote, you may do so now by clicking the cast your link vote. I'm sorry, cast your vote link. Now we will turn to the proposals in the order they are listed in the proxy statement.
I will present the 3 management proposals and then ask each proponent who is present to introduce his or her proposal. If other shareholders would like to comment or submit a question on a proposal, you may do so by clicking on the messages icon. I'd like to point out that the voting results we announced today are not final. We will announce the final results after all of the votes received at this meeting today have been tallied and those results have been certified by the independent inspectors. The final results will be reported in a Form 8 ks that we filed with the Securities and Exchange Commission next week and will also be posted on our website.
There are 3 management proposals on the ballot. These first three proposals are the election of directors, an advisory vote on Verizon's executive compensation and the ratification of Ernst and Young as the company's independent accounting firm. We'll now consider the shareholder proposals. The Association of BellTel Retirees submitted the proposal listed as item 4 on the proxy card. That proposal requested the company adopt a policy prohibiting the payment of above market earnings on non qualified savings plan earnings as senior executives.
Mr. Jack Cohen will be presenting this proposal. Operator, please open Mr. Cohen's line.
Mr. Cohen, your line is open.
Thank you. Mr. Vestberg, Mr. Horton, members of the Board and fellow shareholders, my name is Jack Cohen. I'm now speaking in support of shareholder proxy proposal item number 4 of the proposal that would prohibit the practice of paying to senior executive officers above market earnings on tax on non tax qualified retirement savings or deferred income account balances.
I'm also the Chairman of the Board of Directors of the Association of BellTel Retirees, the sponsor of this proposal. To be clear, the intent of the proposal is to prohibit the practice only as it relates to above market earnings. Due to time limitations for details, I refer you to the text within the proxy statement. Relevant is the fact that this proposal has ISS endorsement. Senior executives have the qualified plan available to all employees as well as the much more lucrative non qualified plan.
Non qualified plan has no contribution limit subject to matching and thus is extremely lucrative. An example is former CEO, Lowell McAdam. The proxy statement of 2018 showed a grand total for the year to $418,000 in matching compensation. The lion's share made up of $325,000 to his executive deferral plan and $74,000 in above market earnings. The practice of awarding non qualified unlimited matching contributions to senior executive It's not unusual.
Item 4 is not looking to eliminate that. There's little doubt that there is a great disparity between retirement planning for our senior executives contrasting significantly with employees and especially retirees. For those who are still alive to remember, it was in 1991 that pensions last received a cost of living increase. Of course, pensions are no longer a factor for 41,000 retired management, whose pensions have been converted to insurance annuities in 20 13, thus losing all protections of the ERISA law. Passage of our proposal hopefully would encourage our Verizon Board of Directors to adopt the policy that prohibits the practice of paying above market earnings.
Where such a policy adopted, it would show compliance with what is considered to be a best practice. We encourage all shareholders to vote for item number 4. Thank you.
Thank you, Mr. Cohen. The next proposal was submitted by Mr. Kenneth Steiner. Item 5 on the proxy card calls for an amendment to the bylaws to allow a group of shareholders owning at least 10% of Verizon stock to call special shareholder meetings.
Mr. Jesse Alba will be presenting this proposal. Operator, please open Mr. Alba's line.
Mr. Alba, line is open.
Thank you, and
good afternoon. Proposal 5 makes shareholder right to call special meeting more accessible, sponsored by Kenneth Steiner. Shareholders ask the Board of Directors to take the steps necessary to amend the bylaws and each appropriate governing document to give holders in the aggregate of 10% of our common stock outstanding the power to call a special shareholder meeting. Special shareholder meetings allow shareholders to vote on important matters, such as electing new directors that can arise between annual meetings. This proposal topic won more than 70% support at Edwards Life Sciences and SunEdison.
This proposal topic also won 78% support at a Sprint Annual Meeting with 1,700,000,000 yes votes. Nuance Communications shareholders gave 94% support to a 2018 shareholder proposal, calling for 10% of shareholders to call a special meeting. This proposal topic won 49% support at the 2017 Verizon Annual Meeting, even with the headwind of vigorous management opposition. Management also had the bad manners of putting a thumbs down image next to the proposal. This 49% support represented at least 51% support from the shareholders who have access to independent proxy voting advice.
Thus, management should have adopted the proposal in 2018. Instead, Verizon flooded shareholders with advertisements to vote against this topic at the 2018 annual meeting. The current stock ownership threshold of 25% to call a special meeting can mean that more than 50% of shareholders must be contacted during a short window of time to simply call a special meeting. Plus, many shareholders who are convinced that a special meeting should be called can make a small paperwork error that will disqualify them from counting towards the 25 percent ownership threshold that is now needed for a special meeting. Since special shareholder meetings allow shareholders to vote on important matters such as electing new directors, adoption of this proposal might motivate our directors to perform better.
For instance, Mr. Daniel Shulman, who chaired the Verizon Executive Pay Committee, was rejected by 30% of shares at the 2019 Annual Meeting. Not surprisingly, 10% of Verizon shares rejected executive pay in 2019 when many companies can keep the rejection rate to around 5%. The 10% rejection was all the more significant because management sent shareholders special advertisements that focused exclusively on the supposed merits of the Verizon executive paychecks. Thus, it was not a level playing field for the 2019 Verizon say on executive pay vote.
Our Chairman and CEO, Mr. Hans Vestberg, had the poorest vote showing after Mr. Shulman. It is unusual for a Chairman and CEO to have such a poor ranking in shareholder voting. Please vote yes, make shareholder right to call special meeting more accessible, proposal 5.
Thank you.
Thank you, Mr. Alba. The next proposal was submitted by the International Brotherhood of Electrical Workers Pension Benefit Fund. Item 6 on the proxy card requests additional disclosure of the company's lobbying activities and expenditures. Ms.
Jennifer Doudenhof will be presenting this proposal. Operator, please open Ms. Doudenhof's line.
Ms. Durdenhoff's line is open.
Thank you. Good afternoon. My name is Jennifer Durdenhoff and on behalf of the IBEW Pension Benefit Fund, I hereby move Item 6, a proposal asking Verizon to provide a report of its federal and state lobbying activities, including indirect funding of lobbying through trade associations. As shareholders, we believe that transparency and accountability in the company's use of corporate funds to influence legislation and regulation are imperative, both to safeguard shareholder value and minimize reputational risk. As a public policy matter, strong lobbying disclosure practices are good for democracy.
While we agree that Verizon has made strides This
figure does not include expenditures
on the state level, where disclosure This figure does not include expenditures on the state level, where disclosure remains incomplete even as Verizon spends 1,000,000 lobbying in all 50 states. Verizon currently does not disclose a comprehensive list of its memberships and trade associations and tax exempt organizations nor its payments to these associations or the amounts used for lobbying. As we know, corporate reputation is an important component of shareholder value. The concern for investors is when a company says it supports something, but its trade association lobbies directly against that position, it creates a misalignment of values and reputational risk. Proxy Advisor ISF has recommended a vote in favor of this proposal, stating that the disclosure of additional information would allow shareholders to better assess the company's lobbying activities and its management of related risks opportunities.
Enhanced lobbying disclosure would increase transparency and accountability in the spending of shareholder resources. For these reasons, we urge you to vote in support of Item 6. Thank you.
Thank you, Ms. Dodenhof. The next proposal was submitted by the Trillium P21 Global Equity Fund and 1 co sponsor. Item 7 on the proxy card requested the company publish a report assessing the feasibility of integrating user privacy protections into the Verizon Executive Compensation Program described in the proxy materials. Ms.
Brianna Murphy will be presenting this proposal. Operator, please open Ms. Murphy's line.
Ms. Murphy, line is open.
Good morning, Mr. Chairman, members of the Board, fellow shareholders. My name is Brianna Murphy. I'm here on behalf of Trulium Asset Management and its clients to hereby move item number 7, seeking a report on integrating user privacy protections into executive compensation plans. Verizon is able to track how long people stream music, play online games or use social media.
It can tell whether a user shops at high end expensive stores, is visiting online dating sites or what news outlets they spend more time reading. It knows wireless device location and Internet protocol addresses. In short, Verizon has access to enormous amounts of user information. Therefore, we believe that if we want to correctly calibrate management's incentives regarding user privacy, the Human Resources Committee of the Board of Directors should at least explore ways in which the company can link executive compensation to user privacy. Trilium is far from alone in this view.
In its analysis of the shareholder proposal, ISS concluded that, Given the scope of the proposal and the increasing risks related to data privacy faced by the company and other recent data privacy abuse allegations, support for the resolution is warranted. In February, the FCC proposed fines against Verizon and its competitors for apparently selling access to their customers' location information without taking reasonable measures to protect against unauthorized access to that information. In addition, Verizon has also seen class action lawsuit for its alleged violation of privacy by sharing user location data to 3rd party brokers in the U. S. For all these reasons, Trillium believes there are compelling reasons executives under the company's compensation incentive plans.
Thank you for your time.
Thank you, Ms. Murphy. The next proposal was submitted by Jack and Eileen Cohen. It appears as Item 8 on the proxy card and calls for an expansion of the company's policy providing for shareholder approval of certain severance arrangements. Mr.
Jack Cohen will be presenting this proposal. Operator, could you please open Mr. Cohen's line?
Mr. Cohen, line is open.
Thank you. I am Jack Cohen again here for shareholder item number 8, the severance approval policy. Not too long ago shareholders won 59% of the vote for a proposal imposing a ceiling on termination payments to an outgoing CEO due to corporate restructuring, kind of called the golden parachute. The ceiling imposed was by itself very generous equal to 2.99 times annual salary plus short term bonus. A loophole was found in effect circumventing the intent of the existing limits in the form of restricted stock units and performance stock units key to performance targets and spread out over 3 year periods payable upon achievement of targeted performance.
However, during a termination without cause or due to a merger, these RSUs and PSUs accelerate vesting regardless of targeted achievement. The purpose of our proposal number rate is not to eliminate RSUs and PSUs. Instead, we want to include them in the total calculation subject to the limits established by shareholders years ago and since has been ignored by this loophole. The item number 8 seeks shareholder approval if and when that benchmark is exceeded once these RSU and PSU dollars are included in the calculation. If you included the RSU and PSU treatment, you could easily double the 2.99 threshold.
Shareholders need to weigh in on that decision when it succeeded. When one considers the generous combination of both qualified and non qualified retirement plans discussed in proposal number 4 as well as the termination parameters of this item number 8, we believe that it is reasonable to conclude that Verizon is very generous to our senior management. I've mentioned that generosity regarding pensions does not trickle down to retirees in item number 4. For retiree healthcare, retirees are provided only one single choice for health insurance coverage and has had a tumultuous impact. 2 very brief examples.
Kraft retirees in Central Massachusetts can no longer be treated by the largest, most prestigious healthcare provider in that region because UMass Memorial Healthcare stopped taking their Medicare Advantage Insurance. In today's pandemic, can you imagine that hardship? Similarly, at The Villages in Florida, management retirees are no longer welcome at the largest healthcare provider serving 52 1,000 patients since their Medicare Advantage plan was changed to Aetna on January 1. We urge shareholders to vote for item number 8 and against the item number 2 advisory vote for executive compensation. Thank you.
Thank you, Mr. Cohen. That concludes the introduction of the shareholder proposals. We have not received any questions or comments from our shareholders on the proposals. So now that the proposals have been discussed, the polls are closed as of 1:15 p.
M. The preliminary results show that each nominee listed in item 1 on the proxy card has been elected, that 93.4% of the shares voted in favor of Verizon's executive compensation and that the shareholders have ratified the appointment of Ernst and Young. The preliminary results with respect to the shareholder proposals show that 31% of the shares voted in favor of the shareholder proposal regarding non qualified savings plan earnings and 69% voted against. For the shareholder proposal regarding special shareholder meetings, the preliminary results show the proposal has passed by a very slim margin. We will announce the final results for this proposal in the Form 8 ks and on our website as I previously mentioned.
The preliminary results for the shareholder proposal regarding lobbying activities indicated that 47% of the shares voted in favor of the of of the shares voted in favor of the shareholder proposal to amend the severance policy and 56.5% voted against. Wrapping up, I'd like to thank you for attending Verizon Shareholder Meeting this year. This meeting is adjourned.