Verizon

Remarks of Scott Klinger at Verizon Annual Meeting

Richmond, Virginia, April 28, 2004

Good Morning. My name is Scott Klinger and I am here to present this shareholder proposal on behalf of shareholder NorthStar Asset Management and other members of Responsible Wealth, who are also Verizon shareholders. Responsible Wealth is a national network of affluent Americans who are concerned about widening economic inequality in America.

This resolution calls upon Verizon to report on the race and gender of those receiving stock options from the Company. We offer this resolution not to criticize Verizon’s diversity efforts, but rather to acknowledge that the company has been a leader on diversity issues. And to invite Verizon into a position of even greater leadership in the arena of corporate diversity.

In urging shareholders to oppose this resolution, the Board writes in the proxy: “While the Company is strongly committed to diversity, the Board of Directors, in granting stock options to employees, does not believe that an employee’s race or gender are relevant criteria when creating or administering compensation programs. Accordingly, such factors are not taken into account in connection with stock option grants.”

We think that leadership in diversity means examining the company’s compensation for discriminatory bias. Coca-Cola, for instance, subjects its option grants to rigorous statistical tests looking for patterns that may indicate unintended discriminatory practice.

It has been 35 years since Martin Luther King was assassinated and yet the racial wealth divide in America persists. In 2001 the average net worth of African American families was just $19,000 compared to $121,000 for white families. And in 2003 a black college graduate continues to earn $500,000 less over their lifetime than their white college classmates. What role do corporate compensation policies play in these disparities? Is the stock option wealth imparted by corporations flowing beyond its historical concentration in the hands of white men? These are the diversity questions of today and of the future.

A decade ago, companies regularly protested the release of EEO-1 diversity data. Arguments of “no one else is doing this” or “why do you need to know” were regularly heard. But slowly a few companies began to release this information and now it is standard operating procedure for large companies with a strong commitment to diversity. Verizon is one of these companies.

EEO-1 data is important for it paints a picture of the changing face of the corporate workforce, including the jobs opened to those groups historically excluded from positions of greater authority and responsibility. While EEO-1 disclosures are important, they are not sufficient.

Stock options are the most valuable player awards given by company. The distribution of stock options maps where real power and responsibility lie within the corporation. We believe it is important for shareholders to see whether the stock option distribution map corresponds with the picture painted by EEO-1 disclosures.

Stock options represent a powerful way of distributing the wealth of the corporation, wealth we believe that is created not simply by executive officers, but by all employees working together to create shareholder value. It is often said, that no one got rich off of a paycheck, and while this is perhaps less true for senior executives of America’s corporations, few would argue with the contention that it is stock options that convey significant wealth.

The question we ask is easily answered. Perhaps Verizon already knows the answer. But to publicly disclose this answer requires an act of courage and leadership that our company is not yet prepared to make. Please support this resolution and send a message of affirmation and encouragement to Verizon’s board and management.

Thank you.

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