This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Verizon Chief's Reign Ends, but Gravy Train Thunders On

Forget about the golden handshake. The time has come for the diamond-encrusted farewell.

With all the comings and goings lately in telecom, it's easy to be distracted by the gaudy paychecks being doled out to new executives. This past year, three of the industry's leading outfits -- Lucent (LU), Sprint (FON) and MCI -- each handed incoming CEOs at least twice as much scratch as their handsomely compensated predecessors.

But as good as the new bosses have it, the old bosses haven't quite been forced out onto the street to raise spare change. No, quite the contrary. It seems the royal perks like those heaped on GE's (GE) retired CEO, Jack Welch, aren't so much the exception as they are the rule.

You may recall last year's revelation that Welch's retirement benefits included unfettered access to a corporate jet, a company-owned New York apartment, paid memberships to various country clubs and a few other things.

Now consider Charles "Chuck" Lee, Verizon's (VZ - Get Report) former co-CEO. Thanks to a sweet severance deal he signed in 1999, coming up on the market's closest point to the sun, Lee almost makes Welch look second-rate.

Not only does Lee get all the nice stuff listed above, but he collects $3 million a year for his work as a consultant to Verizon. Lee quit his co-CEO job a year ago, giving Ivan Seidenberg sole control of the office. In addition to his consulting, Lee serves as non-executive chairman.

Lee also happens to have been the highest-paid telco executive last year, raking in $15.6 million in total compensation, according to federal filings and Multex. That dwarfs the paltry $9.5 million Seidenberg pulled down.


Verizon's Chuck Lee

"There's no justification to retain him as a consultant with this enormous fee," says critic Paul Hodgson of the Corporate Library. "From a corporate governance point of view, this is one of the worst contracts I've ever seen. It draws a picture of a board bending over backward to give a CEO anything they want."

What exactly does Lee do now for Verizon that's worth $3 million annually?

"In general, the answer is that this agreement accelerated Chuck's retirement, while giving Verizon and its shareholders the very important side benefit of his valuable expertise and counsel until June 30, 2004," Verizon spokesman Peter Thonis wrote in an emailed response. Lee didn't immediately reply to a request for comment.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
VZ $48.56 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs