Ousted Verizon boss could still pocket most of $20M salary as company cuts 15,000 jobs: report
The former Verizon CEO who was removed from his position by the company’s board last month may still be entitled to receive most of his $20 million pay package, despite the company’s declining performance and impending layoffs of 15,000 employees.
Hans Vestberg, the ousted Swedish executive, has a supporter on the board who argues that he should receive the majority of his compensation, as reported by The Wall Street Journal.
Vestberg’s total compensation last year amounted to $24.16 million, including a $1.5 million base salary, stock awards, and bonuses.
Despite being removed from his CEO position, the 59-year-old will continue to be employed by Verizon in an advisory capacity until October 2026.
He stands to receive a significant portion of his compensation package, valued at over $20 million, based on meeting certain performance targets, according to The Journal.
Verizon experienced a loss of 7,000 net customers in the third quarter of September, falling short of Wall Street’s expectations of adding 19,000 customers, the publication reported.
Under Vestberg’s leadership, Verizon had two consecutive quarters of customer losses, with a third quarter expected.
Meanwhile, T-Mobile, following its merger with Sprint, continued to gain market share by offering lower-cost and higher-quality services, as highlighted by The Journal.
Verizon’s stock price has dropped by 30% over the past five years, causing concern among investors.
Mark Bertolini, the newly appointed chairman of Verizon’s board, acknowledged the company’s poor performance as a driving factor behind the leadership change.
“Verizon has gone from number one in market cap, bond ratings and market share to number three,” Bertolini told CNBC’s “Squawk Box.”
“So losing 30% share over the last eight years is an issue, and we have to do something different.”
The board took action by appointing Dan Schulman, former PayPal CEO and Verizon’s lead independent director, to assume the CEO role without delay.
Schulman is now faced with the task of turning around the company’s performance. His contract extends through 2027 and includes a $1.5 million base salary, along with stock awards tied to the company’s performance, as reported by The Journal.
Schulman is planning cost-cutting measures that are expected to result in the elimination of approximately 15,000 jobs, according to The Journal. Verizon currently has around 100,000 employees.
A source familiar with the situation indicated that the 15,000 job cuts are imminent, with affected employees likely to receive layoff notices next week.
Verizon offered $4 million retention bonuses to two top executives—consumer group head Sowmyanarayan Sampath and finance chief Anthony Skiadas—to retain them until at least the end of 2027, per the Journal.
Schulman emphasized at a Wall Street Journal event the need for Verizon to become more agile and less bureaucratic.
He stressed the importance of focusing on customer needs rather than network engineering, acknowledging the company’s failure to deliver for shareholders.
“We have lost market share, consistently,” Schulman admitted. “And that cannot continue, going forward.”
“From our perspective, Dan is in charge, he has a mandate and he expects the company to carry it out — and we will,” Rich Young, a Verizon spokesperson, told The Post.
