VZ DEF 14A Report ended May 5, 2016

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE

(RULE 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.     )

Filed by the Registrant x

Filed by a Party other than the Registrant ¨

Check the appropriate box:

VERIZON COMMUNICATIONS INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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Corporate

Responsibility

at Verizon

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Proxy Summary

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, so you should read the entire proxy statement before voting. For more complete information regarding Verizon’s 2015 performance, please review Verizon’s 2015 Annual Report to Shareholders.

We look back on 2015 as a year that solidified Verizon’s position at the center of the trends shaping the digital age.

Looking ahead to the future in 2016...

Aol.

go90

ThingSpace

hum

5G

Acquired leading digital advertising capability and content

Launched millennial- focused path-breaking video streaming service

Unveiled a platform that helps developers bring new Internet of Things technologies to market

Introduced the possibility of telematics to 150 million cars on the road today

Leading the evolution of wireless technology with field trials expected in 2016

Meeting information Date and time May 5, 2016, 8:30 a.m., local time Place Hotel Albuquerque at Old Town, 800 Rio Grande Boulevard, NW, Albuquerque, New Mexico 87104 Record Date Shareholders as of March 7, 2016 may vote Admission and Voting Please see “Additional Information about the Annual Meeting” beginning on page 78

		Verizon 2016 Proxy Statement		i

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Proxy Statement

We are mailing this proxy statement to our shareholders beginning on March 21, 2016, and it is also available online at www.edocumentview.com/vz or, if you are a registered holder, at www.envisionreports.com/vz . Our Board of Directors is soliciting proxies in connection with the 2016 Annual Meeting of Shareholders and encourages you to read this proxy statement and vote your shares promptly.

Verizon’s Governance Practices

Commitment to good governance

Our Board of Directors believes that high standards of corporate governance increase value for Verizon’s shareholders and enhance our reputation. All of our Directors stand for election each year, and 12 of our 13 Directors standing for re-election this year are independent. Our rigorous Director nomination process identifies candidates with the time, skills and experience to contribute to Verizon and to engage with management about all aspects of our business. Collectively, our Board embodies a range of viewpoints, backgrounds and expertise because our Board believes that diversity is an important attribute of a well-functioning Board.

The Board conducts its oversight responsibilities through four standing committees: Audit, Corporate Governance and Policy, Finance and Human Resources. Each committee has a written charter that defines its specific responsibilities. The committees are discussed beginning on page 7.

The Corporate Governance and Policy Committee ensures that the membership, structure, policies and practices of our Board and its committees promote the effective exercise of the Board’s role in the governance of Verizon. In addition, our Corporate Governance Guidelines provide a framework for the Board’s operation and address key governance practices. The Corporate Governance and Policy Committee monitors developments in corporate governance, considers the views of Verizon’s shareholders, and periodically recommends changes to the Board’s policies and practices, including the Guidelines.

		Where to find more information on governance at Verizon You can find Verizon’s Corporate Governance Guidelines, Code of Conduct and other corporate governance materials, including Verizon’s certificate of incorporation, bylaws, committee charters and policies, on the Corporate Governance section of our website at www.verizon.com/about/investors/ . You can request copies of these materials from the Assistant Corporate Secretary at the address given under “Contacting Verizon.”

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Verizon’s Governance Practices | Key corporate governance features

Key corporate governance features

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Verizon’s Governance Practices | Business conduct and ethics

Business conduct and ethics

We are committed to operating with the highest level of integrity, responsibility and accountability. To that end, we have adopted a Code of Conduct that applies to all employees, including the CEO, the Chief Financial Officer and the Controller. The Code of Conduct describes each employee’s responsibility to conduct business with the highest ethical standards and provides guidance about preventing, reporting and remediating potential compliance violations in key areas. Directors are expected to act in the spirit of the Code of Conduct, and to comply with the specific ethical provisions of the Corporate Governance Guidelines. Our Board is strongly predisposed not to waive any of the business conduct and ethics provisions applicable to Directors or executive officers. In the event of a waiver, we will promptly disclose the Board’s action on our website.

Related person transactions

The Board has adopted the Related Person Transaction Policy that is included in the Guidelines. The Corporate Governance and Policy Committee reviews transactions between Verizon and any of our Directors or executive officers or members of their immediate families to determine if any participants have a material interest in the transaction. Based on the facts and circumstances of each case, the Committee may approve, disapprove, ratify or cancel the transaction or recommend another course of action. Any Committee members who are involved in a transaction under review do not participate in the Committee’s deliberations.

From time to time Verizon has employees who are related to our executive officers or Directors. Lowell McAdam, Chairman and CEO, has a child who is employed by a Verizon subsidiary and earned approximately $131,804 in 2015. Francis Shammo, Executive Vice President and Chief Financial Officer, has an in-law who is employed by a Verizon subsidiary and earned approximately $384,084 in 2015. John Stratton, Executive Vice President and President of Operations, has a child who is employed by a Verizon subsidiary and earned approximately $179,828 in 2015, and an in-law who is employed by a Verizon subsidiary and earned approximately $182,576 in 2015. In each case, the amount of compensation earned was comparable to that of other employees in similar positions. These employees also participate in Verizon’s welfare and benefit plans that are made available to all employees.

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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.

Independence

Verizon’s Corporate Governance Guidelines establish standards for evaluating Director independence and require that a substantial majority of the Directors be independent. The Board determines the independence of each Director under NYSE and Nasdaq governance standards as well as the more stringent standards included in the Guidelines. These standards identify the types of relationships that, if material, could impair independence, and fix monetary thresholds at which the relationships are considered to be material. The Guidelines are available on the Corporate Governance section of our website at www.verizon.com/about/investors/ . The Corporate Governance and Policy Committee conducts an annual review of any relevant business relationships that each Director may have with Verizon and reports its findings to the full Board. Based on the Committee’s recommendation, the Board has determined that all of the incumbent non-employee Directors who are standing for election are independent: Shellye Archambeau, Mark Bertolini, Richard Carrión, Melanie Healey, M. Frances Keeth, Karl-Ludwig Kley, Donald Nicolaisen, Clarence Otis, Jr., Rodney Slater, Kathryn Tesija, Gregory Wasson and Gregory Weaver. The Board also determined that Robert Lane, who served as a Director until May 7, 2015, was independent.

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Our Board of Directors | Independence

The employers of Ms. Archambeau, Mr. Bertolini, Mr. Carrión, Ms. Healey, Dr. Kley, Mr. Slater and Ms. Tesija all made payments to Verizon for telecommunications services and solutions. In addition, Verizon made payments to Mr. Bertolini’s employer under an administrative services contract for employee healthcare benefits. Verizon also made payments to Ms. Tesija’s employer in connection with sales of Verizon’s products and services at that company’s stores, and received payments from that company for cyber security services. Applying the independence standards, the Board considered all of the foregoing payments and determined that these general business transactions and relationships are not material and did not impair the ability of the applicable Directors to act independently.

Board leadership

Each year, our Board evaluates whether its leadership structure is appropriate to effectively address the specific needs of our business and the long-term interests of our shareholders. Given the dynamic and competitive environment in which Verizon operates, the Board believes that Verizon and our shareholders are best served by a Chairman who has broad and deep knowledge of Verizon’s business operations and the competitive landscape, the ability to identify strategic issues and the vision to create sustainable long-term value for shareholders. Based on these considerations, the Board has determined that, at this time, our CEO, Lowell McAdam, is the Director best qualified to serve in the role of Chairman.

the agenda for each Board and committee meeting in advance and can request changes. In addition, all Directors have unrestricted access to the Chairman and senior leadership team at all times.

The Board believes that shareholders are best served by the Board’s current leadership structure because it features an independent Lead Director – who provides the ability to maintain independent and objective oversight and who can express the Board’s positions in a forthright manner – as well as independent Directors who are fully involved in the Board’s operations and decision making.

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Our Board of Directors | Board meetings and executive sessions

Board meetings and executive sessions

In 2015, our Board of Directors held 10 meetings, including 7 regularly scheduled meetings and 3 special meetings. No Director standing for election attended fewer than 75% percent of the total number of meetings of our Board and the committees to which the Director was assigned.

Directors standing for re-election are expected to attend the annual meeting of shareholders. In 2015, all Directors standing for re-election attended the annual meeting.

The Corporate Governance Guidelines require the independent Directors to meet in executive session without any members of management present at least twice a year to review and evaluate the performance of the Board and to evaluate the performance and approve the compensation of the CEO. In practice, our Board typically meets in executive session during each regular Board meeting.

Annual board and committee evaluations

Our Board conducts an annual self-assessment aimed at enhancing its effectiveness. As part of the assessment, each Director completes a written questionnaire that is designed to gather suggestions for improving Board effectiveness and to solicit feedback on a range of issues, including Board operations, Board and committee structure and dynamics, the flow of information from management, and agenda topics. In addition, the Lead Director conducts individual interviews with each of the independent Directors to discuss these topics. The feedback received from the questionnaires and interviews is discussed during an evaluation session.

Each of the four standing committees also conducts its own annual self-assessment, which includes a written questionnaire and evaluation session. These evaluation sessions are led by the committee chairs and generally include a review of the committee charter, the annual agenda, and the committee’s overall effectiveness.

In addition to these annual self-assessments, the Board evaluates and modifies its oversight of Verizon’s operations on an ongoing basis. During their executive sessions, the independent Directors consider agenda topics that they believe deserve additional focus and topics to be addressed in future meetings.

The Corporate Governance and Policy Committee annually appraises the framework for our Board and committee evaluation processes.

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Our Board of Directors | Committees of the Board

Committees of the Board

Our Board of Directors has established four standing committees: the Audit Committee, the Corporate Governance and Policy Committee, the Finance Committee and the Human Resources Committee. Each committee has a written charter that defines its specific responsibilities. The chair of each committee approves the agenda and materials for each meeting. Each committee has the authority to retain independent advisors to assist it in carrying out its responsibilities.

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Our Board of Directors | Committees of the Board

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Our Board of Directors | Committees of the Board

Nomination of candidates for Director

The Corporate Governance and Policy Committee considers and recommends candidates for our Board. The Committee reviews all nominations submitted to Verizon, including individuals recommended by shareholders, Directors or members of management. The Committee retained Heidrick & Struggles International, Inc. to help identify and evaluate other potential candidates. Any shareholder who wishes to submit a Director candidate to the Committee for its consideration should write to the Corporate Secretary at the address given under “Contacting Verizon.” A recommendation for a Director candidate should include the candidate’s name, biographical data and a description of his or her qualifications in light of the requirements described below. We will report any material change to the Committee’s procedure for consideration and nomination of candidates in a filing with the SEC and will post the information on the Corporate Governance section of our website at www.verizon.com/about/investors/ .

Requirements for Board candidates

To be eligible for consideration, any proposed candidate must:

Be ethical

Have proven judgment and competence

Have professional skills and experience in dealing with a large, complex organization or in dealing with complex problems that complement the background and experience already represented on our Board and that meet Verizon’s needs

Have demonstrated the ability to act independently and be willing to represent the interests of all shareholders and not just those of a particular philosophy or constituency

Be willing and able to devote sufficient time to fulfill responsibilities to Verizon and our shareholders

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Our Board of Directors | Nomination of candidates for Director

The Committee recognizes that a diverse set of viewpoints and practical experiences enhances the effectiveness of our Board. In evaluating candidates, the Committee considers how a candidate’s particular background, experience, qualifications, attributes and skills may complement, supplement or duplicate those of other prospective candidates.

The Committee specifically reviews the qualifications of each candidate for election or re-election. For incumbent Directors, this review includes the Director’s understanding of Verizon’s businesses and the environment within which Verizon operates, attendance and participation at meetings, and independence. After the Committee completes its evaluation of all candidates, it presents its recommendation to the Board. The Committee also discusses with the Board any candidates who were submitted to and considered by the Committee but not recommended for election or re-election.

Prior to nomination, each candidate for election and each incumbent Director standing for re-election must consent to stand for election or re-election and provide certain representations required under Verizon’s bylaws. Each candidate who is standing for re-election must also submit an irrevocable resignation, which will only become effective if (i) our Board or any Committee determines that any of the foregoing representations were untrue in any respect or (ii) the candidate does not receive a majority of the votes cast at the annual meeting of shareholders and the independent members of our Board decide to accept the resignation. Any decision regarding accepting a resignation following a failure to obtain a majority of the votes cast will be disclosed within 90 days after the election results are certified.

Shareholders wishing to nominate a Director should follow the procedures set forth in Verizon’s bylaws and described on page 83.

Risk oversight

Role of the Board

While senior management has primary responsibility for managing risk, our Board of Directors is responsible for risk oversight. The Board works with senior management to develop a comprehensive view of Verizon’s key short- and long-term business risks. Verizon has a formalized business risk management reporting process that is designed to provide visibility to the Board about critical risks and risk mitigation strategies.

The Board of Directors oversees the management of risks inherent in the operation of Verizon’s businesses and the implementation of its strategic plan by using several different levels of review. The Board addresses the primary risks associated with Verizon’s business units and corporate functions in its operations reviews of those units and functions. In addition, the Board reviews the risks associated with Verizon’s strategic plan at an annual strategic planning session and periodically throughout the year.

Role of the committees

Each of our Board committees oversees the management of risks that fall within that committee’s areas of responsibility. In performing this function, each committee has full access to management and may engage advisors.

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Our Board of Directors | Risk oversight

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Our Board of Directors | Succession planning and management development

Succession planning and management development

Verizon’s Board of Directors recognizes that one of its most important duties is to ensure senior leadership continuity by overseeing the development of executive talent and planning for the efficient succession of the CEO. Our Board has delegated primary oversight responsibility for succession planning to the Human Resources Committee, which oversees assignments to key leadership positions. The Committee reports on its activities to the full Board, which addresses succession planning during executive sessions that typically occur in connection with each regularly scheduled meeting.

To ensure that the succession planning and management development process supports and enhances Verizon’s strategic objectives, the Board and Human Resources Committee regularly consult with the CEO on Verizon’s organizational needs and competitive challenges, the potential of key managers, and plans for future developments and emergency situations. As part of this process, the Board and the Committee also routinely seek input from the Chief Administrative Officer, as well as advice on related compensation issues from the Committee’s independent compensation consultant.

Our Board generally conducts an in-depth review of senior leader development and succession planning at least once a year. Led by the CEO and the Chief Administrative Officer, this review addresses Verizon’s management development initiatives, assesses senior management resources, and identifies individuals who should be considered as potential future senior executives.

Our goal is to develop well-rounded and experienced senior leaders. High potential executives are challenged regularly with additional responsibilities, new positions, promotions or similar assignments to expose them to our diverse operations. These individuals are often positioned to interact more frequently with the Board, both in full Board meetings and in less formal settings and small groups, so the Directors can get to know and assess them.

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Our Board of Directors | Communicating with Directors

Communicating with Directors

Our Board of Directors believes that communication with shareholders and other interested parties is an important part of the governance process, and has adopted the following procedure to facilitate this communication.

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Election of Directors

Item 1 on Proxy Card

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.

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Election of Directors | Item 1 on Proxy Card

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Election of Directors | Item 1 on Proxy Card

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Election of Directors | Item 1 on Proxy Card

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Election of Directors | Item 1 on Proxy Card

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Election of Directors | Item 1 on Proxy Card

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Election of Directors | Item 1 on Proxy Card

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Election of Directors | Item 1 on Proxy Card

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Ratification of Appointment of

Independent Registered Public Accounting Firm

Item 2 on Proxy Card

The Audit Committee considered the performance and qualifications of Ernst & Young LLP, and has reappointed that independent registered public accounting firm to examine the financial statements of Verizon for fiscal year 2016 and to examine the effectiveness of internal control over financial reporting. Ernst & Young has been retained as Verizon’s independent registered public accounting firm since 2000.

Verizon paid the following fees to Ernst & Young for services rendered during fiscal years 2015 and 2014:

Audit fees include the financial statement audit, the audit of the effectiveness of Verizon’s internal control over financial reporting required by the Sarbanes-Oxley Act, and financial statement audits required by statute for our foreign subsidiaries or by regulatory agencies in the United States. Audit-related fees primarily include audits of other subsidiaries, employee benefit plan audits and reviews of controls over services provided to customers, as well as other audit and due diligence procedures performed in connection with acquisitions or dispositions. Our audit and audit-related fees in 2015 included $7.3 million of fees in connection with strategic transactions that were considered or entered into during 2015. Tax fees primarily consist of federal, state, local and international tax planning and compliance. All other fees primarily consist of support services to certain Verizon expatriate employees. The Audit Committee considered, in consultation with management and the independent registered public accounting firm, whether the provision of these services is compatible with maintaining Ernst & Young’s independence.

The Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm that performs audit services. In considering Ernst & Young’s appointment for the 2016 fiscal year, the Committee reviewed the firm’s qualifications and competencies, including the following factors:

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Ratification of Appointment of Independent Registered Public Accounting Firm | Item 2 on Proxy Card

In addition, in order to ensure continuing auditor independence, the Committee periodically considers whether there should be a regular rotation of the independent registered public accounting firm. The Committee ensures that the mandated rotation of Ernst & Young’s personnel occurs routinely and is directly involved in the selection of Ernst & Young’s lead engagement partner.

The Committee has established policies and procedures regarding pre-approval of services provided by the independent registered public accounting firm and is responsible for the audit fee negotiations associated with the engagement. At the beginning of the fiscal year, the Committee pre-approves the engagement of the independent registered public accounting firm to provide audit services based on fee estimates. The Committee also pre-approves proposed audit-related services, tax services and other permissible services, based on specified project and service details, fee estimates, and aggregate fee limits for each service category. The Committee receives a report at each meeting on the status of services provided or to be provided by the independent registered public accounting firm and approves the related fees.

The affirmative vote of a majority of the shares cast at the annual meeting is required to ratify the reappointment of Ernst & Young for the 2016 fiscal year. The Committee believes the continued retention of Ernst & Young to serve as Verizon’s independent registered public accounting firm is in the best interests of Verizon and our shareholders. If this appointment is not ratified by the shareholders, the Committee will reconsider its decision.

One or more representatives of Ernst & Young will be at the 2016 Annual Meeting of Shareholders. They will have an opportunity to make a statement and will be available to respond to appropriate questions.

		Our Board of Directors recommends that you vote for ratification.

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Audit Committee Report

In the performance of our oversight responsibilities, the Committee has reviewed and discussed with management and the independent registered public accounting firm Verizon’s audited financial statements for the year ended December 31, 2015, and the effectiveness of Verizon’s internal controls over financial reporting as of December 31, 2015.

The Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the Securities and Exchange Commission, the New York Stock Exchange, The NASDAQ Stock Market and Statement on Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

The Committee has received written disclosures and a letter from the independent registered public accounting firm consistent with applicable Public Company Accounting Oversight Board requirements for independent registered public accounting firm communications with audit committees concerning independence and has discussed with the independent registered public accounting firm its independence.

The Committee discussed with the internal auditors and the independent registered public accounting firm the overall scope and plans for their respective audits. The Committee met with the internal auditors and the independent registered public accounting firm, with and without management present, to discuss the results of their examinations, their evaluations of Verizon’s internal controls and the overall quality of Verizon’s financial reporting.

The Committee has overseen the operation of Verizon’s enterprise risk management program, including the identification of the primary risks to Verizon’s business. The Committee also periodically monitored and evaluated the primary risks associated with particular business units and functions.

Based on the reviews and discussions referred to above, in reliance on management and the independent registered public accounting firm, and subject to the limitations of our role, the Committee recommended to the Board of Directors, and the Board has approved, the inclusion of the financial statements referred to above in Verizon’s Annual Report on Form 10-K for the year ended December 31, 2015.

The Committee reviewed the independent registered public accounting firm’s performance, qualifications and tenure, the qualifications of the lead engagement partner, management’s recommendation regarding retention of the firm and considerations related to audit firm rotation, as discussed further on page 22. Based on that review, the Committee approved the reappointment of the independent registered public accounting firm for fiscal year 2016.

Respectfully submitted,

The Audit Committee

Donald Nicolaisen, Chair

Shellye Archambeau

M. Frances Keeth

Clarence Otis, Jr.

Kathryn Tesija

Gregory Wasson

March 2, 2016

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Advisory Vote to Approve

Executive Compensation

Item 3 on Proxy Card

Shareholders have strongly supported Verizon’s executive compensation program since our first advisory vote on the matter in 2009. We are asking you to vote in favor of the following non-binding resolution:

“Resolved, that the shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in Verizon’s proxy statement for the 2016 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Compensation Tables and the related narrative discussion.”

The structure of the executive compensation program for 2015 that is described in this proxy statement is substantially the same as it was last year. Our Board recommends a vote FOR this resolution because it believes that our program is effective in:

In the Compensation Discussion and Analysis and Compensation Tables beginning on page 27, we provide a detailed description of our executive compensation programs, including our philosophy, the elements of our programs and the compensation of our named executive officers. We encourage you to read these sections before deciding how to vote on this proposal.

This advisory resolution, commonly known as a “say-on-pay” resolution, is not binding on our Board of Directors. Nevertheless, the Board and the Human Resources Committee will review and consider the voting results when evaluating our executive compensation program.

Verizon’s Corporate Governance Guidelines provide for an annual say-on-pay advisory vote. The next say-on-pay advisory vote will occur at the 2017 Annual Meeting of Shareholders.

		Our Board of Directors recommends that you vote for this proposal.

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Compensation Committee Report

The Human Resources Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussions, the Committee recommended to the Board of Directors, and the Board has approved, the inclusion of the Compensation Discussion and Analysis in this proxy statement and Verizon’s Annual Report on Form 10-K.

Respectfully submitted,

The Human Resources Committee

Clarence Otis, Jr., Chair

Richard Carrión

Melanie Healey

Rodney Slater

Gregory Wasson

March 2, 2016

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Compensation Discussion and Analysis | Executive summary

Best practices in executive compensation and governance

Our commitment to industry-leading practices for compensation design and governance is reflected in the design of our compensation program. The Human Resources Committee regularly reviews best practices in executive compensation and governance and has revised our policies and practices over time. These practices include:

Compensation practice						Verizon policy		More information
Pay for performance						Approximately 90% of named executive officers’ total compensation opportunity is variable, incentive-based pay.			P. 34
Robust stock ownership guidelines						We have stock ownership guidelines for the CEO of 7x base salary; for other named executive officers of 4x base salary; and for Directors of 3x the cash component of the annual Board retainer.			P. 45
Shareholder outreach						Our outreach program gives institutional shareholders the opportunity to provide ongoing input on our executive compensation program and policies.			P. 30
Double trigger change in control						Our Long-Term Incentive Plan (Long-Term Plan) requires both a change in control and an involuntary termination for vesting of awards.			P. 45
Clawback policy						Our clawback policy gives us the right to recapture and cancel incentive payments received by executives who engaged in financial misconduct.			P. 46
Annual compensation risk assessment						We perform a risk assessment of our compensation program every year.			P. 11
Independent compensation consultant						An independent compensation consultant reviews and advises the Human Resources Committee on executive compensation. The consultant cannot do any work for the Company while it is engaged by the Committee.			P. 29
Anti-hedging policy						Our anti-hedging policy prohibits Directors, executives and employees who receive equity-based incentive awards from entering into transactions designed to hedge or offset any decrease in the market value of Verizon stock that they own.			P. 46
Single peer group for benchmarking						The same peer group (Related Dow Peers) is used to benchmark executives’ total compensation opportunity and to evaluate long-term performance, which provides consistency and transparency to our shareholders.			P. 30
Annual shareholder say-on-pay						We value our shareholders’ input on our executive compensation program, so our Board seeks an annual non-binding advisory vote from shareholders every year to approve the executive compensation disclosed in our CD&A and compensation tables.			P. 25
Tax gross-ups						We do not provide tax gross-ups to our executive officers.			P. 44
Dividends on unearned performance awards						We do not pay dividends on unearned Performance Stock Units (PSUs) or Restricted Stock Units (RSUs).			P. 40
Employment contracts						None of our named executive officers has an employment contract.			P. 45
Guaranteed benefits						We froze defined benefit pension and supplemental retirement benefits beginning in 2006.			P. 44

28		Verizon 2016 Proxy Statement

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Compensation Discussion and Analysis | Roles and responsibilities

Roles and responsibilities

Human Resources Committee

The Human Resources Committee of the Board of Directors oversees the development and implementation of the compensation program for Verizon’s named executive officers.

Management

The Committee may consult with the Executive Vice President and Chief Administrative Officer about the design, administration and operation of the compensation program. The Committee has delegated administrative responsibility for implementing its decisions on compensation and benefits matters to the Chief Administrative Officer, who reports to the Committee on the actions taken under this delegation.

While the Committee makes an independent determination on all matters related to the compensation of the named executive officers, the Committee seeks the CEO’s views on whether the existing compensation policies and practices continue to support Verizon’s business and performance objectives, utilize appropriate performance targets, and appropriately reward the contributions of the other named executive officers.

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:

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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.

Shareholder feedback on compensation

Our Board, the Committee and our management team value shareholder perspectives on our executive compensation program. As part of the Committee’s annual review of the program, it considers the outcome of Verizon’s annual shareholder advisory vote on executive compensation – the “say-on-pay.” At our Annual Meeting in May 2015, the compensation of our named executive officers was approved by approximately 93% of votes cast, demonstrating a high level of shareholder support for our compensation program and policies. Management and Directors also engaged with our institutional shareholders in meetings and calls throughout the year. In Verizon’s 2015 fall outreach, management, along with the Committee’s independent compensation consultant, engaged with our institutional shareholders concerning executive compensation. In these sessions, we discussed Verizon’s overall compensation philosophy and program, including the use of relative TSR as a predominant LTI metric, as well as recent SEC compensation disclosure initiatives. Our investors continued to voice support for our overall compensation program, believing it to be well-structured and aligned with performance. Based on this feedback, the results of our 2015 say-on-pay vote, and the history of strong shareholder support in prior say-on-pay votes, the Committee believes there continues to be strong shareholder support for Verizon’s executive compensation program.

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 50 ^th 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 50 ^th 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.

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

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.

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

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Compensation Discussion and Analysis | Compensation objectives and elements of compensation

Compensation objectives and elements of compensation

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.

Elements of compensation

The Committee determines the appropriate balance between fixed and variable pay elements, short- and long-term pay elements and cash and equity-based pay elements when setting total compensation opportunity at competitive levels.

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Compensation Discussion and Analysis | Compensation objectives and elements of compensation

The Committee references the 50 ^th 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.

Compensation mix

The Committee has determined that a substantial majority of each named executive officer’s total compensation opportunity should be variable and performance-based in order to emphasize a performance-based culture. Accordingly, for 2015, the Committee allocated approximately 10% of each executive’s total compensation opportunity in the form of base salary, 20% in the form of short-term incentive, and 70% in the form of long-term incentive.

The following chart illustrates the approximate allocation of the named executive officers’ 2015 total compensation opportunity between variable, performance-based elements and fixed pay:

		The named executive officers are also eligible to receive medical, disability and savings plan benefits that are generally provided to all management employees, as well as certain other benefits that are described under “Other Elements of the Compensation Program” beginning on page 44.

Performance target setting

The Committee takes a holistic approach to establishing performance targets under our incentive plans. Targets are set at the time of the Board’s annual strategy session to ensure that the compensation opportunities of our executives under the incentive plans are aligned with achievement of Verizon’s short- and long-term strategic goals. In establishing performance targets, the Committee recognizes the importance of achieving an appropriate balance between rewarding executives for strong performance over both the short- and long-term and establishing realistic goals that continue to motivate and retain executives. As a result, our Short-Term and Long-Term Plans provide for measurable, rigorous performance targets that are attainable, but challenge executives to drive business results that produce shareholder value.

In setting the performance targets, the Committee considered the following factors:

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Compensation Discussion and Analysis | 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.

2015 annual base salary

To determine an executive’s base salary, the Committee, with assistance from the Consultant, considers the pay practices of the Related Dow Peers for comparable positions; the executive’s experience, tenure and the scope of the executive’s responsibility; and internal pay equity. In particular, the Committee focuses on how base salary levels may impact the market competitiveness of an executive’s total compensation opportunity.

Based on its assessment, 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. These increases were designed to maintain the market competitiveness of each executive’s total compensation opportunity, taking into account the breadth and scope of each executive’s job responsibilities, and address continuity planning and management development considerations. The Committee determined the adjustments were appropriate for these named executive officers to provide a total compensation opportunity that more closely approximates the 50 ^th percentile for comparable executives within the Related Dow Peers, while maintaining a compensation mix that limits base salary to approximately 10% of the total compensation opportunity. Applying this same methodology, the Committee determined that Mr. McAdam’s base salary should not be adjusted in 2015.

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.

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Compensation Discussion and Analysis | 2015 short-term incentive compensation

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

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.

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.

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Compensation Discussion and Analysis | 2015 short-term incentive compensation

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.

		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.

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Compensation Discussion and Analysis | 2015 short-term incentive compensation

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.

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Compensation Discussion and Analysis | 2015 short-term incentive compensation

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.

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Compensation Discussion and Analysis | 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.

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

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Compensation Discussion and Analysis | Long-term incentive compensation

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 50 ^th 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.