A group of 20 U.S. senators have asked Verizon's (NYSE: VZ) CEO Lowell McAdam to resolve its dispute with wireline union workers.
In a letter sent to McAdam late last week, the group asked Verizon "to work towards progress in the current round of collective bargaining with its unions."
The senators want the labor dispute to be resolved so Verizon can "move forward in investing in state-of-the-art broadband buildout for communities around our states, including currently underserved areas."
"It is our understanding that the Communications Workers of America and the International Brotherhood of Electrical Workers have offered to negotiate substantial savings in health care for the wireline workforce, but there are additional areas of concern for your workers, including job security, the treatment of sick and injured workers, pensions, and the contracting out of work," the senators said in a letter.
"While we recognize that changes in technology and customer preference have led to a decline in landline service, driving the need for some contract changes, we also want to be sure that Verizon preserves good family-supporting jobs in our region," the letter continued. "At the same time, Verizon's wireless side of the business has seen a surge in demand, indicating the need to negotiate a new contract that offers an opportunity to provide improvement in wages, health care, retirement security, and work rules for the wireless retail workers and technicians who have been at the heart of Verizon's success in this market and beyond that has driven the company's impressive profitability of $39 billion in the last three years."
Verizon and its 39,000 wireline workforce who are represented by the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) have been working to negotiate a new labor contract.
The original contract expired in 2015 and neither side has been able to come to an agreement over various issues such as health care, pension and sick time.
For its own part, Verizon says that the labor negotiations are a drag on the cost improvements it's trying to achieve in its wireline business.
Fran Shammo, CFO of Verizon, told investors at the UBS 43rd Annual Global Media and Communications Conference in December 2015 that "we're still in negotiation with the representation and it's going very slow so that's going to hinder some cost savings that we had counted on with that new contract."
Unions are only one entity that Verizon is drawing fire from. The telco continues to face challenges from the 134,000-member Association of BellTel Retirees Inc.
Jack Cohen, chairman of BellTel Retirees recently introduced a proxy challenge to Verizon that would require the telco to seek shareholder approval for any new or renewed executive severance payment exceeding three times an executive's base salary, plus short term bonus.
A similar proposal made by Cohen in 2015, gained nearly 35 percent shareowner support.
While the existing guideline, which was also proposed by BellTell, was first implemented in 2003 it left a loophole excluding the accelerated vesting of unearned performance stock units (PSUs) and restricted stock (RSUs).
What this means is that if current CEO Lowell McAdam was fired without cause, he can receive nearly seven times his base salary plus short-term bonus. McAdam could receive an estimated $37.2 million in termination payment.
- RCR Wireless has this article
- see this release
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