The former Verizon CEO ousted last month by the company’s board could still collect most of his $20 million pay package — even as the telecom giant bleeds customers, its stock sinks and 15,000 workers face layoffs.
Hans Vestberg, the Swedish executive who was pushed out in October, has an ally on the board who insists the departing CEO should still get the bulk of his pay, The Wall Street Journal reported.
Vestberg’s total compensation last year reached $24.16 million, according to SEC filings. That included a $1.5 million base salary plus stock awards and bonuses.
The 59-year-old will serve in an advisory role through October 2026, keeping him on the Verizon payroll for a full year after his ouster.
He’s eligible for much of his compensation package, worth over $20 million, if he hits certain performance thresholds, The Journal reported.
Verizon lost 7,000 net customers in the third quarter that ended in September, missing Wall Street expectations that it would add 19,000 customers, according to the publication.
The exec, who was appointed CEO of Verizon in 2018 after serving as CEO of Swedish telecom equipment maker Ericsson, had overseen two straight quarters of customer defections, with a third on the way.
T-Mobile, which was bolstered by its $26 billion merger with Sprint, kept taking market share with lower-cost and higher-quality service, according to The Journal.
Investors have felt the pain as Verizon’s stock has fallen 30% over the past five years.
Mark Bertolini, who was installed as Verizon’s new chairman of the board last month, told CNBC the poor results necessitated a 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 “needed to act, and we acted,” Bertolini said.
When Vestberg took over as CEO in 2018, he pursued a strategy focused on building out Verizon’s 5G network. The company spent more than $50 billion on spectrum to support 5G service, according to The Journal.
Vestberg also spearheaded Verizon’s acquisition of TracFone, the prepaid cellular provider, and the roughly $20 billion purchase of Frontier, a fiber-internet provider, The Journal reported.
But those moves haven’t paid off as intended, as Verizon kept losing wireless customers to rivals AT&T and T-Mobile.
The board finally ran out of patience with Vestberg at a September meeting in Texas, people familiar with the matter told The Journal.
The body tapped Dan Schulman, the former PayPal CEO who’d been serving as Verizon’s lead independent director since 2018, to take over right away.
Schulman doesn’t appear to have much time to turn around the company. The 67-year-old’s contract, which runs through 2027, calls for a $1.5 million base salary plus stock awards worth tens of millions tied to the company’s performance, the Journal reported.
Schulman is planning cost cuts that are likely to result in the reduction of about 15,000 jobs, The Journal reported Thursday. Verizon currently employs about 100,000 people.
A source familiar with the situation told The Post that the 15,000 figure is “in the ballpark” and that layoff notices are expected to be sent out to affected employees next week.
Verizon offered $4 million retention bonuses to two top executives — consumer group head Sowmyanarayan Sampath and finance chief Anthony Skiadas — to keep them through at least the end of 2027, according to the Journal.
Schulman told a Wall Street Journal event this week that Verizon needs to get “scrappier and less bureaucratic.”
Instead of focusing on network engineering, the company needs to become “obsessed with what customers want,” he said.
“We have not performed for our shareholders,” Schulman admitted. “I’m not afraid at this point in my life to make really hard decisions.”
“We have lost market share, consistently,” he said. “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.
