Verizon Details Performance Stock Unit Structure Tied to EPS Growth and Shareholder Returns
The telecommunications giant's latest 10-Q filing reveals a complex long-term incentive framework with vesting benchmarks tied to earnings growth and relative market performance through 2028.
Multi-Year Incentive Plan Unveiled
Verizon Communications Inc. disclosed details of its 2026 Performance Stock Unit Agreement in its latest quarterly filing, outlining a compensation structure that ties executive rewards to both earnings growth and shareholder returns over a three-year performance period running through December 31, 2028 (10-Q filing, 2026-07-31).
The program splits performance stock units (PSUs) evenly between two metrics: adjusted earnings per share growth and total shareholder return relative to peers. Each metric accounts for half of the target number of PSUs granted to participants under the company's 2017 Long-Term Incentive Plan.
EPS Growth Benchmarks
For the earnings component, vesting is split across two measurement periods. Half of the EPS-based PSUs vest based on two-year performance from January 1, 2026 through December 31, 2027, while the remainder vests based on three-year performance through December 31, 2028 (10-Q filing, 2026-07-31).
The filing indicates that no EPS PSUs vest unless the company achieves a threshold level of adjusted earnings per share, at which point participants receive 50% of their target allocation. The vesting percentage scales from 0% to 200% based on achievement, with the filing noting that specific EPS targets "represent a compound annual growth rate of 3%" at the low end, "4%" at target, and "6%" at maximum performance levels (10-Q filing, 2026-07-31).
The Human Resources Committee retains authority to "adjust such earnings per share to eliminate the financial impact" of acquisitions, divestitures, accounting changes, and other extraordinary items (10-Q filing, 2026-07-31).
Relative TSR Performance
The total shareholder return component measures Verizon's stock performance against companies in the S&P 100 Index as of December 31, 2025. This metric is divided into three tranches: 25% vesting based on one-year TSR, 25% on two-year TSR, and 50% on three-year TSR (10-Q filing, 2026-07-31).
Vesting requires Verizon to rank at or above the 25th percentile of the comparison group, with the payout scaling to 200% for performance at or above the 75th percentile. The filing specifies that TSR calculations use "the average closing price of the applicable company's common stock over the twenty (20) consecutive trading days" at the beginning and end of each measurement period, with Verizon's starting price set at $40.57 (10-Q filing, 2026-07-31).
Notably, if Verizon's absolute TSR is negative over the three-year period, "the weighted average of the Verizon TSR Vested Percentages with respect to all of the TSR Award Cycles will not exceed 100%" (10-Q filing, 2026-07-31).
Additional Terms
The PSUs include dividend equivalent units that accrue when Verizon pays dividends, converted to additional PSUs based on the stock's closing price on each dividend payment date. Participants must generally maintain continuous employment through the performance period to vest, with exceptions for certain termination scenarios outlined in the agreement (10-Q filing, 2026-07-31).
MarginX data shows recent insider activity including awards to executives Villanueva Rodriguez Alfonso (83.489 shares), Venkatesh Vandana (101.906 shares), and Stillwell Mary-Lee (46.656 shares). The company is scheduled to report third-quarter 2026 results on October 20.
This article was generated by MarginX from the 10-Q filing on 2026-07-31. It is not investment advice.