NOTICE OF EXEMPT SOLICITATION

Pursuant to Rule 14a-103

Name of Registrant: Verizon Communications Inc

Name of Person Relying on Exemption: Trillium Asset Management, LLC

Address of Person Relying on Exemption: Trillium Asset Management, LLC, 60 South Street, Suite 1100, Boston, MA 02111

Written materials are submitted pursuant to Rule 14a-6(g)(1) promulgated under the Securities Exchange Act of 1934.

 

April 9, 2024

Verizon Communications Inc.

Item 4 Cease Political Spending Study

Item 4, filed by the Trillium Asset Management ESG Global Equity Fund, asks Verizon’s board of directors to commission, oversee, and publish an independent third-party study which examines the impact on the company, the sector, and American democracy of the company adopting a policy prohibiting the use of corporate or PAC funds for direct or indirect contributions to political candidates.

This shareholder proposal is meaningfully different than a similar proposal filed for 2023 in that it seeks improved disclosure and analysis by the board of the impact of political spending in the form of a study. This study may be able to help investors assess risk and better understand the role of political spending in the company’s business strategy and its relationship to profit and shareholder return.

For the following reasons we encourage Verizon shareholders to support this shareholder proposal.

Corporate political spending has been a topic of controversy for many years. While some argue that it is necessary for companies to engage in political donations to protect their interests, we believe that it can be detrimental to both the company and the broader economy. One study found that corporate political activity in the form of lobbying and PAC spending by S&P 500 companies was strongly and negatively related to company value.¹ This suggests that ceasing political spending does not necessarily put a company at a competitive disadvantage.

While each have their own reasons, the following 20 companies² have prohibited all political spending:

Accenture Assurant Automatic Data Processing Becton, Dickinson and Co. Boeing DuPont de Nemours Goldman Sachs Group Honeywell International MSCI Ulta Beauty Welltower Hess International Business Machines Nvidia United Rentals Colgate-Palmolive Mettler-Toledo International Ralph Lauren Verisign Waters

Verizon’s statement of opposition baldly argues that stopping political spending would put it at a severe disadvantage. The problem with this assertion is two-fold. One, it is lacking in any factual support or evidence – it is a conclusion without any backing. Two, it assumes the results of the study we seek. In addition, the company fails to directly respond to the primary points of the shareholder proposal. Specifically:

1. Verizon does not argue that its political contributions reflect the diverse preferences and views of its stakeholders.

2. Verizon does not provide data to show that its political contributions create economic value for the company or its shareholders. If it is so confident that it does, it should be eager to prove that point.

3. Verizon merely asserts that ceasing political contributions would put it at a disadvantage but provides no evidence to support this claim.

[1] https://hbr.org/2022/01/corporate-political-spending-is-bad-business

[2] https://www.politicalaccountability.net/wp-content/uploads/2024/02/2023-CPA-Zicklin-Index.pdf

 

Finally, we believe that widely diversified and indexed investors have a compelling interest in the health and wellbeing of American democracy. As the chief economics commentator for the Financial Times and the author of the recent book The Crisis of Democratic Capitalism argued, capitalism cannot survive without democracy.³ Corporate political spending, which we believe is lacking in stakeholder legitimacy, economic justification, or evidence of effectiveness, and all the while presenting reputational headaches, appears to be contrary to the well-functioning democracy that we need. Which is also why we are concerned that by one accounting Verizon has contributed $346,000 to political candidates who either sought to overturn the 2020 U.S. Presidential Election or have endorsed those efforts.⁴

We therefore urge Verizon shareholders to vote FOR Item 4.

For questions regarding Item 4, please contact: Jonas D. Kron, Chief Advocacy Officer of Trillium Asset Management at jkron@trilliuminvest.com.

IMPORTANT NOTICE: The views expressed are those of the authors as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be a forecast of future events or a guarantee of future results. These views may not be relied upon as investment advice. The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the authors on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is for informational purposes and should not be construed as a research report.

THIS IS NOT A PROXY SOLICITATION AND NO PROXY CARDS WILL BE ACCEPTED.

Please execute and return your proxy card according to Verizon Communications Inc instructions.

[3] https://www.rnz.co.nz/national/programmes/afternoons/audio/2018880611/new-book-examines-crisis-of-democratic-capitalism

[4] https://popular.info/p/these-50-companies-have-donated-over