Fiber to the Wallet (FTTW)
NYSE: VZ
Every once in a while, I come across a situation where the downside of a stock seems mitigated via governance signals. I think Verizon fits that bill today and I’d argue that this situation is similar to a short-dated call option with near-zero cost. Is the Verizon board bold enough to do a spring-load?
On October 6th, Verizon put out a press release announcing that their CEO would be stepping down immediately and that Dan Schulman would be replacing him. Schulman has been a director on the Verizon board since 2018 and details pertaining to Schulman’s compensation were then released on October 14th. Key points include:
Term through Dec 31, 2027
$1.5MM in salary
250% STIP opportunity
$9.5MM RSU grant (granted Oct 17, 2025; vests Dec 31, 2026)
$20MM RSU grant (granted Oct 17, 2025; vests Dec 31, 2027)
$30MM relative-TSR PSU
Earned at a range of 0-200%
50% based on relative-TSR during performance period from Oct 17, 2025 until Dec 31, 2026
50% based on relative-TSR during performance period from Oct 17, 2025 until Dec 31, 2027
222,222 supplemental PSUs
Earned at a range of 0-300%
Based on share price goals ranging from $55-75, with a total of nine separate tranches
Based on stock price performance from Oct 17, 2025 until Dec 31, 2028
In a “CEO succession event”, Schulman gets full vesting of the time-based component of each award
The key points to note about the awards are that all performance periods begin on October 17. In addition, the PSUs and RSUs granted to Schulman represent all of the equity he will receive from now until December 31, 2027. In other words, these awards are front-loaded.
While that is intriguing on its own, two important clues lead me to believe that a spring-load is on the table:
Verizon is scheduled to announce Q3 earnings (Sep 30th ended) on October 29th. It is highly likely that the compensation committee already had Q3 earnings in hand when they awarded the RSUs and PSUs on October 14th.
On October 14th, the company also gave their EVP Consumer and their CFO one-time retention RSUs worth $4MM each. These were also granted effective October 17th.
This sets up an interesting situation. Verizon gave a ton of front-loaded awards to its CEO, as well as retention RSUs to other execs, and did so approximately two weeks before it is set to announce earnings. Surely, they wouldn’t give all these equity awards if the stock was set to crater on the earnings release date.
If earnings were truly going to disappoint, then the board would’ve just waited for earnings to be announced and then provided the grants to the executives at a lower stock price. This would actually be more appropriate from a governance standpoint, since proper procedure is to grant equity after earnings are announced.
Lastly, Schulman has been a Verizon director since 2018 and was recently elevated to lead independent director in December 2024. If anyone were to have the information (and the power) to effect a spring-load, it would be him.
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PS: Some of you may have noticed that the frequency of my writing has slowed. I have purposely held back some ideas from the blog...more on this to come. (Friendly reminder that I will never put up a paywall.)