Sprint - Nextel 2012 Annual Report Download - page 82

Table of Contents
and under the direction of the Compensation Committee and only on matters for which the Compensation Committee has oversight responsibility.
To ensure independence, the Compensation Committee has a policy regarding executive compensation consultants that codifies this
relationship. Representatives of Cook attend Compensation Committee meetings at the Compensation Committee's request and provide guidance to
the Compensation Committee on a variety of compensation issues. The primary point of contact at Cook frequently communicates with the chair of the
Compensation Committee and interacts with all Compensation Committee members without management present.
Cook has reviewed the compensation components and levels for our named executive officers and advised the Compensation Committee
on the appropriateness of our compensation programs, including our incentive and equity
- based compensation plans, retention incentives and
proposed employment agreements, as these matters arose during the year. The Compensation Committee has directed that Cook provide this advice
taking into account our overall executive compensation philosophy as described above. Cook prepares benchmarking data discussed below, reviews
the results with the Compensation Committee, and provides recommendations and an opinion on the reasonableness of new compensation plans,
programs and arrangements.
In addition to its ongoing support of the Compensation Committee and continuous advice on compensation design, levels and emerging
market practices, Cook periodically conducts a comprehensive review of our overall executive compensation program, including direct and indirect
elements of compensation, to ensure that the program operates in support of our short
- and long - term financial and strategic objectives and that it
aligns with evolving corporate governance “best practices.” Cook last completed such a comprehensive study in 2010 and found that, overall, the
program supported our specific business and human resource objectives, including unique issues related to our rapidly evolving turn
- around
initiatives. In both 2011 and 2012, Cook leveraged the findings from this comprehensive study and worked closely with the Compensation Committee
to ensure that our variable compensation plans continued to evolve in a manner that ensured appropriate focus on both our short
- and long - term
financial and strategic objectives as we work through Phase Two of our turnaround efforts.
Our CEO periodically discusses the design of and makes recommendations with respect to our compensation programs and the
compensation levels of our other named executive officers and certain key personnel with the Compensation Committee. Our CEO does not make
recommendations to the Compensation Committee with regard to his own compensation; rather, Cook provides the Compensation Committee with an
annual report on CEO compensation and a range of alternatives with regard to potential changes.
Process for Setting Executive Compensation
The Compensation Committee annually reviews the compensation packages of our named executive officers in the form of “tally sheets.”
These tally sheets value each component of compensation and benefits, including a summary of the outstanding equity holdings of each named
executive officer as of year
- end and the value of such holdings at various assumed stock prices. The tally sheets also set forth the estimated value that
each of our named executive officers would realize upon termination under various scenarios.
The Compensation Committee uses these tally sheets when considering adjustments to base salaries and awards of equity - based or other
remuneration and in establishing incentive plan target opportunity levels as follows:
Although the Compensation Committee reviews and considers the amounts realizable by our named executive officers under different
termination scenarios, including those in connection with a change in control, as well as the current equity
- based award holdings, these are not the
primary considerations in the assessment and determination of annual compensation for our named executive officers.
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•
comparing each named executive officer's total compensation against a similar position in our peer group;
•
understanding the impact of decisions on each individual element of compensation on total compensation for each named executive
officer;
•
evaluating total compensation of each named executive officer from an internal equity perspective; and
•
assuring that equity compensation represents a portion of each named executive officer's total compensation that is in line with our
philosophy of motivating the executives to align their interests with our shareholders.