Sprint - Nextel 2013 Annual Report Download - page 77

Table of Contents
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."
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.
Use of Benchmarking Data
To assist in setting total compensation levels that are reasonably competitive, the Compensation Committee annually reviews market trends in
executive compensation and a competitive analysis prepared by Cook. This information is derived from the most recent proxy statement data of companies in a
peer group of telecommunications and high
- technology companies and, where limited in its functional position match to our executives, is supplemented with
data on our peer group from a published compensation survey prepared by Towers Watson of approximately 80 participating all industry companies with
revenues exceeding $4 billion.
Taking into consideration the recommendation of Cook, the Compensation Committee determines companies for our peer group based on similarity
of their business model and product offerings as well as comparability from a size perspective, including annual revenue, market capitalization, net income,
enterprise value and number of employees. For example, our revenue is above the median of our peer group while our enterprise value is below the median. The
Compensation Committee approved the use of the following 12 companies for its 2013 executive compensation benchmarking analysis:
AT&T, Inc., CenturyLink, Inc., Comcast Corporation, Computer Sciences Corporation, Dell Inc., DIRECTV, Motorola Solutions, Inc., Qualcomm
Incorporated, Texas Instruments Incorporated, Time Warner Cable, Inc., Verizon Communications Inc., and Xerox Corporation.
In September of 2013, we made the following changes to our peer group for future executive compensation decisions: removed Dell Inc. from our peer
group given its transition to a privately
- held company and
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comparing each named executive officer's total compensation against a similar position in our peer group;
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understanding the impact of decisions on each individual element of compensation on total compensation for each named executive officer;
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evaluating total compensation of each named executive officer from an internal equity perspective; and
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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 stockholders.