Windstream 2007 Annual Report Download - page 36

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shareholders to cast an advisory vote on the “directors’ remuneration report,” which discloses executive
compensation. Such a vote isn’t binding, but gives shareholders a clear voice that could help shape senior
executive compensation.
Currently U.S. stock exchange listing standards require shareholder approval of equity-based
compensation plans; those plans, however, set general parameters and accord the compensation committee
substantial discretion in making awards and establishing performance thresholds for a particular year.
Shareholders do not have any mechanism for providing ongoing feedback on the application of those general
standards to individual pay packages.
Similarly, performance criteria submitted for shareholder approval to allow a company to deduct
compensation in excess of $1 million are broad and do not constrain compensation committees in setting
performance targets for particular senior executives. Withholding votes from compensation committee members
who are standing for reelection is a blunt and insufficient instrument for registering dissatisfaction with the way
in which the committee has administered compensation plans and policies in the previous year.
Accordingly, we urge the board to allow shareholders to express their opinion about senior executive
compensation by establishing an annual referendum process. The results of such a vote could provide our board
with useful information about shareholders views on the company’s senior executive compensation, as reported
each year.
We urge shareholders to vote for this proposal.
BOARD OF DIRECTORS’ STATEMENT
IN OPPOSITION TO THE STOCKHOLDER PROPOSAL
The Board of Directors unanimously recommends a vote “AGAINST” the Stockholder Proposal for
the following reasons:
This proposal seeks to solicit a non-binding vote from stockholders regarding the compensation provided
to the executives named in the Company’s Summary Compensation Table (the “Named Executive Officers”). For
the reasons explained below, the Directors believe that adopting the proposal is unnecessary and not in the best
interest of the Company and its stockholders.
The Board believes that its Compensation Committee uses an effective process for establishing executive
compensation. The Compensation Committee is responsible for establishing and maintaining a competitive and
fair compensation policy that attracts, motivates and retains the talented employees necessary to execute the
Company’s strategies and achieve its goals. To this end, the Committee, which is comprised entirely of
independent directors, is responsible for setting compensation for the CEO and recommending the compensation
of the other senior executives. When establishing programs or setting compensation levels, the Committee makes
numerous complicated and inter-related decisions, all requiring judgment and careful consideration of various
relevant factors.
Although the Board believes that the Committee is in the best position to determine executive
compensation levels, the Board believes that the Company’s investors are a crucial stakeholder whose views
should be heard and considered. Stockholders who wish to express their opinions on the Company’s executive
compensation strategy, or any other matter of interest to the Company, are therefore encouraged to do so by
writing a member of the Board, including any member of the Compensation Committee, at
Windstream Corporation
4001 Rodney Parham Road
Little Rock, AR 72212
30