Windstream 2012 Annual Report Download - page 22

MANAGEMENT COMPENSATION
Compensation Discussion and Analysis
General. This Compensation Discussion and Analysis provides information regarding the compensation paid to our
Chief Executive Officer, Chief Financial Officer and certain other executive officers who were the most highly compensated
in fiscal year 2012. These individuals, referred to as “named executive officers” or “NEOs,” are identified below:
xJeffery R. Gardner, President and Chief Executive Officer
xAnthony W. Thomas, Chief Financial Officer and Treasurer
xBrent Whittington, Chief Operating Officer
xJohn P. Fletcher, Executive Vice President and General Counsel
xCynthia B. Nash, Chief Information Officer
Compensation Philosophy. Windstream’s executive compensation program is designed to achieve the following
objectives:
xProvide a high correlation between pay and performance;
xAlign management’s interests with the long-term interests of Windstream’s stockholders; and
xProvide competitive compensation and incentives to attract and retain key executives.
Below we highlight certain executive compensation practices we employ to further these objectives. Also listed
below are certain compensation practices we do not employ because we believe them to be inconsistent with our
compensation objectives.
What We Do:
xEquity-Based Compensation – A substantial portion of total NEO compensation is paid in equity-based
compensation in the form of restricted stock and restricted stock units, whose value is directly correlated to
the performance of our stock. This practice achieves a strong alignment between interests of management
and our stockholders.
xAt-Risk Compensation – At least 73% of NEO pay, and 85% for our CEO, is contingent upon achievement
of certain corporate performance goals.
xClawback Policy – We maintain a clawback policy that allows us to recover incentive compensation that is
derived from financial statements filed with the SEC that are subsequently subject to restatement and
certain other conditions are satisfied.
xRobust Stock Ownership Guidelines – We have robust stock ownership guidelines that apply to all
executive officers and require that, among other things, our CEO own Windstream stock valued at 10 times
his base salary.
xIndependent Compensation Consulting Firm – The Compensation Committee benefits from its utilization
of an independent compensation consulting firm which provides no other services to the Company.
xRegular Review of Share Utilization – We evaluate share utilization by reviewing overhang levels (dilutive
impact of equity compensation on our stockholders) and annual run rates (the aggregate shares awarded as
a percentage of total outstanding shares).
What We Don’t Do:
xNo Dividends or Dividend Equivalents on Unearned Performance Based Equity Awards – No dividends or
dividend equivalents are paid on performance based equity awards unless and until all performance
conditions are met.
xNo Single Trigger – Our equity awards provide for accelerated vesting of future awards after a change in
control if an employee is also terminated within two years of the change in control (a double trigger) rather
than upon the transaction itself (single trigger).
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