Windstream 2013 Annual Report Download - page 12

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2013 EXECUTIVE COMPENSATION (PAGE 24)
Our compensation objectives are to pay for performance, align management’s interests with those of our
stockholders, and attract and retain key executives. Highlights of our compensation practices include:
What We Do: What We Don’t Do:
Link pay to performance × No excise tax gross-ups in any circumstance
Employ a clawback policy × No hedging transactions for directors and
executive officers
Provide only modest perquisites
Maintain robust stock ownership guidelines × No repricings of options without
stockholder approval
Utilize independent compensation consultant
Provide reasonable post-employment and change
in control benefits
× No special perquisites for former executives
× No top hat plan
Regularly evaluate equity plan overhang levels
and run rates
× No dividends on unvested performance-based
restricted stock
How Pay Is Tied to Company Performance (page 24)
Our executive compensation program is designed to provide a high correlation between pay and performance,
align management’s interests with the long-term interests of Windstream’s stockholders, and provide competitive
compensation and incentives to attract and retain key executives.
The Compensation Committee believes that Adjusted Operating Income Before Depreciation and Amortization
(Adjusted OIBDA) is the key measure of profitability that ensures our ability to generate solid and sustainable cash
flow over the long-term, so the Committee includes it as a key performance objective for both our short-term and
long-term incentive plans.
The short-term incentive plan also includes a Revenue objective because it is a strong indicator of Windstream’s
year-over-year performance and overall financial condition, and a payout ratio objective to strengthen the focus on
cash flow to fund Windstream’s capital allocation strategy.
Finally, our Named Executive Officers are eligible for bonus equity awards if Windstream’s Total Shareholder
Return is in the top 25 percent of the S&P 500 during the vesting period.
Consistent with our historical compensation practices, our fiscal 2013 executive compensation program, which
is discussed in detail in this Proxy Statement under the section titled “Compensation Discussion and Analysis,”
featured the following attributes:
Base Salary There was no change in Mr. Gardner or any NEO’s base salary for 2013.
Annual Incentive The amount awarded to Mr. Gardner for 2013 decreased from the prior year
(page 28) due to Windstream’s Adjusted OIBDA and Revenue performance.
Long-Term Equity Compensation The Compensation Committee held 2013 equity awards flat from 2012.
Performance-based long-term equity compensation represents a significant
portion of Mr. Gardner’s pay, and the Compensation Committee believes this
element is directly aligned with the interests of our stockholders. (page 29)