Windstream 2013 Annual Report Download - page 31

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What We Don’t Do:
• No 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.
• No 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 closing of the transaction itself (single trigger).
• No Hedging Transactions – Our directors and executive officers are prohibited from engaging in any
transaction involving derivative securities intended to hedge the market risk in our stock, pledging our
stock, or purchasing our stock on loan or margin.
• No Repricings – Our stock incentive plans prohibit us from repricing options without stockholder approval.
• No Tax Gross-ups – Our compensation programs do not provide for the gross-up or reimbursement of
taxes for executive officers in any situation.
• No Special Perquisites for Former Executives – We do not have perquisites for former and/or retired
executives that differ materially from those available to employees generally.
• No Top Hat Plan – We do not have a top hat plan or other supplemental executive retirement plan.
Our Board recognizes the fundamental interest our stockholders have in the compensation of our executive
officers. At the 2013 Annual Meeting, our stockholders approved by a vote of over 93 percent the compensation of
our named executive officers. Based upon the results of such vote and our review of our compensation policies and
decisions, we believe that our existing compensation policies and decisions are consistent with our compensation
philosophy and objectives discussed below and adequately align the interests of our named executive officers with
the long term goals of Windstream.
Stockholders at the 2014 Annual Meeting will be asked again to approve, on an advisory basis, the compensation
of our named executive officers. The following is a summary of key considerations that stockholders should take into
account when assessing our executive compensation program:
• Windstream’s vision is to become the premier enterprise communications and services provider in the
United States while maintaining our strong, stable consumer business. Our goal is to generate solid and
sustainable cash flow over time, and we return a significant portion of this cash flow to our stockholders
through our current dividend practice.
• We believe 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, which is why we include Adjusted OIBDA as a key performance objective for our short-
term and long-term incentive plans.
• Our 2013 compensation reflected our mixed operating results by paying short-term incentive payouts
below target. Our stock price decline also impacted 2013 compensation by providing a lower value to
executives upon vesting of their equity awards compared to their grant value. In addition, because our
executives are required to own a significant amount of company stock, the value of our executives’ total
stock holdings declined during the year.