Windstream 2013 Annual Report Download - page 32

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26 |
Compensation Mix. Our executive compensation program consists of base salary, annual cash incentives
and long-term equity incentives. The Compensation Committee considers the total compensation of each executive
officer as well as the allocation of compensation among base salary, short-term incentive compensation, and equity-
based compensation in determining compensation levels. The following table illustrates the allocation for each
named executive officer for 2013:
Named Executive Officer
Percentage of
Annual Total Direct
Compensation*
Allocated to
Short-term
Incentive (%)
Percentage of
Annual Total Direct
Compensation*
Allocated to
Equity-Based
Compensation (%)
Percentage of
Annual Total Direct
Compensation*
Allocated to Base
Salary (%)
Jeffery R. Gardner 21% 64% 15%
Anthony W. Thomas 20% 55% 25%
Brent Whittington 19% 57% 24%
John P. Fletcher 20% 55% 25%
J. David Works, Jr. 22% 46% 32%
* Total direct compensation for these purposes equals base salary, short-term cash incentive payment at target
levels and the full up-front fair value of the annual equity-based awards determined in accordance with
authoritative guidance on share-based compensation.
The Compensation Committee believes that a substantial portion of executive compensation should be at-
risk through allocation of compensation to short-term cash incentives and long-term equity-based incentives. The
Compensation Committee also believes that, because of his considerable ability to affect the financial results
of Windstream, Mr. Gardner’s base salary should be a smaller component of his total compensation and at-risk
compensation should be a larger component. The following charts reflect the weighting of at-risk compensation
relative to total compensation for the CEO and collectively for the other NEOs.
Percentage of At-Risk Compensation in 2013
Other NEOs CEO
At Risk All Other
27% 15%
85%
73%
Compensation Committee. Windstream’s Compensation Committee is presently comprised of Samuel E.
Beall, III, Chairman, Dennis E. Foster, William A. Montgomery and Alan L. Wells. The Windstream Board has
determined that each member of the Compensation Committee is an independent director under NASDAQ listing
standards and a “non-employee director” for purposes of Section 16 of the Exchange Act and Messrs. Beall, Foster
and Montgomery are considered “outside directors” as defined in Section 162(m) of the Internal Revenue Code and
comprise the 162(m) subcommittee.
The Compensation Committee assists the Board in fulfilling its oversight responsibility related to the
compensation programs, plans, and awards for Windstream’s directors and principal officers. The Compensation
Committee annually reviews and approves goals relevant to Mr. Gardner’s compensation and, based on an annual
evaluation of these performance goals, determines and approves Mr. Gardner’s compensation. The Committee
conducts this review using a survey of compensation data of comparable employers that is prepared by the Committee’s
outside compensation consultant based on criteria specified by the Committee.